Economy & Politics: What the results of the EU Corona Summit mean for Latvia financially

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At a special summit on July 21, 2020, the representatives of the EU countries agreed on the largest financial package in their history in the fight against the corona economic crisis. The package comprises a total of 1.8 trillion euros – thereof 1074 billion euros for the next seven-year budget and 750 billion euros for an economic and investment program to counter the economic consequences of the pandemic crisis. For this, debts are being raised on a large scale for the 27 member states, then the money is redistributed and repaid together over decades.

The style of the negotiations was tough and the tone was often harsh, the positions of the negotiators were so opposed. For Latvia, acting Prime Minister Krišjānis Kariņš traveled to Brussels to get the best out of his country. His style of negotiation was praised by Latvian journalists critical of the government as well as conservative German MEPs. At the end of the negotiations, Kariņš actually managed to get comparatively large grants.

For one euro that Latvia transfers to Brussels, it will get back 3.60 euros in the future. In less abstract numbers, this means that Latvia will get € 10.44 billion out of the European money box over the next seven years. Subsidies will also increase for chronically underfunded Latvian farmers. Instead of currently 179 euros by 2027, they will receive 215 euros per hectare as direct payments from Brussels. That is still significantly less than in most EU countries, but better than nothing.

Image: The global economy is suffering from the corona crisis, including Latvia. Port facility in the Sarkandaugava district in Rīga. Picture taken 2014. Double click on the image to enlarge.

Image: The global economy is suffering from the corona crisis, including Latvia.
Port facility in the Sarkandaugava district in Rīga.
Picture taken 2014.
Double click on the image to enlarge.

 

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