By Martin Banks - 26th November 2012
The government has not followed the correct procedures laid down by the EU
The European commission is being asked to investigate complaints made by Latvian municipalities about the alleged misuse of EU development funds.
Local authorities in Latvia have joined forces in accusing the country's government of failing to follow correct procedures in the allocation of the European regional development fund (ERDF).
It is alleged the ruling government has allocated ERDF monies "politically" by favouring certain municipalities at the expense of others.
This would be in direct contravention of EU rules which state there should be "no discrimination" in the way funding is distributed by member states.
The complainants' are led by first vice-mayor of Ventspils municipality in Latvia Jan Vitolins, who has lodged formal complaints with both the commission and the Latvian prime minister Valdis Dombrovskis.
Dombrovskis has refuted the allegations, insisting there has been no favouritism.
Latvia is believed to have received about €177m in ERDF funding for the period 2007-2013, including €25m for 2012.
The bulk of ERDF money in Latvia is used to finance major infrastructure projects, such as roads.
The complainants want the commission's regional policy directorate to investigate the issue "as soon as possible" so that they "do not miss out" on the €25m ERDF funding for the current year.
The letter to the commission, seen by this website, points out that ERDF monies are designed to be used to help "develop the competitiveness" of urban regions and the "development of municipalities".
Vitolins, whose municipality includes an important port in Latvia, said there was "clear evidence" the Latvian government had allocated EDRF funds to "those local authorities which shared similar political views" to its own.
He said, "In doing so, the government has not followed the correct procedures laid down by the EU."
According to EU regulations, the ERDF "depends on good governance and partnership among all the relevant territorial and socioeconomic partners and in particular regional and local authorities."
They go on to state that member states and the commission should ensure there is "no discrimination" during the various stages of implementation of programmes financed by the ERDF.
Vitolins said, "Some local authorities have received funding for their projects simply because they are the "political friends" of the responsible ministry. This has been at the expense of other local authorities, including my own and the fe more other complainants, whose projects have been ignored and failed to be funded."
He added, "We are merely asking the commission to investigate our complaint. This needs to be done as quickly as possible otherwise we are likely to miss out entirely on ERDF funding for 2012.
"The Latvian government has, on political grounds, wilfully ignored the perfectly legitimate funding requests from certain local authorities. We are saying that this amounts to political favouritism."
"The commission needs to thoroughly check that EU rules have been correctly applied in Latvia."
A letter from Dombrovskis, also seen by this website and which was recently sent to Vitolins, flatly denies any discrimination
The prime minister states that the procedures for allocating ERDF funding had been "legally correct" and "corresponds to the regulations".
The row comes amid recent demands from EU leaders such as David Cameron, the UK prime minister, for "better spending" of EU funds.
Such calls were echoed recently by Johannes Hahn, the EU commissioner for regional policy, who, speaking on 6 November, said he endorsed the "better spending agenda".
The official also called for "increased coordination and political accountability" at every level of EU spending.
No-one from Latvia's permanent representation to the EU was immediately available for comment.