Priorities for 2019 – MPC, export, investment and housing availability

23-04-2019

The government action plan includes 54 tasks, the main performer of which is the Ministry of Economics, and over 70 tasks, where the Ministry of Economics is one of the responsible persons. Here we are talking about the improvement of the business environment and the support programmes for entrepreneurs, putting in order the construction process and the changes in the housing policy, major issues in the energy sector, and the measures of the internal market, and strengthening of economic cooperation with the foreign countries important to us.

 

“The priorities of the Ministry of Economics for 2019 are the reduction of MPC costs by developing regulatory enactments for the elimination of the mandatory procurement component for electricity, promoting export and investment growth, as well as promoting housing availability, providing guarantees for the purchase of housing for families with children and young specialists, as well as developing a support programme for the construction of rental housing,” emphasises Ralfs Nemiro, the Minister of Economics.

 

However, looking back at what has been done in the first 100 days, the Minister admits that they have been full of intensive work, during which, without “warm-up”, we had to be able to look deep into different issues and to prepare decisions that are important for both the population and entrepreneurs.

 

First, by fulfilling the task given at the meeting of the Saeima of 10 January 2019, the MoE drafted amendments to the Electricity Market Law, as well as an informative report on the fulfilment of that task. However, the Cabinet of Ministers rejected the prepared draft law for cancellation of MPC, at the same time taking a decision to send an informative report on the fulfilment of the task to the Saeima, as well as instructed MoE to develop proposals for alternative action lines to address the issue of mandatory electricity procurement (MP) within two months. “At present, I have found a lot of fundamental gaps in the support of renewable energy. The Ministry of Economics led by me has the political will and commitment to finally fix the rusted and bloated MPC system in a legal and governmentally responsible way, in order to reduce electricity costs for the population, entrepreneurs, and the state budget. The system of support for electricity producers needs to be put in order and it is necessary to ensure that, in the future, support from the state and taxpayers is provided only to exemplary undertakings. It is necessary to create clear conditions for sustainable development of the RES sector and to restore the sector’s reputation. And, whether we want it or not, Latvia needs to ensure that the renewable energy and GHG emissions targets for 2020 and 2030 are met. In addition, we would like to promote the involvement of Latvian population in energy efficiency and the RES production, for which I, as a minister, am committed to provide fair regulatory framework,” continues the Minister. Taking into account the decisions of the meeting of the Cabinet of Ministers, by the end of this May the Ministry of Economics will develop specific measures for putting in order of the state aid system and proposals on how to create incentive conditions for the operation of power plants outside the state aid system.

 

Second, it is important for the country to promote housing availability in order to strengthen the desire of families with children to stay in their homeland, as well as to motivate compatriots to return to Latvia. Therefore, the allocation of 2.8 million euro in additional funding for the housing guarantee support programme implemented by Altum will allow to grant guarantees to another 1500 families with children. At the same time, it is important for Latvia to put in order the existing housing facilities, to create a sustainable environment for people and business development. “Over 10 years, since the population of Latvia has access to co-funding from EU funds to implement energy efficiency measures in their buildings, more than 800 multi-apartment buildings have been renovated; several hundred projects are currently still in the process of implementation. The Ministry of Economics has started work on the development of documents for the next programming period of EU funds, in which we certainly see continued support for energy efficiency and broader use of renewable energy sources in multi-apartment, public and production buildings,” emphasises the Minister.

 

Third, the situation regarding the Deglava bridge has been a matter of concern over the last week. “I cannot and must not close my eyes to the reasonable doubts expressed by the building inspectors about the safety of the overpass. The functioning of the bridge would have to be interrupted for as long as it is unclear whether it is safe for the population. And Deglava bridge is just the first step. In response to the community concerns, in the foreseeable future we are planning to focus on the safety of other bridges in Riga, further encouraging changes in the regulation that would give more powers to the State Construction Control Bureau,” says the Minister of Economics.

 

Fourth, the Minister of Economics has carried out an assessment of the application of the Energy Efficiency Law, prepared and the Saeima has already approved in the first reading amendments to the Energy Efficiency Law, which will allow not to impose the energy efficiency duty on those companies that conducted an energy efficiency audit with a delay. “I look forward to the continuing care of entrepreneurs, in particular large companies and large energy consumers, to increase energy efficiency in their companies. This will help companies to improve their internal processes, use energy sources more responsibly and ultimately reduce their electricity and heat bills, thereby significantly increasing the competitiveness of their business and the competitiveness of the Latvian economy as a whole,” says the Minister.

 

Fifth, at the Saeima meeting of March 28, amendments to the Competition Law, which will contribute to ensuring fair competition in the activities of public persons (state and local governments) and capital companies founded by them, were supported in the final reading, thereby promoting free and fair competition in the long term, creating the most favourable environment for business and investment in Latvia. The Saeima also supported amendments to the Labour Law entitling to provide for a lower supplement for overtime work under the generally binding general agreement, which, at the same time, cannot be below 50% of the hourly rate specified in the general agreement, provided that the general agreement envisaged a significant increase in remuneration in the sector.

 

As it is known, on 23 January 2019, the Saeima gave a vote of confidence to the Cabinet of Ministers led by the Prime Minister Krišjānis Kariņš, confirming Ralfs Nemiro in office of the Minister of Economics. Ralfs Nemiro is the 23rd Minister of Economics, who has served as the Minister of Economics in different governments since 1 March 1990.

Last update:    28-01-2020