Very high risks identified in implementation of new EU planning period - Finance Ministry

RIGA - Very high risks have been identified in the investment of the new European Union (EU) funds for the 2021-2027 period in the Latvian economy as planned, a meeting of the committee of ministers in charge of EU funds has concluded.

Representatives of the Finance Ministry informed LETA that on Tuesday, under the lead of Finance Minister Arvils Aseradens (New Unity), ministers of all ministries involved in the implementation of EU funds met to discuss the status of implementation of EU funds, the identified risks and possible solutions.

The year 2023 was particularly intensive for the institutions involved in the implementation of the EU funds, when, in parallel with the elaboration of the investment conditions for the new planning period 2021-2027, a number of measures had to be taken for the successful completion of the 2014-2020 planning period, as well as to work on the implementation of the Recovery Fund Plan, the ministry said.

According to Aseradens, Latvia has used the full allocation of EUR 4.6 billion for the 2014-2020 period, despite various global shocks. At the same time, very high risks have been identified in investing the new EU funds for the 2021-2027 period in the Latvian economy as planned.

"The loss of future funding is absolutely unacceptable. In order to ensure the inflow of EU investments, all ministries will have to submit proposals to the Finance Ministry by February 2 for possible amendments to the EU Funds 2021-2027 program," said Aseradens.

In the 2021-2027 planning period, Latvia has EUR 4.4 billion of EU funding available. In 2023, ministries have prepared just under half or 47 percent of the planned Cabinet of Ministers regulations for EUR 1.31 billion of the planned EUR 2.8 billion of EU funds and national funding.

In this period until January 22, the selection of 51 projects has been launched with a total EU funding support of EUR 788 million, representing 16 percent of the EU allocation. The first 13 projects are under implementation with a total EU funding of EUR 284 million, representing 7 percent of the EU allocation.

EUR 1.97 billion should be invested in Latvia from the Recovery Fund. On December 22, 2023, Latvia submitted a second payment request to the EC for implementation of 43 indicators to receive EUR 335.7 million.

By January 2024, a total of 61 indicators out of the 229 milestones and targets set for Latvia have been met. Investment rules have been approved for 91 percent of the available funding, project selections have been made for 66 percent or EUR 1.3 billion, and projects are under implementation for 49 percent or EUR 968.4 million.

In the light of the above, the Finance Ministry has developed a roadmap for the reallocation of EU funding, which foresees the development of amendments to the program for the period of 2021-2027. Thus, by February 2, ministries have to submit to the Finance Ministry well-founded proposals for optimizing investments that significantly increase investment spending already in 2024 and in the following years, meet the minimum annual expenditure targets, and are aimed at economic growth and addressing structural challenges of the economy.