The results of the long negotiations on the next multiannual budget of the European Union (EU) and the Economic Recovery Fund are even better than expected. This time, the Prime Minister of Latvia has been actively involved in the negotiations, resolving the contradictions of other countries, and the achieved result proves that “the giver is giving up”, LTV admitted Prime Minister Krišjānis Kariņš (“New Unity”).
- In five-day talks, EU leaders agreed to split € 1.8 trillion.
- Latvia will receive 10.44 billion euros in the next seven years.
- This is 3 billion or 39% more money than in this programming period.
- Direct payments to Latvian farmers will increase by 40%.
- There is additional funding for Rail Baltica and 1.7 billion for military mobility.
- Kariņš: There is an amount of money that is even bigger than I had hoped.
- The Prime Minister has doubts about the use of the 2.5 billion euro loan.
- Kariņš has been involved in solving problems during the talks.
- Kariņš: We are part of the solution, and we must be aware of that ourselves.
The talks lasted five days and end only on Tuesday at around 6 am, and the leaders of the European Union member states agreed to split € 1.8 trillion. This amount comes from the seven-year budget, together with the new Economic Recovery Fund, which aims to help Europe recover from the Covid-19 crisis.
The Economic Recovery Fund remains as planned at € 750 billion, but the share of grants has been reduced from € 500 to € 390 billion and the share of loans has been increased. It is a concession to austerity countries, led by the Netherlands. But Italy and Spain are not uneasy either.
This reduction also means reduced spending on research and action on climate change, which the EU considers a priority.
Latvia will have 10.44 billion euros available over the next seven years, which is 3 billion or 39% more European money than in this programming period, thanks to the new Economic Recovery Fund.
Thus, Latvia still pays less into the EU budget than it receives – for every euro paid, Latvia receives 3.6 euros.
In the new budget, the increase in the Cohesion envelope is 1%, but the total funding for agriculture will be 25% higher than now.
For example, direct payments to Latvian farmers will increase by 40%. At present, Latvian farmers receive 179 euros per hectare, but in 2022 they will receive an average of 200 euros per hectare, in 2027 – 215 euros per hectare.
There is also additional funding for the Rail Baltica project and € 1.7 billion for military mobility – adapting infrastructure to military needs.
“There is an amount of money that is even bigger than I had hoped we could achieve. Very good result, ”LTV acknowledged the Prime Minister.
The use of part of the loan will have to be discussed with the Ministry of Finance and the Treasury, possibly using it to partially refinance Latvia’s existing debt, but the Prime Minister doubts the need to “go deeper into debt”. “But it means that for us, the ‘pillow’ behind us is even thicker,” said Kariņš.
Watching the European Council talks and listening a little behind the scenes, it is understandable that countries are choosing different bargaining strategies, because the disputes here are not only about money, but also about principles. Some countries walk with outstretched arms and tell how bad things are, others, like the Netherlands, take an iron position, essentially raising an ultimatum. However, it must be said that it is working and the group of “austerity” countries that opposed the grants has got good conditions.
Latvia chose another bargaining tactic, which this time proved to be very successful. The Prime Minister of Latvia, Krišjānis Kariņš, was actively involved not only in resolving his own issues, but also in resolving issues of other countries, and for a while together with German Chancellor Angela Merkel he also led negotiations. Of course, by helping one, the other, a third country, it has been easier to get more for Latvia after that.
Namely, when you get involved in the process, you don’t have to distribute the money, but you are happy to give it, because you fight for others as well.
“We are already looking for those who are part of the solution, not part of the problem. And Latvia is now increasingly proving that we can not only reach out and ask for something, but we are already at the level and in the club that we are equal to everyone else.
We are part of the solution. And we need to be aware of that ourselves, ”said Kariņš.
Asked whether conducting negotiations with Merkel is the reason why Latvia received more money than previously expected, Kariņš alone determined that “the process is multifaceted, it certainly did not come bad”.
The Prime Minister acknowledged that several days of talks “went sharply and at least three times I was internally convinced that this time [sarunas] will collapse ”.
“We had come to that point several times, but before we took the next step collectively, we stepped back collectively and found a way forward. I myself am very active in issues where we may not have such a mercantile interest, but when you are in the process and help each other, sometimes the other can help you. This Latvian proverb – given to the giver gives back – this time it is. This result is really good for us, “said Kariņš.
Asked how to endure long conversations until the morning, the Prime Minister admitted that he does not know, but “maybe it is the hardening of youth in sports, I also drink a lot of coffee. From the outside, it’s probably a lot more tiring to watch than to be inside. Because inside the process the mind is employed and you solve a specific process. This is the job description.
Well, five days – it’s not in the job description, I wouldn’t recommend it to anyone and I wouldn’t wish it to anyone, “said Kariņš.
The EU’s budget for the next seven years has now been approved and, together with the Economic Recovery Fund, represents the largest European budget ever, even after one of the major contributors, Britain, has left the EU. The budget has yet to be approved by the European Parliament.