Dombrovskis: The country was driven into a ditch

After regaining their independence, the Baltic States used the window of geopolitical opportunities to join the European Union (EU) and NATO, stated the Executive Vice President of the European Commission (EC), former Prime Minister Valdis Dombrovskis (JV), on Tuesday, participating in the event where he presented the study “Latvia in the European Union – 20 years”.

He emphasized that at one time it was a strategic choice to move towards EU and NATO membership. In Dombrovski’s opinion, if you look at other countries that have remained in the “gray zone” between Russia and the democratic western world, the situation in them is very complicated.

The executive vice president of the EC emphasized that Latvia has also gained a lot from the EU membership in economic terms. Latvia’s gross domestic product per capita has grown from 42%, guided by purchasing power parity upon joining the bloc, to 71%, despite all the crises it has had to go through. According to him, during the past years, the level of well-being has been significantly increased, as well as economic development has been promoted, where both participation in the EU single market and the extensive funding from EU funds help.

Dombrovskis pointed out that financing from EU funds is still the biggest source of public investment in Latvia. He added that in the period from 2021 to 2027, a total of 10 billion euros are available to Latvia from the EU, so it is important to use this money purposefully and promote the growth of Latvia’s economy and well-being.

Invited to look back on Latvia’s financial crisis in 2008 and the path to Latvia joining the Eurozone, the executive deputy of the EC chairwoman emphasized that “the situation was difficult”. In 2009, when he became the Prime Minister of Latvia, the economy was overheated and, according to Dombrovskis, the country was “steered into a ditch”.

The executive vice president of the EC stated that the political force he represented – “Jaunais laiks” – was in the opposition, but suddenly the ruling parties no longer wanted to lead the government. At that time, he admitted that politically it could all end, if the situation were not different. Dombrovskis stated that there was a clear strategy for getting out of the crisis, and the final goal of this strategy was to join the eurozone on January 1, 2014, which was also achieved.

Asked what Latvia should focus on in the coming years, being in the EU, Dombrovskis noted that these are security and geopolitical issues, which are particularly relevant for Latvia, living next to the aggressor Russia. He pointed out that the security and military sphere of the EU is new, as the bloc was historically created as a peace project and to prevent the recurrence of war on European territory.

“Unfortunately, war on European territory has become a reality. The EU must review what it is doing in the field of security and the development of the military industry. It is important that Latvia be among those countries that keep this priority on the agenda, focusing on the eastern border, because that is where the danger comes from ,” said the executive vice president of the EC.

In his opinion, in the short term, one should not lose focus from supporting Ukraine, which is fighting not only for itself, but for the security of Latvia and the whole of Europe. Dombrovskis emphasized that it is important for the financial support to continue, but the military support is no less relevant, because other authoritarian regimes are also watching what Russia is doing – if the democratic western world will not be able to stop Russia, other regimes will also have ideas of what the new world order should look like. .

“It is a much broader issue. It is not only necessary to draw the big geopolitical picture, but to focus on what needs to be done now to support Ukraine. There are also issues of economic competitiveness. The EU has enough big challenges – decades of slower productivity growth compared to other large economies such as China and the US, the aging of the population, the relatively high energy prices. These are the issues that need to be worked on when making the economic, green and digital transformation and focusing on the things needed to maintain and strengthen the EU’s competitiveness,” said Dombrovskis.

LETA already wrote that the study “Latvia in the European Union – 20 years”, which, based on current data and analysis, continues to evaluate Latvia’s achievements as a member of the EU. The previous studies looked back at Latvia’s achievements, marking respectively the 10th and 15th anniversary of Latvia’s accession to the EU.

The authors of the study are Žaneta Ozoliņa and Šteinbuka, the leading researcher of the University of Latvia, who worked on the study together with the Latvian Association of Political Scientists and the public opinion research center “SKDS”.

The study analyzes both overcoming the financial crisis and ten years of experience, as Latvia is a member state of the eurozone, as well as the Covid-19 crisis and the EU’s role in mitigating it. The study also looks at the challenges of inflation and growth and the importance of EU budget funds in the development of Latvia.

The study also examines the public’s attitude towards democracy, Europe’s response to disinformation, the aspect of public trust, as well as Latvia’s involvement in European-level decision-making, aspects of the expansion of Latvian politics and challenges in the field of security.