The financial situation of Rezekne region has stabilised, but they have very big challenges ahead, including the approval of the budget for 2025, said Latvian Minister of Finance Arvils Ašeradens at a media briefing on Friday, the 13th of December.
He said the budget for 2025 is expected to be similar to that of 2025 – around EUR 53 million. The municipality’s operational expenses are estimated at EUR 30 million.
Ašeradens stressed that nearly one-third of expenses or EUR 8 million will need to be diverted towards debt repayment and interest payments.
“There are no resources for development because the debts left over from the last government,” said the minister.
He also said the biggest burden for the municipality is the newly-built SPA Centre. This project received investments worth approximately EUR 14 million. This includes more than EUR 10 million from the European Union (EU).
Ašeradens stressed that the goals of the EU funds project must be met by 2028, otherwise the municipality will have to repay almost EUR 5 million of EU funding. From the point of view of the Ministry of Finance, the SPA centre is the most fundamental problem of Rezekne municipality, so the city administration is looking for solutions.
Ašeradens stressed that it is necessary to think about development to improve the situation. While until now municipality has been performing mostly unproductive investments until, then they will need to turn to productive investments in the future.
The head of Rezekne’s interim administration Guna Puce stressed at the briefing that the priority of the municipality is the development of an industrial park to help attract productive investments. Other priorities include collecting sorted waste and reduction of air pollution.
Puce said there are few development projects, but this can be explained with the municipality’s limited capabilities.
Ašeradens said the government plans to review the plan for the development of Latvia’s eastern border. This plan details investments of EUR 617 million (EUR 250 million from the state budget) towards the eastern border in the next two years. “Rezekne needs to find its place in this plan,” said the minister.
A way to restructure Rezekne’s debt in a way to “initiate development” will be sought, said the minister.
Ašeradens listed the directions in which the development of Rezekne should be directed – the field of security with military bases in Latgale, as well as the program of insulation of apartment buildings, which is planned to be implemented with the help of public-private partnership (PPP) projects. Also, Ašeradens recommended to focus more on PPP opportunities, as well as to cooperate with the Investment and Development Agency of Latvia (LIAA).
Inta Komisare, Director of the Municipal Financial Supervision and Financing Department of the Ministry of Finance, explained at a media briefing that the first stage of financial stabilization of Rezekne has been completed, and the municipality no longer has long-overdue payments.