Press Releases Eurogroup statement on the updated draft budgetary plan of Latvia

Eurogroup statement on the updated draft budgetary plan of Latvia

The Eurogroup welcomes the submission of the updated draft budgetary plan for 2023 of Latvia on 7 February, as well as the Commission Opinion issued on 24 February 2023.

We recall that the fiscal guidance for 2023 included in the Council recommendations of 12 July 2022 differentiated between member states with high debt levels and those with low/medium debt levels, depending on their fiscal and economic situation. Low/medium debt member states should aim at a neutral fiscal policy stance.

According to the Commission assessment, the draft budgetary plan of Latvia is in line with the fiscal guidance for 2023 contained in the Council recommendation to Latvia: the contribution of nationally financed current expenditure to the overall fiscal stance is expected to be broadly neutral. However compliance risks would arise should Latvia adopt additional energy support or other deficit-increasing measures. We agree with the Commission’s assessment.

We note that the overall fiscal policy stance is estimated to be expansionary in a situation of high inflation, driven however by higher investment. We welcome that the plan aims to preserve nationally financed investment in 2023. Investment will also be supported through the Recovery and Resilience Facility.

We will in 2023, for Latvia, as well as for all euro area member states, examine the budgetary measures to mitigate the impact of high energy prices as outlined in our statement on the draft budgetary plans from 5 December 2022.

The Eurogroup will continue to closely monitor economic developments in the euro area and commits to further reinforce policy coordination in order to deliver a determined and agile policy response.

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