Latvia should commit to reducing budget deficit in the coming years, suggests Executive Vice-President of the European Commission Valdis Dombrovskis.
On Monday, the 11th of December, after meeting with Latvian Prime Minister Evika Siliņa, Dombrovskis told journalists that the European Commission has prepared a report about Latvia’s state budget project for 2024. EC concluded that this budget project completely fails to meet all of the recommendations previously provided to Latvia, adding that expenditures have increased more rapidly than previously recommended. This is why Dombrovkis believes that the topic of reducing the budget deficit is important.
Dombrovskis also mentioned that this week there will be a meeting of the Council of Europe, during which EU leaders will discuss the EU medium-term budget outlook, in which EUR 50 billion is reserved as aid for Ukraine.
“It is important for these decisions to be made. The end of the year is rapidly approaching, and the financing set aside for Ukraine will be needed next year.
It’s no less important for the EU to ensure stable and predictable support for Ukraine next year and in the coming years. Currently there is a EUR 18 billion macro-financial aid programme. The final EUR 1.5 billion payment, which is planned to be paid before the end of the year, is all that’s left,” said Dombrovskis.
He and Siliņa discussed topics related to the Recovery and Resilience Facility, including topics related to Latvia’s national economy recovery and resilience plan. Dombrovskis stressed that a corrected plan was approved last week. Latvia is eligible to nearly EUR 2 billion in the form of grants, including EUR 124 million from REPowerEU.
The Executive Vice-President of the European Commission explained this is additional funding to help resolve problems related to the energy sector and prevention of energy dependence from Russia. Dombrovskis said the plan is approved. This means it’s necessary to focus on the reforms and investments listed in the plan. According to him, the terms are tight enough, and Latvia should start preparing for the next payment request.
Siliņa mentioned plans to reduce the budget deficit in the medium-term. The PM mentioned that the good news is that the government considers the fiscal space very responsibly. She explained that Latvia has recently had additional expenditures due to the various geopolitical challenges recently, including the Selijas army base and the installation of border infrastructure on the border shared with Belarus and Russia.
She also mentioned that she discussed with Dombrovskis the topic of further support for Ukraine. This week Siliņa will attend a meeting of the Council of Europe. Representatives of EU member states will discuss the multi-year budget at this meeting. She predicts the talks will be intense. She also said that Latvia will support Ukraine’s EU accession talks and provision of EUR 50 billion.
“It’s clear the discussion will cover nuances, but it’s as important to ensure the funding is allocated and we reach an agreement on a European level,” she stressed.
In October the European Parliament improved and approved the proposals for a EUR 50 billion budget for Ukraine’s recovery, restoration and modernisation in 2024. EP’s position received 512 votes in favour, 45 votes against. 63 MEPs abstained in the vote.
Also read: Latvian ministers’ pay to grow by 423 euros and Saeima deputies’ pay – by 250 euros
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