The Commission has adopted its Opinion on Latvia’s updated Draft Budgetary Plan for 2023. The Plan presented by the Latvian authorities updated the no-policy-change plan submitted by the outgoing government in October 2022.
This Opinion finds that, overall, Latvia’s updated Draft Budgetary Plan is in line with the Council Recommendations of July 2022. Latvia plans to finance additional investment through EU funds and preserve nationally financed investment which is driving the expansionary fiscal policy stance. It also plans to finance public investment for the green and digital transitions.
While Latvia rapidly deployed measures in response to the increase in energy prices, it is important that Latvia increasingly focuses such measures on the most vulnerable households and exposed firms, to preserve incentives to reduce energy demand, and withdraws these measures as energy price pressures diminish.
The Commission is also finds that Latvia has made some progress on the structural part of the fiscal recommendations contained in the Council Recommendations of July 2022 which required Latvia to broaden taxation and strengthen the adequacy of healthcare and social protection to reduce inequality.
Under the European Semester, the Commission issues Opinions on the Draft Budgetary Plans of eurozone member states each year. The Eurogroup will now discuss the Commission’s Opinion. The national parliament should then take this discussion into account before adopting the budget for 2023.
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