RIGA - It is important for all institutions involved in the implementation of the European Union (EU) funds to mobilize all their resources in order to be able to close the current EU funds period and to start investing funds of the new EU period in the Latvian economy immediately, according to the semi-annual report on the implementation of the EU funds, the Recovery Fund and other foreign financial instruments prepared by the Finance Ministry and reviewed by the government on Tuesday.
Finance Minister Arvils Aseradens (New Unity) noted that throughout this year he has organized several working meetings with the ministers responsible for the most important EU fund allocations to discuss progress and take the necessary decisions to improve the implementation of financial flows, but there have been delays from the plan. This situation must not occur, as EU funding is closely linked to the overall budgetary framework.
The Finance Ministry reported that the final phase of the 2014-2020 planning period for EU funds is generally characterized by an increasing pace of completion of investments.
At the same time, the ministry stated that risks remain to the completion of a number of projects by the end of this year, in particular in transport and health infrastructure. The institutions involved in the management of EU funds, in cooperation with project promoters, are taking the necessary risk management measures to facilitate the use of all EU funding available to Latvia and the achievement of the investment targets of the projects launched.
Aseradens said at the cabinet meeting that the Finance Ministry's State Secretary would discuss the issue with other ministries in the near future. If no clear progress is seen, then Aseradens plans to address individual ministers himself.
"If we say that there are no resources, then, dear colleagues, here they are, and I ask you to work to acquire them. This cannot go on!" the finance minister said.
Meanwhile, Welfare Minister Uldis Augulis (Greens/Farmers) noted that there bureaucratic obstacles hindering the absorption of the funds. "We need to review the whole bureaucratic process, because it takes a huge amount of time to get it coordinated. We need to figure out how to move the processes faster," said Augulis.
By August 31, 2023, 2,468 EU fund projects were under implementation for almost the entire amount of EU co-financing available to Latvia - EUR 4.6 billion. More than half of the projects have been completed, amounting to EUR 1.8 billion. A total of EUR 3.9 billion has been disbursed to projects, representing 84.3 percent of the total EU allocation for Latvia.
The national budget has received almost EUR 3.4 billion from the European Commission, more than half of the funding available for the programming period. The ministry said that 2023 is the final year for project promoters to make the last payments on their projects to qualify for the foreseen EU co-financing.
Intensive work is also underway to launch the 2021-2027 planning period for EU funds. The development of the legislative framework is still lagging behind the timetable approved by the Cabinet of Ministers in April 2023.
Given the timetable, in the first half of 2023, the responsible authorities had to submit 25 investment regulatory frameworks to the Cabinet for approval, for a total funding of EUR 664.7 million. In total, 37 Cabinet Regulations have been approved since the beginning of the programming period, for a total of EUR 637.92 million of funding.
By the beginning of September 2023, 95 Recovery Fund projects worth EUR 650.7 million were under implementation, an increase of 38 projects and EUR 186.1 million compared to six months earlier. The largest projects under implementation are in the area of climate change - energy efficiency. Three projects worth EUR 3.2 million have been completed.