Dear ladies and gentlemen,
In accordance with the Rules of Procedure of the Saeima the Government has submitted its regular report on achievements and plans with regard to issues of the European Union. Now it is presented to you for review. The report has been produced during a period when Latvia made a big and substantial step towards membership in the EU – namely, on 16 April in Athens we signed the historic Accession Treaty with the European Union. This week the Government has submitted this Treaty to the Saeima. The Government presents it to the elected representatives of the people for review and further progress to a public discussion and popular vote. It must also be reviewed on which conditions Latvia will join the European Union. I would like to urge and encourage members of the parliament to discuss these conditions, their consequences and our future in the European Union, which, undeniably, will contribute to the information campaign of the society at the eve of the referendum this autumn.
We should bear in mind that very soon we will be asked to jointly decide our own future and future of Latvia. Whether to be together with the other European nations or to stand aside Europe’s unification process? Everybody will be asked to answer the question: will Latvia be stronger in Europe or outside it? Will Latvia be more secure in Europe or outside it?
These are fundamental and decisive questions. And we are now at the eve of this historic decision. Thus, it is easy to understand anxiety and interest of the society before this decision. This is the reason why we have initiated this discussion; this is the reason why we continue to argue about our benefits and other matters.
I would like to begin with such fundamental matters as strength, power, influence and status of Latvia. In the European Union Latvia’s influence will increase substantially. Being a member-state we will have the opportunity to better support our interests in Europe and our interests towards any third countries.
First, when we analyse the issue of sovereignty of Latvia, it is greatly influenced by the adjacent European Union. If we need European markets, if we intend to sell our products there, we have to comply with the requirements set for these products. However, at the moment we are not able to influence these requirements. We ourselves are influenced already now but we are not involved and therefore we have no power whatsoever. Upon accession to the European Union we will gain such influence which Latvia could only dream of. We will plan Europe’s future together with such superpowers as Germany, France, United Kingdom and other friendly European countries. Thus, we will possess power to secure Latvia’s interests in regulations and rules of the European Union. Until now our interests were practically disregarded in the legislative processes of the European Union. The European Union is the decision-making centre, which determines future of Europe. These decisions lay impact both on nations of the EU member-states and those outside it, for instance, Norway, Island and Switzerland. In Brussels the EU member-states will decide on standards for cheese, pets or clothing produced in Latvia if they are exported to the European Union market. They will not ask our opinion. Interests of neither Norway or Switzerland, or Island are not taken into account. This is one of the important arguments to show why we need to be a member-state, why we need to vote in the referendum and to ensure Latvia’s influence for we will really have to apply it in practice.
Second, we need to be aware of the opportunity to use the European Union in order to solve various problems with regard to third countries. There is a difference whether Latvia’s political and economic interests in negotiations with Russia, for instance, are represented by the European Union or by us alone. Practically already now being a candidate country Latvia feels “the strong shoulder” of the European Union, which precludes any economic attacks towards its member-states.
We will be involved and we will protect our interests on a European level when negotiating with any third parties and third countries in which bilateral dialogue with Latvia is impeded due to some reason.
We will improve our eastern border and the customs service. We will be able to combat the smuggling more efficiently and improve tax collection results which is one the current Government priorities, of course. Upon accession the customs information systems of Latvia will be connected in a common customs information network of the European Union. Thus, we will be able to control types and amounts of goods crossing our border. We will be granted 42 million lats for improvements on the eastern border and for immigration-related matters. By the way, this sum is more than a half of the amount, which we ourselves were ready to spend for these purposes.
Further I would like to address the issue of farmers and rural development.
First, we will provide farmers with the most needed values – predictable market, stable prices and stable income. The EU Common Agricultural Policy guarantees this.
Second, currently, only about 10000 farms of the total 150000 farms receive subsidies. Upon accession to the European Union practically all farms will be granted subsidies upon first hectare sown and harvested.
Farmers will be the very first group to benefit from the EU: already next year they will receive real monies, namely, direct payments. This money will be granted on the basis of applications, farmers will not be asked to design extensive projects and invest their own funds. However, people are not informed and do not have a clear idea how to practically gain access to this money. Therefore let us jointly – the Government together with the Saeima, as I hope – take care to ensure readiness of the public bodies to provide assistance by reducing the bureaucracy, helping to understand how to fill in the applications, where to submit them and how to receive the subsidies granted. At this point it is the responsibility of the Ministry of Agriculture to ensure the capacity of the Rural Consultative Service to assist farmers in receiving direct payments and subsidies of the European Union.
Let us also use assistance of the European Union in order to attract funds in the spheres in which no foreign investment is expected and for which in the nearest future the state itself will not be able to find substantial budgetary funding – this regards facilities, roads, etc.
When we go from Rīga to Ādaži along the Tallinn highway, we can well see the presence and absence of the European Union. The upgraded road Via Baltica from Gauja to Lilaste is a great example. 75% of the upgrading costs were covered by the European Union. The same applies to the road stage of Via Baltica from Iecava to Bauska, now the stage Rīga – Ādaži is under reconstruction. Upon accession we gain means to further upgrade and reconstruct motorways in an accelerated way and in greater amount due to the attracted resources of the EU Cohesion Fund.
We are going to attract resources from the EU Structural Funds in form of the European co-financing for implementation of the Latvian Development Plan. These funds will be used for improvements in telecommunications networks, support to small- and medium-sized enterprises, for upgrades of motorways and streets, training of the unemployed, construction of tourism facilities and for other purposes.
Those approximately 600 million lats granted to Latvia from the EU Cohesion Fund and EU Structural Funds will contribute to creation of new working places and provision of salaries to our people. This is a decisive aspect in order to cover the existing gaps in the social budget and to increase pensions. We should not forget that our advancement towards a well-organised European legal and administrative framework will eliminate such phenomena as tax evasion and the ill-famed “salaries is envelopes”.
We must be aware that participation in the European Union will promote faster competitiveness of the Latvian businessmen on the European level. We will have the opportunity to develop our manufacturing and gain a bigger sales market. The trademark “Made in European Union” will help us. Of course, upon accession to the European Union competition will increase. I think that Latvian entrepreneurs are more ready for participation in the European Union than they themselves admit it. Currently more than 60% of the Latvian exports go to the European Union. 72% of the exported textiles go to the European Union. This shows that our companies are competitive already today. Those which are not competitive yet or which consider themselves not being competitive should answer the question: which companies will become competitive more quickly – those which are in the European Union and which receive support to provide modernisation or those which stands outside and receive no support. For instance, although Norway has signed the Agreement on the European Economic Area, in 2004 it will pay more than 100 million euros for its small- and medium-sized enterprises to freely operate in the common market of the European Union. This is an example of negative experience of countries outside the European Union.
By joining the European Union we will secure prosperous and stable future of our children in an European environment, as well as wide opportunities for education. We should not tolerate the situation when our children are forced to go abroad to gather strawberries and do various simple works. We will become the country in which other will seek similar opportunities, perhaps. We ourselves will live and earn the same income as in the developed countries of the European Union. Of course, this will take time but it depends only on us.
In the European Union we will not be alone. Our voice will be heard; we will always have friends and allies. We have them already today. This is proved by the number of transition periods, which we have ensured in negotiations. This means that the European Union listens to us already now and supports reasonable and well-grounded needs.
Latvia has not much time left to fully prepare for participation in the European Union. Thus, we must use this period as efficiently as possible. The European Commission is the EU institution, which evaluates Latvia’s current readiness.
In November this year we expect a comprehensive report of the Commission on Latvia. This will be the last report before accession to the European Union. In view of its importance in June the European Commission is going to present an inter-report in order to identify several stumbling blocks in Latvia’s way towards full-fledged membership in the European Union. The society has been already informed about the concrete drawbacks to be expected in Commission’s report.
First, the Latvian customs and taxation administration system is still non-compatible with the EU systems. This is necessary for upon unification of the customs and respective taxation administration systems of Latvia and European Union production and tax settlements of any company and transit across the border will be clearly identified. Thus, it will really become extremely complicated to transit something by smuggling and to make tax frauds. My government having regard to the signals received last year has allotted the necessary funding and the work is under process. No doubt, much works remains to be done and the State Revenue Service and its new management are facing tough months of further work.
Now about the Structural Funds pointed out by the Commission. Here we must be absolutely convinced that the money of the Funds will be used for the intended purposes to serve interests of the people in Latvia. For this purpose, we will set up the institutions responsible for control of application of Structural Funds’ resources in Latvia. I am convinced that the Ministry of Finance will produce the respective proposals and the Government will approve them already by 1 July.
Last thing I would like to mention from the inter-report of the European Commission is navigation security. Very soon the Baltic Sea will become an inner sea of the European Union and it is easy to understand why the European Union is worried about Latvia’s ability to ensure sufficient navigation security. Special attention is also caused due to the recent ecological disasters. Luckily, none of the emergencies took place at our coast. This is why we have not faced the problem so far. Nevertheless, we have sea transport, we transit dangerous cargoes across the Baltic Sea, and having regard to these facts I would urge the deputies to approve the new Navigation Code which is included in the Saeima agenda for today, on 29 May.
The above-mentioned problems are the most serious ones but not the only spheres waiting for quick response from the Government and the Saeima. All tasks requiring consequent and quick moves are included in the report “On Achievements and Plans of the Government of the Republic of Latvia with Regard to Issues of the European Union”. This report is handed out to each of you and I am not going to repeat it. I would like to ask the deputies to also support other important draft laws for Latvia to be fully prepared for the future tasks, to strengthen the administrative capacity and the judicial system, and to ensure that the state truly serves interests of the people.
Soon the European Union will constitute 19 small countries and 6 so-called big countries. It is a myth that the small countries face greater hardships than others. As you see the number of so-called small countries is bigger In the Council of Ministers of the European Union, Germany will have only 29 votes out of 345. In fact, it is as little as 4 votes of Latvia, taking into account the number of residents.
Let’s remember that we will always have friends in Europe among both, large and small countries. It will depend on us how well we will be able to use these votes, find people who hold the same views, substantiate our proposals and initiatives and succeed in making decisions, which are necessary for us. I will point out once again, that by now we have been successful enough because we have gained large number of transition periods in accession negotiations.
Next three months and a half will be extremely important. I would like to appeal also to the members of the Parliament to enrol in preparation of the upcoming referendum. Mostly, to listen to people and also inform them what changes will the membership in the European Union bring to their private lives, individual household, how it will affect every individual member of our society. Due to the fact that members of the Parliament know their electors’ interests and problems the best this dialogue for you, members of the Parliament, with residents of Latvia could be of particular importance. Thus, I want to say that no one will have vacation this summer. Everyone will talk to electors.
We have been working for eight years and now it’s time to wind up and attain the result for the people of Latvia that we have deserved. Let me wish success for all of us!