On Tuesday, March 5, under the leadership of Finance Minister Arvils Ašeradens, heads of ministries and their representatives met at the Thematic Committee of European Union (EU) funds in order to agree and submit to the Cabinet of Ministers (CM) for further consideration concrete proposals for investment changes and improvements for the EU Funds 2021-2027 programme. The committee supported the redistribution of financial investments in the amount of EUR 662.8 million, maintaining the size of the total investment portfolio of each ministry, thus preventing the risks of fund financing that were mentioned earlier.
"Government ministers have agreed on changes in the EU fund programme, that will eliminate the risks of losing funding and allow the full amount of available funding to be invested. I am pleased that we have found a way to go beyond the breaking point of the programme delays and have agreed on a reallocation of almost €663 million, which will also allow the economy to grow as much as planned," states Minister of Finance Arvils Ašeradens.
Given the insufficient pace of implementation of the EU funds for the 2021-2027 programming period, the Ministry of Finance (MoF) has identified the need to urgently increase the pace of investment in order to fully invest the EU funds in 2026 and 2027. This would also allow to promote faster economic growth of the country.
In January this year, under the leadership of the MoF, the Committee of Ministers of EU Funds developed a roadmap for the reallocation of EU funding and amendments to the programme for the programming period 2021-2027. In February MoF, in cooperation with line ministries, prepared a proposal for improving and changing investment portfolios. One of the most important criteria for changes is that they must significantly increase the pace of investment and in the following years to meet at least the minimum annual expenditure targets to be declared to the European Commission (EC). Also, they should be aimed at economic growth and solving structural challenges of the national economy. When planning investment changes, the readiness of the project start and their current progress were also taken into account.
Overall, the Committee endorsed the proposed reallocations of €662.8 million, while maintaining the size of each ministry's investment portfolio. The biggest change in the reallocation of project funding affects the Ministry of Transport, where €335.3 million is to be reallocated between ministerial projects. This is followed by the Ministry of Economy with €116.8 million, the Ministry of Education and Science with €75.7 million, the Ministry of Health with €47.3 million, the Ministry of Environmental Protection and Regional Development with €34.8 million, the Ministry of the Interior with €24.7 million, the Ministry of Finance with €12.7 million, the Ministry of Welfare with €8.9 million and the Ministry of Culture with €6.7 million.
The first phase of changes to EU funds investment includes an increase in Altum's loan programme, new job creation in exporting companies, digitisation of companies' business processes and support for foreign markets, as well as research support. Significant reallocations are planned in the transport sector, e.g. additional funding for passenger trains. Additional funding is also planned to be directed to the development of preschool education infrastructure in order to ensure equal opportunities for children (including groups of persons in a socially and economically disadvantaged situation) to receive preschool education services provided by the municipality and to ensure the full return of the child's parents to the labor market. To contribute to reducing inequalities and promoting social inclusion, it is foreseen to increase support for the development of the child rights and protection system, including the development of support tools for the prevention of violence against children.
The MoF, in cooperation with line ministries and social and cooperation partners, will prepare amendments to the EU Funds Programme, and the proposals will also be examined by the EU Funds Monitoring Committee and informal consultations with the EC will take place. Following consultations with the EC, the MoF will submit the draft EU Funds Programme 2021-2027 to the Cabinet of Ministers in Q2 2024.
The remaining investment proposals received by the MoF in February (totalling €1.7 billion) will be assessed in the context of the preparation of the Mid-Term Review of the EU Funds, which is expected by early 2025.
In the 2021-2027 programming period, Latvia has €4.4 billion of EU funds available.
