After evaluating the specific circumstances, the Central Finance and Contracting Agency (CFLA) has identified that financial corrections of 25% and 10% are applicable and has made the corresponding decisions. The total sum of ineligible expenditure in ERDF projects under the supervision of the CFLA is €18,893,728, of which €16,487,050 is the amount of the correction attributable to ERDF co-financing and €2,406,677 to state budget funding. The aforementioned ineligible expenditure has already been withheld from the payment declaration to the EC, CFLA representatives indicated to Diena.

Based on the Competition Council decision, procurement contracts in 25 ERDF co-financed projects were negatively affected. In the event of a competition infringement, the CFLA is obliged to apply a financial correction; that is, to cancel or reduce the amount of financial support in EU fund projects. Depending on the situation, the support reduction can be 100%, 25% or 10% of the relevant affected procurement contract amount.

The CFLA has currently already adopted interim decisions, determining the amount of the correction in all procurements affected by the cartel, and these decisions have been notified to the funding recipients. "Based on the principles of sound financial management, the decisions also include the suspension of payments in active projects to the extent of the potential financial correction. Funding recipients have used the opportunity to challenge these decisions with the managing authority, and all decisions have been upheld. Once there is a final decision in the case, the agency will be able to carry out full recovery of funds (if the Competition Council decision remains in force)," the CFLA indicated.

"The importance of EU funds in the Latvian economy is quite significant, especially in certain sectors, such as agriculture and construction, but one should certainly not overestimate the extent of the impact of EU funds. For example, in 2021, Latvia received approximately 1.2 billion euros from EU funds. That is slightly more than 3% of Latvia's GDP, however, in 2021, Latvia paid slightly more than 300 million euros into the EU budget and, therefore, the actual contribution to the Latvian economy is approximately 2.5% of GDP. Access to the EU single market and the low interest rates provided by our membership in the eurozone give the Latvian economy much more than EU funds, even though they are very significant in several sectors," states Citadele bank economist Mārtiņš Āboliņš.
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