Analytics, EU – Baltic States, Financial Services, Funds, Investments, Legislation

The European Commission has adopted the "Partnership Agreements" with the Baltic States (Latvia, Lithuania and Estonia) setting down the strategy for the optimal use of European Structural and Investment Funds aimed to benefit the countries' economic development, regional optimization, research, education and people’s wellbeing.

There are five “investment sectors” in the European Structural and Investment Funds (ESIF); they are: the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund, the European Maritime and Fisheries Fund (EMFF) and the European Agricultural Fund for Rural Development (EAFRD). 

European investment in the Baltics

The EU investments will improve economic productivity in the Baltic States, promote innovation and R&D investments and contribute to the creation of a modern, sustainable and efficient transport system. They will contribute to a balanced territorial development and the creation of an environmentally-friendly and resource-efficient economy, aiming to create quality jobs and fight social exclusion. The investments will also enhance the quality of the education system and the effectiveness of public administration.

The agreement adopted on 20^th June 2014 paves the way for investing in the following three Baltic States:

In Latvia: €4.51 billion in total Cohesion Policy funding over 2014-20 (including European Territorial Cooperation funding), €1.07 billion for rural development and almost €140 million to support the development of the fisheries and maritime sector.

In Lithuania: €6.82 billion in total Cohesion Policy funding over 2014-20 (including European Territorial Cooperation funding), €1.61 billion for rural development and €63 million to provide funding for the development of the maritime sector and implementation of the Common Fisheries Policy.

In Estonia: €3.59 billion in total Cohesion Policy funding over 2014-20 (including European Territorial Cooperation funding), €726 million for rural development and €101 million for the fisheries and maritime sector. 

Commission’s opinion

Several commissioners, including the Commission President, expressed their views on the importance of European funds for the Baltic States’ economic and social development.

Thus, commenting on the adoption of the "partnership agreements" with the Baltic States, President of the European Commission, José Manuel Barroso underlined that European funds are, generally, to support the strategies of the three Baltic States for smart and sustainable growth. They are aimed to combine the new approach to the European cohesion policy for 2014-20 with the EU-2020 strategy’s priorities. These EU “fund investments”, he said, will help to create lasting jobs and boost growth through support to innovation, training and education and a low carbon, resource-efficient economy.

European Commissioner for Regional Policy, Johannes Hahn underlined that “investment funds” are “vital, strategic investment plans that will guide the Baltic States on the path of jobs and growth for the next 10 years”. The “partnership agreements” reflect the EU’s and member states joint determination to make the most efficient use of EU investments. Thus, in the context of the reformed European cohesion policy, the investments must be strategic, focusing on the real economy, on sustainable growth and investing in people.

The “investment strategies”, he said, are built on the on-going efforts of the Baltic States to tackle some of the pressing problems, including higher share of R&D investments, more renewable energy sources, combating poverty and increasing the level of employment, especially for young people.

Commissioner for Employment, Social Affairs and Inclusion, László Andor emphasized that the EU’s finalized partnership agreements with Estonia, Latvia and Lithuania provide for optimism in their constructive co-operation with the Commission. Three Baltic States decided to dedicate a substantial part of the Cohesion Policy funding under the growth and jobs objective to the European Social Fund (ESF): Estonia about 24%, Latvia 21% and Lithuania over 24%. The ESF will help to redress the social impact of the economic crisis and will improve the countries' labour market situation by providing people with relevant skills, supporting unemployed people in their job search and helping those furthest away from the labour market to find a job.

Commission expressed a view that the EU’s “investment money” will lend a significant support to meeting the EU-2020 employment and poverty targets while focusing on the specific needs of each country. Hence, “investment in people is a key to achieving sustainable and inclusive growth”, he concluded.  

Commissioner for Agriculture and Rural Development, Dacian Cioloş argued that partnership agreements are important to ensure that EAFRD support for rural development programs is coherent with other European structural and investment funds, as well as other EU administrative and financial instruments. The EU funds, he stressed, “ensured synergy and complementarity, coordination and greater efficiency in the use of the EU financial support: as rural development has been a vital pillar of EU agricultural policy while addressing economic, environmental and social issues coped with territorial cohesion in rural areas according to specific needs of Estonia, Latvia and Lithuania.

Commissioner for Maritime Affairs and Fisheries, Maria Damanaki underlined that the reform of the EU’s common fisheries policy, the EU aimed at fostering environmentally sustainable, innovative and competitive fisheries and aquaculture, including marketing and processing.  The European Maritime and Fisheries Fund is also the financial instrument that will promote employment and territorial cohesion by providing financial support to fishermen, fish farmers and coastal communities in the Baltic States.  

Reference: European Commission, IP/14/701 “Commission adopts ‘Partnership Agreements’ with Baltic States for EU Structural and Investment Funds, 2014-20”; 20 June 2014.

The three partnership agreements for the Baltic States are delivered by President of the European Commission José Manuel Barroso to the Prime Ministers of Latvia, Lithuania and Estonia in Tallinn on 21^st June 2014.

All EU member states have already presented their partnership agreements to the Commission; the adoption of these agreements will follow after a process of consultation.

More general information on the partnership:

= MEMO on Partnership Agreements and Operational Programs, in: www.ec.europa.eu/esif;

= http://europa.eu/rapid/press-release_IP-14-701_en.htm?locale=en

Information on countries’ partnerships:

= In Latvia:

http://www.esfondi.lv/page.php?id=1149.European Commission-Latvia Partnership Agreement

http://ec.europa.eu/contracts_grants/agreements/index_en.htmSummary of the Latvian Partnership Agreement

http://ec.europa.eu/regional_policy/information/cohesion-policy-achievement-and-future-investment/factsheet/latvia_en.pdfCohesion Policy and Latvia

Latvian government’s comments see here

= In Lithuania:

http://www.esparama.lt/strateginiai-dokumentai1European Commission – Lithuania Partnership Agreement;

http://ec.europa.eu/contracts_grants/agreements/index_en.htmSummary of the Lithuanian Partnership Agreement;

Cohesion Policy and Lithuania;

= In Estonia:

http://siin/European Commission – Estonia Partnership Agreement;

Summary of the Estonian Partnership Agreement;

Cohesion Policy and Estonia;