Rezekne's financial situation is currently stable, but future will be challenging - Aseradens

RIGA - The financial situation in Rezekne is currently stabilized, but very big challenges are expected in the future, including the adoption of the 2025 budget, Finance Minister Arvils Aseradens (New Unity) said at a media briefing in Rezekne on Friday.

He pointed out that the 2025 budget is projected to be similar to the 2024 budget - around EUR 53 million, including EUR 30 million for the municipality's operational costs.

Aseradens stressed that almost a third of this, or EUR 8 million, will have to be spent on debt repayments and interest payments.

"There are no resources for development, because we have to pay the debts accumulated by the previous municipal management," said Aseradens.

The mnister also pointed out that the heaviest burden on the municipality is the newly built SPA center, where some EUR 14 million have been invested, including more than EUR 10 million co-financed by European Union (EU) funds.

Aseradens stressed that the objectives of the EU funds project must be achieved by 2028, otherwise the municipality would have to repay the EU funding of almost EUR 5 million. From the point of view of the Finance Ministry, the SPA center is the most fundamental problem of Rezekne municipality, so the city administration is looking for solutions.

Aseradens stressed that in order to improve the situation in the city, it is necessary to think about development. If so far Rezekne has made mostly unproductive investments, now the municipality has to focus on productive investments.

Guna Puce, Head of the Rezekne interim administration, stressed at the briefing that the municipality's first priority at the moment is to develop an industrial park, which would directly attract productive investments. Other priorities include the collection of sorted waste and the reduction of air pollution.

In general, Puce acknowledged that there are few development projects, but this is also due to the limited possibilities of the municipality.

Aseradens said that the government is planning to review soon an action plan for the development of Latvia's eastern border area, which foresees EUR 617 million over two years for the eastern border area, including EUR 250 million from the state budget. "Rezekne must find its place in this plan," the finance minister said.

A way will also be found to restructure Rezekne's existing debt so that "development in the direction of growth can be kick-started", the finance minister said.

The security sector with military bases in Latgale, as well as a program to insulate apartment buildings, which is to be implemented through public-private partnership projects, were among the directions in which Rezekne's development should be headed. Aseradens also recommended to focus more on public-private partnership opportunities and to cooperate with the Latvian Investment and Development Agency (LIAA).