EU funds to filter through regional maze

  • 2005-01-12
  • From wire reports
RIGA - The government will soon face its most rigorous examination of financial management as it must specify the distribution breakdown of EU structural funds not only by sectors but by regions, Finance Minister Oskars Spurdzins told a press conference this week.

He explained that since a bulk of the projects carried out with financing from EU funds are located in the Riga district, such a strategic breakdown would be required. The capital is already one of the most developed and dynamic areas in Latvia, whereas Latgale, one the most impoverished, covers just 7 percent of these projects.

"We could say that those who came first were served first, and it's natural that those who are the most active implement projects. But it is also vital for all regions of the country to develop, not just Riga and its vicinity," argued Spurdzins.

He noted, however, that regional EU fund absorption quotas should not be introduced, as the move could result in undistributed funds and poor money management. This could happen if businesses in some regions lacked sufficient activity, while others ran out of funds, thus stunting the country's economy as a whole.

Before another system is introduced, such as coefficients for fund distribution, the matter needs to be discussed politically.

All in all, Spurdzins said, some good results were achieved during the first half year in the union. Work on mastering the mechanisms for funds is under way, as some 80 percent of the total amount has been moved.

Latvia has access to 625.5 million euros from the European Regional Development Fund, European Social Fund as well as agriculture and fisheries funds until 2006. For large environmental and transportation projects, Latvia also has access to resources from the Cohesion Fund.