EU DOSSIER

The European Commission has sent a letter to 18 EU member states, including Latvia, reminding them to implement the EU requirement of liberating their gas and electricity markets. The liberation requirement provides that industrial producers have the right to choose gas and electricity supplies as of July 1. Household facilitation, meanwhile, will possibly be required starting in 2007. A Latvian Economy Ministry spokesperson said that Parliament was considering amendments to the energy law. The government approved proposals for the electricity market liberalization on July 20 for the transformation of state-owned power utility Latvenergo. Parliament has already approved amendments to the energy law in its second reading.

Latvia posted the highest GDP growth rate in the EU during the second quarter of this year with 7.7 percent, and the highest rate for Q1 with 8.8 percent, according to Eurostat. Latvia's semiannual GDP growth rate has been calculated at 8.2 percent. In Q2 of this year, Latvia was followed by Lithuania with a growth rate of 7.4 percent, Poland with 6.1 percent and Estonia with 5.9 percent. Among older EU member states, the highest rate of growth in Q2 was in Ireland at 4.1 percent. The average GDP expansion rate for the entire EU was 2.4 percent for the three-month period.

The Latvian State Treasury has repaid the first EU structural funds for farmers that have already implemented projects promoting agricultural development, the Finance Ministry reported. The Ministry's EU structural fund department representative Aija Krumina reported that 1.2 million lats' (1.8 million euros') worth of funds were transferred to 37 farmers in Latvia, around a third of which was covered by the state budget in cofunding. The Latvian Rural Support Service has for now stopped accepting agricultural projects for EU structural funds, as over 1,700 projects have already been submitted for 99 million lats, thus exceeding the quota for structural fund assistance until 2006.

EU members must submit their recommendations for preserving cod stocks in the Baltic Sea to the EC by next week, Latvia's National Fisheries Department head Normunds Riekstins said, adding that the recommendations would then be discussed by fisheries experts and EU ministers. According to Riekstins, the plan envisages a number of radical methods for preserving and renovating stocks of cod, which comprises a sizable source of income for Latvian fishermen. Riekstins suggested extending the quota only to countries fishing in the respective - eastern or western - region of the Baltic Sea. . "If we catch cod only in the eastern part of the Baltic Sea then there is no need for us to have quotas in the western part as well," he said.