Latvia’s largest business association, the Latvian Chamber of Commerce and Industry (LCCI), in connection with recent allegations against local government officials regarding the alleged misuse of European Union (EU) funds, points out that this trend not only indicates ambiguities in the regulations governing EU fund programs, their interpretation, and the guidelines for monitoring project implementation, but also jeopardizes local governments’ interest in developing business infrastructure and improving the business environment in the regions.

In recent months, the Latvian media has repeatedly reported on cases where local government officials have been charged with possible fraud involving EU funds for the development of business infrastructure. The LCCI emphasizes that although no person can be considered guilty until proven otherwise, this situation highlights shortcomings in the regulations governing EU fund programs, their interpretation, and supervision in project implementation guidelines. At the same time, it creates the risk that local governments may refrain from attracting EU investments for business development in the future.

The LCCI works closely with local governments on a daily basis, assessing their contribution to the development of industrial infrastructure and the creation of a business-friendly environment. It is already apparent that only a small number of local governments are working sufficiently to develop the business environment and attract companies to their territory. As the circumstances suggest a systemic problem, it is precisely the development of business areas that is the basis for receiving the status of a suspect in fraud in the interests of the local government , local government leaders will most likely be motivated to avoid any controversial situations, neglecting the improvement of business infrastructure. This situation hinders Latvia’s competitiveness and widens the gap between our country and our neighbors, Lithuania and Estonia, in terms of the pace of economic and business environment development.

Publicly available information suggests that in both cases where local government officials have been accused of misusing EU funds, the motive may have been a desire to improve the local area by developing industrial sites accessible to businesses. Although not all the circumstances of the case are known at present and it is not possible to draw any conclusions about the motives of those involved, it would be very wrong if Latvia were to impose prison sentences for the desire to develop business in the regions. This suggests that only those who do nothing make no mistakes. In this situation, the new motto of Latvian local governments could be: we do nothing so as not to make mistakes!