EU – Baltic States, Financial Services, Funds, Latvia
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Friday, 29.03.2024, 06:51
EU funding available to Latvia likely to contract by EUR 56 million as a result of Brexit
Foreign Minister Edgars Rinkevics (Unity) told members of the Saeima European Affairs Committee today that Latvia has prepared a national position to protect its interests during the EU’s talks with Britain on its exit from the bloc. Latvia’s position, however, will be updated as the Brexit negotiations progress, Rinkevics said.
What is clear already now is that arrogance or any punitive approaches would be unacceptable in the talks with Great Britain. Instead, the talks have to be held keeping in mid Latvia’s interests, to ensure that relations with Britain remain as close as possible in various areas.
One of the most important questions is the status of Latvians residing in Great Britain, and Latvia wants their status to remain unchanged there, the foreign minister said.
As for Latvia’s future trade relations with Great Britain, the minister said he was unable tell anything new about the subject, but indicated that Latvia’s interests are concerned with the future of the British timber industry.
According to information obtained by LETA, Brexit is expected to start affecting Latvia’s budget in 2019 if Britain stops paying its contributions to the EU budget and other member states compensate for this by increasing their contributions. In the case of this scenario, Latvia’s contributions to the EU budget would grow by 32%, or EUR 80.-83 million a year. The amount of EU funding available to Latvia would remain unchanged.
According to another scenario, which the Foreign Ministry considers to be the most likely, the EU budget would be reduced by the about 5 percent, or the net share of Great Britain’s contribution. The budget’s expenditures would be reduced accordingly, cutting funding for Latvia by EUR 52-56 million in 2019 and 2020.
Under the third scenario, the bloc’s budget would be kept at 1% of the EU’s GDP, but that would reduce the EU budget even more, which means that the funding available to Latvia would shrink by EUR 177-200 million a year.
The above scenarios do not take into consideration other direct and indirect influences on the bloc’s finances.