The European Commission has today 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 Facility (RRF). This financing will support the implementation of the crucial investment and reform measures outlined in Latvia's recovery and resilience plan. It will play a key role in enabling Latvia emerge stronger from the COVID-19 pandemic.
The RRF - at the heart of NextGenerationEU - will provide up to €672.5 billion (in current prices) to support investments and reforms across the EU. The Latvian plan forms part of an unprecedented coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market.
The Commission assessed Latvia's plan based on the criteria set out in the RRF Regulation. The Commission's analysis considered whether the investments and reforms set out in Latvia's plan support the green and digital transitions; contribute to effectively addressing challenges identified in the European Semester; and strengthen its growth potential, job creation and economic and social resilience.
Securing Latvia's green and digital transition
The Commission's assessment finds that Latvia's plan devotes 38% of its total allocation to measures that support climate objectives. The plan places a particular emphasis on sustainable mobility, with investments to help overhaul transport networks in the Riga metropolitan region. It includes measures to improve the energy efficiency of residential buildings and the upgrade of the electricity grid. The plan also includes measures on climate change adaptation, with investments in flood and fire prevention.
The Commission's assessment finds 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 digitalisation of public administration. It supports the digital transformation of businesses and will help to creating a better environment for research and innovation by facilitating Latvia's participation in the network of European Digital Innovation Hubs. The plan also includes measures to improve digital infrastructure through the deployment of very high-speed broadband.
Reinforcing Latvia's economic and social resilience
The Commission considers that Latvia's plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Latvia by the Council in the European Semester in 2019 and in 2020. The plan addresses challenges identified in the areas of healthcare, education and skills, social inclusion, research and innovation, affordable housing, public administration and business climate.
The plan represents a comprehensive and adequately balanced response to Latvia's economic and social situation, thereby contributing appropriately to all six pillars referred to in the RRF Regulation.
Supporting flagship investment and reform projects
The Latvian plan proposes projects in seven European flagship areas. These are specific investment projects, which address issues that are common to all Member States in areas that create jobs and growth and are needed for the twin transitions. For instance, Latvia has proposed to provide €95 million to digital upskilling for improving digital skills with an aim to increase the share of people aged 16-74 with at least basic skills to 54% in 2026.
The assessment also finds that none of the measures included in the plan significantly harms the environment, in line with the requirements laid 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 details on how national authorities will prevent, detect and correct instances of conflict of interest, corruption and fraud relating to the use of funds.
Members of the College said:
President Ursula von der Leyen said: “Today, the European Commission has decided to endorse Latvia's recovery and resilience plan, under NextGenerationEU - our unprecedented recovery plan. Securing Latvia's green and digital transition requires investment and reform. 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 will help build a better live for Latvian citizens.”
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “The Latvian recovery and resilience plan has received a positive assessment by the European Commission. Latvia plans to use the funding to make its economy more resilient and to improve Latvians' quality of life and wellbeing. In the short term, the plan focuses on supporting economic recovery after the COVID-19 crisis. It includes major reforms and investments in healthcare, as well as measures to reduce inequality, strengthen the rule of law, and improve regional infrastructure. In the long term, the plan aims to make the economy more competitive with focus on climate neutrality and the digital transition, including investments in human capital to upskill and improve digital skills. The full implementation of the plan will be essential in order to meet those objectives.”
Paolo Gentiloni, Commissioner for Economy, said: “Latvia's recovery and resilience plan contains a broad set of reforms and investments that will make a real difference to the lives of citizens and the competitiveness of businesses. The plan includes important measures to boost digital skills, improve connectivity and modernise the public administration. It also features particularly ambitious reforms of higher education and healthcare. Lastly, 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 an investment location.”
The Commission has today adopted a proposal for a decision to provide €1.8 billion in grants to Latvia under the RRF. The Council will now have, as a rule, four weeks to adopt the Commission's proposal.
The Council's approval of the plan would allow for the disbursement of €236 million to Latvia in pre-financing. This represents 13% of the total amount requested by Latvia.
The Commission will authorise further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in the recovery and resilience plan, reflecting progress on the implementation of the investments and reforms.
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