European national recovery-resilience plans: Latvian success story

All three Baltic States have been successful in approving their plans: however, recent Latvian example is showing positive development of national reforms and investment plans. According to the Commission, it will further support the country’s efforts to recovery. 

Latvia was one of the first EU states, which –among ten others on 22 of April 2021 – submitted its national recovery and resilience plan, NRRP to the Commission; Lithuania succeeded in May and Estonia in June. Latvian NRRP was endorsed by the Commission on 22 June 2021and the assessment was approved by the Council on 13 July.
The Latvian NRRP was one of the first among the Baltic States to be endorsed by the Commission at the end of July 2022; in the preliminary assessment of a requested Latvia’s payment of €201 million in grants is in accordance with the EU Recovery and Resilience Facility (RRF), the key instrument in the Union’s NextGenerationEU program.

The road to NRRP’s perspective implementation
Latvia submitted to the Commission a payment request in mid-June 2022 based on the achievement of the nine milestones selected in the Council Implementing Decision for the first installment. They cover reforms and investments in numerous areas, such as: the minimum income support system, the adoption of a common model for the development of the last mile broadband connection (to ensure end-user’s access to very high capacity broadband network in regions and rural areas), the regulatory framework for improving the competition environment and reducing corruption risks in public procurement, the strengthening of remote learning networks and institutions, the prevention of money laundering and terrorism, optimal proliferation of financial resources, as well as social housing.

With the request from the Commission and other EU institutions, the Latvian authorities provided detailed and comprehensive evidence demonstrating the fulfillment of the required nine main milestones. The Commission has thoroughly assessed this information before presenting its positive preliminary assessment of the payment request.
The Latvian national recovery and resilience plan, NRRP includes a wide range of investment and reform measures in six thematic components. It is worth €1.8 billion in grants, 13% of which (€237 million) was disbursed to Latvia in pre-financing already in September 2021.
Just to compare: Estonian disbursement procedure included € 126 million (in December 2021) and Lithuania received a pre-financing” funds of € 289 mln in August 2021.
Generally, payments under the national RRF are performance-based and contingent on the states implementing the investments and reforms outlined in their respective recovery and resilience plans.

Members of the Commission’s College opinion
= President Ursula von der Leyen underlined that Latvia has achieved sufficient progress in its NRRP and is ready to receive a first payment under NextGenerationEU. After the Council’s approval, the country will receive € 201 million to proceed in implementing the plan’s first set of reforms and investments. The latter includes the development of a minimum income support system, a plan to roll-out broadband throughout the country, as well as the reinforcement of its secondary education network.
= Valdis Dombrovskis, Commission Executive Vice-President stressed that Latvia made “another step forward, as it fulfilled the first nine milestones set out in its NRRP”. He added that Latvia was successfully proceeding with its strategy of reforms and investments, including the further development of its system for minimum income support, along with rules for improving the competition environment and reducing corruption risks in public procurement. The country has also taken steps to boost remote learning, tackle money laundering and improve the supply of affordable housing. Once the Commission’s assessment is reviewed and approved by the Council, Latvia will receive €201 million in grants to “help make its economy more inclusive and resilient for years to come.”
= Paolo Gentiloni, Commissioner for Economy, said that a positive assessment of key steps in the implementation of Latvia’s NRRP is followed by the country’s first payment request. Latvia has adopted important measures including facilitating remote learning and enabling connected and automated driving, as well as tightening the anti-money laundering framework and supporting fair competition in public procurement.
Source and reference to: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_4625

Next steps
The Commission has sent its positive preliminary assessment of Latvia’s fulfillment of the milestones required for this payment to the Economic and Financial Committee (EFC), asking for its opinion. The EFC’s opinion, to be delivered within about four weeks (i.e. somewhere at5 the end of August), should be taken into account in the Commission’s assessment.
Following the EFC’s opinion, the Commission will adopt the final decision on the disbursement of the financial contribution, in accordance with the examination procedure, through a comitology committee: the disbursement to Latvia would take place following the adoption of the decision by the Commission.
The Commission’s assessment of further payment requests to Latvia will be based on the fulfillment of the milestones and targets outlined in the Council Implementing Decision, reflecting progress on the implementation of the investments and reforms.
The EU amounts disbursed to the member states are regularly published in the “Recovery and Resilience Scoreboard” (see the link below), which shows progress of the implementation of the national recovery and resilience plans.

More information on the issue is in the following Commission websites: = Preliminary assessment; = Questions and Answers on Latvia’s disbursement request under NextGenerationEU; = Press release: € 237 million in pre-financing to Latvia; = Questions and Answers: Latvia’s €1.8 billion recovery and resilience plan; = Factsheet on Latvia’s recovery and resilience plan; = Proposal for a Council Implementing Decision; = Annex to the Proposal for a Council Implementing Decision
Staff-working document; = Recovery and Resilience Facility; = Recovery and Resilience Scoreboard; = Recovery and Resilience Facility Regulation; = Question and Answers on the Recovery and Resilience Facility; = EU as a borrower website

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