EUR 2.9 billion planned for Latvia from EU fund

The European Union (EU) Economic Recovery fund earmarked EUR 2.9 billion in grants for Latvia, which is three times more than previously expected, reported Latvian Television and Latvian Radio on May 27.

The European Commission (EC) offers a European recovery fund of EUR 750 billion to mitigate consequences of COVID-19 crisis. Of these, 500 billion will be grants to Member States, whereas 250 billion will be loans.

As previously reported, Finance Minister Jānis Reirs forecast that 1 billion of these could be made available to Latvia. It was decided on May 27 that the figure would be three times greater, 2.9 billion. 

1.85 billion is planned for Estonia and 3.9 billion for Lithuania.

The largest aid from the fund is EUR 81.8 billion for Italy, and EUR 77.3 billion for Spain. 

Valdis Dombrovskis, executive vice-president of the EC, pointed out that 2.9 billion is the total additional grant funding for Latvia. Regarding loans, some assessments have also been carried out, reaching 1.6 billion for Latvia, but this depends on how actively the Member States and project promoters in the Member States will work to attract these loans.

The EC proposes that some of this funding could be available already this year. 

"2.9 billion, I would say, is a serious additional support in this time of crisis and post-crisis. The EC proposal foresees that a part of this funding could be available already this year. This, of course, requires a swift agreement among Member States," Dombrovskis said.

The main criterion for money allocation has been the severity of the economic shock.

"The economies of the Member States are suffering, including restrictions on economic activity, movement and assembly of persons. Consequently, the negative economic effects do not necessarily relate directly to the population affected by the pandemic. The response is basically economic," Dombrovskis said. 

There is hope that an agreement on recovery mechanism and multiannual budget figures could be reached by the end of July. It is clear that this will not be possible via videoconference. It will therefore be necessary for the Member State leaders to meet personally for the first time since the start of the pandemic.

 

 

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Economy
Economy