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

The prime minister's office reported that this is a unique agreement of the 27 EU member states on the necessary investments in strengthening the EU economies, allowing the countries to recover from the consequences of the Covid-19 pandemic, at the same time, continuing the economic growth in 2021-2027. An additional challenge is reduction of the EU budget due to Brexit.

According to Karins, the outcome of the budget talks is favorable to Latvia because the country will receive by several billions of euros more than in the previous period.

Karins said that four days of discussions resulted in an agreement on the EU recovery fund and the multiannual budget.

Almost EUR 10.5 billion will be available for Latvia's economic development in the coming seven year, which is a 39 percent rise compared to the current multiannual budget for 2014-2020. In addition, Latvia will be able to borrow EUR 2.5 billion on favorable terms. Latvia still will receive more from the EU budget than it will pay in it - on average EUR 3.6 per every contributed EUR 1, the prime minister's office explained.

Karins underscored that the cohesion policy has been especially important for Latvia. Even though as the UK stepped out of the EU, and the cohesion fund is smaller, Latvia will receive more from the fund.

"The direct payments in farming have increased by 40 percent, which means that if farmers now receive EUR 179 per hectare, in 2022 this sum will grow to EUR 200 and in 2027 - to EUR 215. At the time when the funds are shrinking, Latvia will receive more, which means that there are huge development opportunities in Latvia," said Karins.

Latvia has managed to achieve a rise in cohesion and agricultural policies compared to the current period. It means that additional EUR 7 billion can be invested in innovations, green and digital technologies, infrastructure and modern growth.

An agreement has been achieved on increase of EU funding for Rail Baltica project. Latvia will also receive additional funding for military mobility.

The next step is to plan investments of resources. This will be done in line with the new National Development Plan.

As reported, EU leaders on Tuesday approved a landmark stimulus package to fight the withering aftershocks of the coronavirus outbreak that has sunk Europe into its deepest recession in history. The EUR 750 billion deal was sealed after four days and nights of intense negotiation.