Latvia's Priorities for the Next EU Multiannual Budget Reflect Reality and Geopolitical Priorities

Strategic Insights -

As the European Union (EU) prepares to negotiate its next multiannual budget, Latvia has already made its position clear. The country's national priorities for the EU budget negotiations are centered around four key areas: security and defense, cohesion (regional development and investment), the Common Agricultural Policy (CAP), and Rail Baltica. Latvia's position reflects the country's unique situation and needs in the current geopolitical context.

Key Takeaways:

  • Latvia's national position for the EU budget negotiations has been approved by the Saeima, with four key priorities: security and defense, cohesion, CAP, and Rail Baltica.
  • The EU's proposed multiannual budget (2028-2034) emphasizes security as a central priority, aligning with Latvia's current situation and needs.
  • The proposal supports a broad scope of EU defense activities, including strengthening the defense industry, military mobility, and connectivity.
  • Latvia will have to compete with other 26 EU countries for security and innovation funds, which are expected to be allocated without guaranteed national "envelopes".
  • The country's expertise in defense, public sector competence, and cooperation with the private sector and science will help it compete effectively.
  • Latvia will continue to advocate for maintaining the Cohesion Policy and Common Agricultural Policy as separate and important areas with clear and predictable financing.
  • The country welcomes the EC proposal's emphasis on the Eastern border, but notes that it does not sufficiently reflect the disproportionate socio-economic impact of Russia's war of aggression on EU countries bordering Russia and Belarus.

Statistics:

  • Latvia receives approximately 10 billion euros from the EU budget annually, accounting for around 10-15% of the country's total state budget expenditure and 40-50% of total public investment.
  • The proposed total EU budget for 2028-2034 is almost 2 trillion euros, compared to 1.2 trillion euros in the current period.
  • 80% of cargo crossing the Latvian border to Russia or Belarus comes from other EU countries, requiring significant administrative resources and expenses from the Latvian state budget.

Sources:

  • European Commission (EC) proposal for the EU multiannual budget (2028-2034) published on July 16 (EC, 2023)
  • Latvia's national position on the EU budget negotiations approved by the Saeima on January 15 (Saeima, 2023)
  • Ministry of Foreign Affairs of Latvia press release (2023)
  • Ministry of Finance of Latvia press release (2023)