REACT-EU

Logo combination - Funded by the European Union and 2027 National Development Plan

Recovery assistance for cohesion and the territories of Europe (REACT-EU) programme supports investment projects that foster crisis-repair capacities and contribute to a green, digital and resilient recovery of the economy, including support for maintaining jobs, short-time work schemes and support for the self-employed. It can also support job creation and youth employment measures, healthcare systems and the provision of working capital and investment support for small and medium-sized enterprises.

In Latvia's case, the additional funding is targeted towards those fields that play a crucial role in stabilizing country's economic recovery. For example:

  • investments in job preservation;

  • support in creating new jobs for small and medium-sized enterprises;

  • strengthening health sector.

This support is available for various sectors of the economy, including the heavily affected tourism and culture sectors. The additional support will also be used for investments in the European Green Deal procedures and digital transformation measures, with an emphasis on measures in climate action, to which a certain amount of funding is directed, according to the REACT-EU regulation. This will strengthen the large-scale investments that are already being made in the mentioned areas within the framework of the EU's cohesion policy.

50.6 billion euros have been allocated to this instrument on an EU-level that will be made available to the 2014-2020 European Regional Development Fund (ERDF),the European Social Fund (ESF) as well as the European Fund for Aid to the Most Deprived (FEAD) and the Youth Employment Initiative (YEI), providing more opportunities for the activities implemented within this planning period. These additional funds will be allocated in 2021 and 2022 for expenditure till the end of year 2023.

REACT-EU allocation in 2021 for Latvia is 209 989 210 EUR, while the allocated funds amount in 2022 of approximately 62 010 790 EUR is indicative. Ministry of Finance has proposed to set an 85% REACT-EU co-financing rate and 15% national co-financing (state and local government budget, as well as private co-financing) for activities and measures planned within the framework of the REACT-EU action programme, giving the opportunity to implement larger investments or provide support to more projects.

REACT-EU is an initiative with which European Commission continues and expands the investment initiative adopted in the spring of 2020 to overcome the pandemic crisis. With this, the EU sought to mobilize all of its existing budget resources to provide financial aid to its member states for the immediate response to the COVID-19 crisis and its long-term impact.