EU – Baltic States, Financial Services, Funds, Latvia, Legislation, Markets and Companies

The Finance Ministry has submitted to the Cabinet of Ministers its monthly report on the status of the implementation of the European Union’s Structural and Cohesion Funds.

In the report, the Finance Ministry repeatedly warns of the risk of losing the 6 percent performance reserve, which is a percentage of the allocation to a program priority to be allocated definitively to the relevant priorities which achieved their milestones by the end of 2018. If the noncompliance with the target exceeds 35 percent, payments from EU funds can be stopped. The European Commission also points to these risks in its assessment of the implementation of EU funds in 2017.

The 6 percent performance reserve amounts to EUR 17.5 million in the European Regional Development Fund’s (ERDF) support to energy efficiency projects, EUR 38.2 million in the ERDF and Cohesion Fund’s environmental investments, EUR 31.4 million in the ERDF and the European Social Fund’s (ESF) financing to education and EUR 14 million in the ESF’ social inclusion support, including health care.

Although the risk of payment suspension in the aforementioned areas is not high, it is growing for the EU funds’ investments in infrastructure. The largest payments for infrastructure development projects are made at the end of the construction season. It is therefore likely that the payments to be made from July to December will significantly advance the implementation of EU funds. Consequently, it is necessary to speed up work on projects involving construction work, according to the report.