According to the Office of the President, Levits contacted the Prime Minister on Thursday and discussed the EU economic recovery plan proposed by the European Commission after the crisis caused by the new coronavirus disease Covid-19, as well as the link between the recovery plan and the EU multi-annual budget.
The President emphasized the need for smart investment in science and education, which would have a lasting effect on the country’s growth.
“We must not use investment as a lit match that wears out after a while. We need to invest in science and education that will have a long-term impact on the country’s development. It would be in the interests of all parties in government to agree on this kind of support. “said the President.
The two sides discussed the progress made in developing an application for Latvian companies and creative people, which will help the society to join forces and limit the spread of the new coronavirus in a democratic way.
During the conversation, the President expressed the position that it was necessary to establish an Academy of Judges and Prosecutors, which, in addition to daily work, would allow maintaining a high professional qualification throughout the working life.
Yesterday in Brussels, the EC presented an updated legislative proposal for the next EU multi-annual budgetary planning period and a proposal for an Economic Recovery Instrument.
The EC has updated the proposals published in 2018 to provide an EU response and mitigate the effects of the new coronavirus pandemic, as well as to promote economic recovery.
The EC proposes to invest € 1.850 trillion over the next seven years. € 1.1 trillion would come from Member States’ contributions to the next multiannual financial framework, which would be similar to the funding currently being provided, while € 750 billion would come from EC borrowing on the financial markets. EUR 500 billion of this amount would be provided in the form of grants and EUR 250 billion in the form of loans.
EC borrowing on behalf of the EU to finance spending programs is a new solution that increases the level of solidarity and strengthens EU integration. This loan is planned to be repaid in the period from 2027 to 2058. As one option, the EC offers these refunds through new EU-wide taxes.
About 80% of this € 750 billion will go to the Instrument for Renewal and Sustainability, which would in fact be a new budgetary program within the EU’s multiannual budget. The instrument will, upon request, support Member States’ investment and reform plans, which they will have to prepare and submit to the EC for approval, and will in fact be the main instrument for mitigating the negative economic consequences of the Covid-19 pandemic. More than half, EUR 310 billion, will be provided in the form of grants and EUR 250 billion in the form of loans.
The 55 billion will also be mobilized to increase existing cohesion policy programs. Five billion euros would be allocated already this year by amending the EU’s multiannual budget for 2014-2020, and 50 billion in the period from 2021 to 2022 – from the mentioned EC loan.
With regard to support for business recovery and competitiveness, additional support mechanisms are offered through InvestEU – expanding its involvement in innovative projects, as well as strengthening the capital base of companies through a new Solvency instrument. EUR 26 billion of the EC loan will be allocated to these programs to cover expected losses to support mechanisms.