RIGA - The EU member states have the opportunity to react to the crisis caused by the pandemic also if the Covid-19 omicron variant will stretch the pandemic longer, but it is important that the state support is targeted and does not become a burden in the coming years, said European Commission Vice President Valdis Dombrovskis (New Unity) in an interview with LETA.
"It is clear that the EU should keep a flexible approach towards the crisis and should be able to react to the changing situation. The omicron variant has brought along new uncertainty in relation to the epidemiological situation and further possible impact on the economy," Dombrovskis said.
He said that the government debt level of the member states has risen considerably, and after the pandemic is over, a solution should be found how to gradually decrease this level. Therefore, it is important that the state support is targeted and does not become a significant burden to the government budgets in the coming years.
"Largely, absorption of the crisis has been successful, and the economic support instruments continue to work. Therefore, if necessary, there will be a possibility to act if new problems emerge in relation to omicron," Dombrovskis said.
He said that Latvia is among those countries whose fiscal risks have been assessed as low, but the government debt level has risen considerably.
"As a small country, Latvia should be aware of the possible changes in the market that might make service of debts considerably more expensive. Thus, Latvia should already now think how to reduce the government debt after the crisis is over. Looking at this year's budget deficit, the European Commission projects that Latvia's budget deficit is 9.5 percent of the gross domestic product (GDP), which is considerably higher than average in the EU - 6.6 percent. Therefore, it is essential for Latvia that the support measures are targeted carefully and restricted in time," said Dombrovskis.