Latvia Economic and Defence Update

CURRENT STRONG FOCUS ON GROWTH FRIENDLY EXPENDITURE AND COMMITMENT TO FURTHER REFORMS RRF and EU financing will support the implementation of the crucial investment and reform measures, including climate and digitalisation Change in the share of growth friendly expenditure, by Member State (2001-2019, % primary expenditure) Recovery and Resilience plan (RRF) (Adopted by the Council on July 13, 2021) 4 0 -4 -8 Source: EC Report on Public Finances in EMU 2021 10% 37% 20% 1.82 bn EUR ■Climate 676.2 M € ■Rule of law 37 M € ■ Economic transformation 196 M € Digital transformation 365.2 M € ■Reducing disparities 370 M € 20% 11% Health 181.5 M € 2% Source: Ministry of Finance EU Funds 2021-2027 EU Cohesion policy Programme adopted on November 25, 2022. Line ministries are working on fast-tracking implementation of planned investments within Programme. First call of project proposals had been launched on March 6, 2023. CLIMATE 4% 5% ■ Smarter Europe 968 M € 19% ■ Greener Europe 1175 M € ■ Connected Europe 919 M € ■ Social Europe 1461 M € 29% 5 bn EUR 24% 16 19% Source: Ministry of Finance DIGITAL TRANSFORMATION REDUCING DISPARITIES HEALTH ■ Europe closer to citizens 263 M € ■ Just Transition Fund investments 217 M € ■ Capacity building measures (TA) 5 M€ ECONOMIC TRANSFORMATION (II Reforms in Latvia under RRF - - Transition to sustainable transport, energy efficiency in all sectors, wind farms Coordination mechanisms for public digital services, digital skills Administrative territorial reform, GMI reform Healthcare network effectiveness, remuneration reform Innovation eco-system, consolidation of higher education institutions Strengthening capacity of law enforcement agencies RULE OF LAW STA

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