RIGA - The European Commission recommends Latvia to increase public investment to promote green and digital transformation, as well as energy security, including with co-financing available from the European Recovery Fund, REPowerEU plan and other European Union funds, according to documents submitted for a joint meeting of Saeima Budget and Finance Committee and Saeima European Affairs Committee on Tuesday.
The Commission points out that Latvia needs to ensure that next year's increase in government-funded current expenditure does not impede provision of temporary and targeted support for the most vulnerable households and businesses, as well as Ukrainian refugees, to compensate for the rising energy prices.
Latvia must also be ready to adapt its current expenditures to the changing situation.
In order to reduce inequality, the Commission calls for, inter alia, increased taxes on property and capital and improvements in healthcare and social protection.
The Commission also recommends Latvia continuing the implementation of the Recovery and Resilience Facility in line with the targets approved by the European Council last July, and submit the 2021-2027 Cohesion Policy planning documents for talks with the Commission and subsequent implementation of the documents.
At the same time, Latvia needs to improve access to finance for small and medium-sized enterprises through public loan and guarantee schemes aimed at facilitating strategically important investments, especially in green transition and regional development.
The Commission also believes that Latvia needs to reduce its overall dependence on fossil fuels and diversify its fossil fuel imports, at the same time accelerating utilization of renewable energy, ensuring sufficient interconnection capacity, diversifying energy supply routes, and reducing overall energy consumption through ambitious energy efficiency measures.