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The European Commission has adopted a positive assessment of Latvia’s recovery and resilience plan. This is an important step towards the EU disbursing € 1.8 billion in grants under the Recovery and Resilience Mechanism (FRR). This funding will support the implementation of critical investment and reform measures outlined in Latvia’s Recovery and Resilience Plan. He will play a key role in enabling Latvia to emerge stronger from the COVID-19 pandemic.
The RRF – at the heart of NextGenerationEU – will provide up to € 672.5 billion (at current prices) to support investment and reform across the EU. The Latvian plan is part of an unprecedented coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing green and digital transitions, to strengthen economic and social resilience and market cohesion unique.
The Commission assessed Latvia’s plan on the basis of the criteria set out in the RRF Regulation. The Commission’s analysis examined whether the investments and reforms set out in the Latvian plan support green and digital transitions; contribute effectively to tackling the challenges identified in the European Semester; and strengthen its potential for growth, job creation and economic and social resilience.
Ensuring Latvia’s green and digital transition
The Commission’s assessment shows that Latvia’s plan devotes 38% of its total allocation to measures that support climate goals. The plan places particular emphasis on sustainable mobility, with investments to help overhaul transport networks in the Riga metropolitan area. It includes measures aimed at improving the energy efficiency of residential buildings and upgrading the electricity grid. The plan also includes measures to adapt to climate change, with investments in flood and fire prevention.
The Commission’s assessment shows that Latvia’s plan devotes 21% of its total allocation to measures that support the digital transition. The plan includes investments in basic and advanced digital skills and in the digitization of public administration. It supports the digital transformation of businesses and will help create a better environment for research and innovation by facilitating Latvia’s participation in the network of European digital innovation centers. The plan also includes measures to improve digital infrastructures by deploying very high speed broadband.
Strengthening the economic and social resilience of Latvia
The Commission considers that Latvia’s plan includes a broad set of mutually reinforcing reforms and investments which contribute to effectively tackling all or a significant subset of the economic and social challenges described in the country-specific recommendations addressed. to Latvia by the Council in the 2019 and 2020. The plan addresses the challenges identified in the areas of health, education and skills, social inclusion, research and innovation, housing affordability, public administration and business climate.
Commission President Ursula von der Leyen said: “The European Commission has decided to endorse Latvia’s recovery and resilience plan as part of NextGenerationEU, our unprecedented recovery plan. Ensuring Latvia’s green and digital transition requires investments and reforms. The measures contained in the plan have enormous potential to transform Latvia and help it build a green and digital future for its citizens. I am proud that NextGenerationEU is helping to improve the lives of Latvian citizens.
The plan represents a comprehensive and adequately balanced response to Latvia’s economic and social situation, thus contributing appropriately to the six pillars referred to in the RRF Regulation.
Support flagship investment and reform projects
The Latvian plan proposes projects in seven key European areas. These are specific investment projects, which address issues common to all Member States in areas of job creation and growth and which are necessary for the twin transitions. For example, Latvia has proposed to allocate € 95 million for digital skills enhancement to improve digital skills with the aim of increasing the share of people aged 16 to 74 with at least basic skills to 54 % in 2026.
An economy that works for people Executive Vice-President Valdis Dombrovskis said: “The Latvian recovery and resilience plan has received a positive assessment from the European Commission. Latvia plans to use the funding to make its economy more resilient and to improve the quality of life and well-being of Latvians. In the short term, the plan focuses on supporting economic recovery from the COVID-19 crisis. It includes major reforms and investments in health care, as well as measures to reduce inequalities, strengthen the rule of law and improve regional infrastructure. In the long term, the plan aims to make the economy more competitive with a focus on climate neutrality and digital transition, including investments in human capital to build skills and improve digital skills. Full implementation of the plan will be essential to achieve these goals. “
The assessment also concludes that none of the measures included in the plan significantly harm the environment, in accordance with the requirements set out in the RRF Regulation.
The control systems put in place by Latvia are considered adequate to protect the financial interests of the Union. The plan provides sufficient detail on how national authorities will prevent, detect and correct cases of conflict of interest, corruption and fraud related to the use of funds.
Economy Commissioner Paolo Gentiloni said: “Latvia’s recovery and resilience plan contains a wide range of reforms and investments that will make a real difference in the lives of citizens and the competitiveness of businesses. The plan includes important measures to strengthen digital skills, improve connectivity and modernize public administration. It also includes particularly ambitious reforms in higher education and health. Finally, Riga will benefit from major improvements to its transport system, helping to make the capital more environmentally sustainable, more liveable for its residents and more attractive as a place of investment.
The Commission today adopted a proposal for a decision to award EUR 1.8 billion in RRF grants to Latvia. The Council will now generally have four weeks to adopt the Commission proposal.
The approval of the plan by the Council would allow the payment of 236 million euros to Latvia in the form of pre-financing. This represents 13% of the total amount requested by Latvia.
The Commission will authorize further disbursements on the basis of the satisfactory achievement of the milestones and objectives defined in the recovery and resilience plan, reflecting the progress made in the implementation of investments and reforms.