Absorption of EU Cohesion and Structural Funds has started very slowly in Latvia - Dombrovskis

RIGA - Latvia is not lagging behind the overall European Union (EU) indicators in the use of Recovery and Resilience Mechanism funds, but the absorption of the classic EU funds - Cohesion and Structural Funds - has started very slowly, Valdis Dombrovskis (New Unity), European Commissioner for Economy and Productivity, Implementation and Simplification, told LETA in an interview.

He pointed out that not even all the necessary normative documents and cabinet regulations have been adopted for the funds to start being absorbed.

"At the same time, we see that Latvia's economy stagnated last year and is expected to grow slowly this year, below the European average. This is understandable, given all the geopolitical risks, but here is a tool that can be used to stimulate the economy for just such a situation, and it should be used," the Commissioner stressed.

Asked whether it is not a worry that only 40 percent of the funds available for Latvia from the Recovery and Resilience Mechanism have been used, even though the fund created during the pandemic will expire in August 2026, Dombrovskis said that it was initially foreseen that most of the money would be used this year and next.

Asked whether the EU funds, which there are concerns about their timely use, could be diverted to financing defense needs, Dombrovskis called for focusing on the purposes for which the funds are intended.

"It should be understood that the EU funds are currently allocated and there are targets for their use, so to start some kind of review would be to slow down the pace of absorption of the funds even more," Dombrovskis said.

He added that the European Defense Fund has been set up for defense purposes, and Latvia has already attracted funds for several projects, including the establishment of a modular projectile production facility. It is expected that the next multi-annual budget will significantly increase both the European Defense Fund and defense funding in general, so preparations should be made to make good use of the funds that will be available for defense.