New program headache for business

  • 2013-08-30
  • From wire report

RIGA - The Latvian Finance Ministry’s new version of the ‘Employment and Growth’ program has been a disappointment to many businesses, who are now considering leaving Latvia, because the program does not offer a single aid instrument to support existing companies contributing to the country’s development and growth, said the Latvian Association of Small- and Medium-Sized Enterprises’ board member Uldis Vitolins, reports
Latvia’s small- and medium-sized companies had great expectations of the government’s new proposals regarding the next European Union financial framework, hoping that they would mean new opportunities in the future. As it turns out, these hopes were in vain.

“So far, small- and medium-sized enterprises had at least a theoretical chance of receiving aid. Unfortunately, according to the government’s present stance, this will become impossible for the next EU financial framework. In terms of business development, the government wants to take a huge step backward because, unlike the current financial framework, there is no single program planned to offer aid for companies that function normally,” said Vitolins.
During the current financial framework, business was interested the most in those EU funds that were meant for successful companies, so they could buy equipment for modernization or to improve their competitiveness, while no such opportunity will be provided during the next financial framework. “Strangely enough, major support is to go not to companies to make them stronger, but to government bureaucracy,” added Vitolins.

The government is planning aid for the development of manufacturing; however, the aid is meant to create new manufacturing facilities, or to new companies. “Most of the existing companies do not need additional facilities, they need new equipment,” said Vitolins.

The Finance Ministry’s latest proposals regarding the ‘Employment and Growth’ program have been presented to the public recently and are yet to be harmonized with other ministries, government social partners and society, as well as with the European Commission.