The European Commission has approved Latvia’s submitted Recovery and Sustainability Plan worth EUR 1.8 billion, as confirmed by EC representatives.
New the European Council will need to approve the plan.
Latvia’s plan for recovery and sustainability was submitted to the European Commission on April 30 for the entire available amount – EUR 1.826 billion. This plan details support in six areas – climate goals, digital transformation, reduction of inequality, economic transformation and productivity reforms, healthcare, as well as enhancement of the rule of law.
The plan has 85 activities, including 24 reforms and 61 investment elements.
Activities aimed at achieving climate change goals (sustainable transport, energy efficiency, renewable energy resources and de-carbonisation of power lines, adaptation to climate change) require EUR 676.2 million. Digital transformation (digitization of the public and private sectors, e-management services, data management, digital skills, 5G) requires EUR 365.3 million. Reduction of inequality (road restoration, school infrastructure, affordable housing, industrial parks, social services, long-term care, skill training) requires EUR 370 million.
At the same time, economic transformation and productivity reform (innovation management, private sector research and innovation promotion, investments in research, higher education and science management, career management in research) require EUR 196 million. Activities in healthcare (outpatient care infrastructure, human resources, sustainability, public health) require EUR 181.5 million. To reinforce the rule of law (prevention of economic crimes, training in the justice sector, prevention of money laundering, procurement monitoring) requires EUR 37 million.
EC notes that financing will help implement major investments and reforms that will be decisive in helping Latvia recover from Covid-19 and become stronger.
The commission viewed Latvia’s plan based on criteria detailed in the regulation that governs Recovery and Sustainability Mechanism. The commission concluded that 38% of all requested funding in Latvia’s plan would be delegated to activities that help accomplish climate goals. The plan puts an emphasis on sustainable mobility, with investments planned for the modernization of transport networks within Riga’s limits. It is also planned to improve the energy efficiency of buildings and modernize power lines. The plan also includes special activities that will help the country adapt to climate change – measures against floods and fires.
The EC also concluded in the assessment that 21% of the financing detailed in Latvia’s plan was planned to be delegated towards activities aimed at digital transformation.
EC believes Latvia’s plan covers a wide range of reforms and investments that will assist with resolution of many economic and social problems the European Council had pointed Latvia towards in 2019 and 2020. The plan includes activities to help resolve issues in areas like healthcare, education, social inclusion, research and innovation, affordable housing, state administration and business environment.
Those are specific investment projects that are aimed at resolving problems shared by many member states. For example, Latvia plans to divert EUR 95 million towards improvement of digital skills to help 54% of residents aged 16 to 74 years learn at least basic digital skills by 2026.
The assessment also mentions that none of the activities included in the plan includes any major impact for the environment.
“Latvia’s control systems are considered sufficient to protect the union’s financial interests. The plan details ways the country’s institutions plan to uncover and prevent conflicts of interests, corruption and fraud using EU financing,” the EC adds.
EC chairperson Ursula von der Leyen said in order for Latvia to undergo a green and digital reformation, it was necessary to perform investments and reform.
Executive Vice President of the European Commission for an Economy that Works for People Valdis Dombrovskis mentioned that the funding from Europe provided a unique opportunity for Latvia to develop its national economy and improve residents’ quality of life.
“The short-term plan is aimed at post-crisis economic recovery with support for important reforms and investments in healthcare, reduction of inequality, rule of law and organization of infrastructure in regions. To ensure long-term competitiveness of Latvia’s economy, it is planned to divert a great deal of resources towards climate neutrality and digital goals, as well as investments into human capital. In order to accomplish all sustainable development goals, the most important issue at the moment is working on the plan’s practical implementation,” said Dombrovskis.
Commissioner for Economy Paolo Gentiloni said Latvia’s plan included a number of reforms and investments that were sure to help introduce tangible changes to people’s lives and competitiveness of enterprises.
If the European Council approves the plan, Latvia will receive EUR 236-million advance financing. This is equal to 13% of the amount requested by Latvia. (BNN/Business World Magazine)