For Latvia, EU brings more benefits

  • 2003-06-21
  • Baltic News Service

European Union membership will allow the Latvian economy to grow faster, but this growth will depend on Latvia's ability to make maximum use of opportunities available within the EU, said Uldis Osis, president of Konsorts, a consulting firm.
At the presentation of a survey reviewing likely scenarios for Latvia's economic development within and without the EU, Osis said the current economic boom would not stop should Latvia chose to remain outside the common market, but development would definitely slow down.
If Latvia joins the EU gross domestic product per capita could reach some 3,500 lats (5,250 euros) per annum by 2007.
However, should the country remain on the sidelines, the same figure would be around 3,000 lats, said Osis.
Wages will also keep growing, he continued, but outside the EU the rate of growth would be 15 percent - 16 percent lower as opposed to 26-27 percent growth in case of membership.
One should not see EU membership as a magic cure automatically wiping out all existing economic problems that account for low GDP per capita at the moment, said the economist, but within the organization more ways to solve these problems will become available.
He said EU membership would allow for stable economic and political environment in Latvia, making it more attractive to investors. With the help of EU funds for support to small and medium-size businesses Latvian companies will be able to build the competitive ability on the EU and world markets.
All in all, Osis has developed six likely scenarios for Latvia's economic growth within or without the EU upon varying outside factors. Latvia's Finance Minister Valdis Dombrovskis told Parliament on May 29 that the country would receive 830 million euros more in 2004 - 2006 than it would contribute to the common EU budget.
Dombrovskis said that during that period Latvia would receive about 1.1 billion euros from EU structural funds and assistance programs but would have to contribute just 287 million euros.