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Wednesday 01.04.2020 | Name days: Dagne, Dagnis
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Dombrovskis: economic development will be Latvia’s focus in EC’s new plans

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development, EC, Latvia, economic growth, GDP

Valdis Dombrovskis

The new main priorities for European Commission will be «green transformation» and movement towards climate neutral economy, digital transformation and economic development, says EC vice-president Valdis Dombrovskis, admitting that Latvia will have the most to do in economic development and social matters.

«We have to understand that ‘green’ and digital transformation will significantly change the economic structure. This is why, on one hand, it is important for the European economy retains its competitiveness and on the other – to ensure transformation is performed in a socially acceptable way, securing inclusive growth and reduction of income inequality,» says Dombrovskis, adding that for his areas of focus this will mean work on deepening Europe’s economic and monetary union or Eurozone reform, finishing work on European Banking Union, European Capital Market Union’s future development, as well as adding investments in Europe’s economy. The latter includes work on Invest EU programme.

«We spoke about ‘green transformation’. My responsibility would be working on development of Europe’s sustainable investment plan intended to mobilize one trillion euros of sustainable investments,» says Dombrovskis, adding that there will be new proposals about a green finance plan.

«As for digital transformation, social matters are a priority here. It will be important for us to review the approach to labour regulation and relations on the labour market. We can see under digitization so-called platform economy plays an important role, as it creates new forms of labour relations. Nevertheless, it is important for these people to pay social fees and become involved in social insurance system,» says the EC vice-president. In the finance field the main amount of work will be related to financial technologies. There are also plans for a new action plan with regulations for crypto currency.

«If we look at the aforementioned three priorities, Latvia is among eight EU member states that have proposed an initiative for ‘green transformation’ and long-term goal to ensure climate neutrality in 2050. Latvia currently has one of the highest renewable energy production ratios and one of the lowest CO2 emission volumes per capita in the EU. This means Latvia is ahead of other member states in certain areas. The same can be said for digitization. If we look at different digitization indexes, Latvia is definitely on the first, not second place,» says Dombrovskis.

«The general economic development is more complicated because GDP per capita in Latvia is the fourth lowest in the EU. This is why Latvia needs to move towards EU economic development indexes. Latvia is also noteworthy in terms of income inequality. This is why it is necessary to act in areas to help further reduce income inequality. Latvia still has a lot to do in economic development and social affairs,» says the EU vice-chairman.

He says one important topic is about the way Latvia’s economy continue developing and the way to avoid so-called income trap. «There is no other way aside from raising economic productivity and raising added value in different economic sectors. This is where investments in technologies and automation are very important. This is a fundamental matter for Latvia’s economy. It is no surprise EC has come with initiatives to create productivity councils in the EU. Latvia has started forming cooperation with University of Latvia. It will be an institution that will follow productivity matters systematically, as well as prepare recommendations for the government, executive institutions and policy-makers,» says Dombrovskis.


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