Decisions made in the myth-shrouded corridors of Brussels are real and impact the daily lives of every Latvian company and resident every single day, which is why Latvia needs strong and knowledgeable people who will stand up for our desires and needs at the European Union level, preventing them from being lost in the corridors of institutions.

2023 has brought new challenges not only for the Latvian economy and business environment but also for the European Union (EU) and the global economy as a whole. To mitigate the negative consequences of the economic crisis, improve the business environment, and promote the competitiveness of European entrepreneurs, the EU has set several priorities for this year, aiming to stimulate economic and business development through well-considered decisions and appropriate support measures. The upcoming 2024 EU Parliament elections will also bring certain shifts to everyday life in Europe.

Back in 2001, the group “Labvēlīgais tips” sang the song “Europe won’t understand us, Europe won’t know us”, and this is also confirmed by the export figures of goods and services created in Latvia to European Union countries. In 2001, we exported approximately 1 billion euros worth; by 2021, that figure had reached 11 billion euros. As they say, Europe has got to know us a bit more, but there is still room for growth. This year, the European Single Market (free movement of goods, services, and capital in the EU) celebrates its thirtieth anniversary; this definitely prompts a discussion on the functionality of the EU Single Market and the motivation of member states to open their markets to merchants from other member states of the union. In Latvia, we are currently discussing economic transformation, support for business productivity, and export capacity a great deal, but this equation has a second term – market access, specifically markets where there is a need and purchasing power to buy what is produced in Latvia. Currently, a great deal depends on national policies regarding how difficult it is for foreign companies to enter each country's market. Hindered operation of the EU Single Market means delayed economic growth, unreached consumers, and missed development opportunities. Such a situation is particularly unpleasant for small countries with small markets that need to develop new export directions. On this issue, Latvia must be insistent – the full functioning of the Single Market is a priority.

To stimulate the economy and business, the EU is also working on creating external trade routes with third countries – in North America, Asia, South America, and elsewhere. In theory, this opens up new export opportunities for European entrepreneurs, but the question of the real ability of Latvian companies, especially in the small and medium-sized enterprise segment, to deliver their goods and services to these countries and operate fully in the market is debatable, as the financial capabilities of companies differ very sharply across EU member states. Unfortunately, the current EU economic alignment policy has not yielded the expected results, and while economic development is occurring in some countries, it continues to lag in others, causing them to fall into so-called development traps. We must start a discussion now about what the EU Cohesion policy will be after 2027. I think it is clear to all involved parties that the current model is not working and that new solutions are needed to ensure general growth in prosperity and economic growth in all member states.

At the end of the year in the European Economic and Social Committee, we adopted a report on the need to focus on competitiveness aspects in all EU policies, at all stages of their adoption. Reducing bureaucratic, financial, and other burdens at all levels is just one step in the right direction. A broader analysis of business competitiveness risks and the possibilities for preventing them is needed in the near future. It is positive that the Swedish Presidency has defined boosting competitiveness as one of its priorities for the next 6 months. Here, it is valuable for policymakers in Latvia to listen to organizations representing entrepreneurs and work together so that the individual competitiveness of each country, and thus the overall competitiveness of the EU, would increase.

This year, EU policymakers also plan to pay special attention to reducing liquidity risks in small and medium-sized enterprises. In recent years, entrepreneurs have endured two major shocks – the crisis caused by the C19 epidemic and the crisis caused by Russia's war in Ukraine, which has led to massive inflation, supply chain disruptions, and other problems. Therefore, one of the priorities is the development of appropriate support mechanisms to overcome the consequences of crises. The European Commission plans to revise the EU directive on combating late payment, with the aim of reducing the risk that a customer does not pay a supplier, as well as shortening the time period between issuing an invoice and payment, because during this period, the company becomes a creditor to its client, working capital decreases, and business operations are essentially disrupted. The annual “European Payment Report 2022” by the credit management company “Intrum” shows that in Latvia, 89% of surveyed companies have encountered delayed payments from debtors.

This year promises to be challenging. While not explicitly mentioned here, the war in Ukraine will continue to affect our daily lives, just like the decisions made in Brussels. Quoting the “classics”: “it’s the good old Koka Klucis Konstantīns, he is good for nothing”. Representing Latvian interests in the EU must become a priority at all levels. Latvia needs strong and knowledgeable people who will not allow our national interests to get lost in the corridors of EU policymakers. But most importantly – interests must be clearly defined and argued.