More of the same secrecy in Latvia and Romania as EU recovery funds planning gets underway

The time for EU countries to prepare the plans that will outline how they intend to trigger the EUR 672.5 billion allocated under the Recovery and Resilience Facility (RRF) is almost up. March and April are the last months for Member States to finalise their recovery plans and comply with all the requirements laid down by the RRF Regulation, including the obligation to assign 37% of the funds to climate-friendly investments and reforms.  At the same time, this is the last opportunity for Civil Society Organisations (CSOs) from all over Europe to provide input and scrutinise the content of the plans through public consultations. With EUR 13.7 billion allocated to Romania and EUR 1.9 billion for Latvia from the RRF¹, the proper use of the funds will be crucial in order for these two countries to fully align with the updated 2030 EU climate and energy targets of 55% greenhouse gas reduction. However, recent developments in Romania and Latvia still show reasons for concern over both issues of public participation and reaching the climate and energy targets. 

Public participation still not a priority

Regarding public consultations, so far both the governments of Romania and Latvia have done little to open the preparation process of the recovery planning to the public. In Romania, civil society organisations submitted written comments and suggestions on the draft in December without receiving any feedback, and when later consultations were organised for February, the lack of structure for these compromised the possibility for NGOs to give satisfactory input on the content. A second draft is expected to be available on 15 April, but taking into account the tight deadline to be sent to the Commission, 30 April, there is little chance to have a new round of consultations.  Meanwhile in Latvia, environmental NGOs were given the possibility to participate in the consultations only in December, contrary to the social partners that had been involved since the very beginning of the process. After the draft of the plan was published at the end of January, a wider public including environmental organisations was invited to a formal public consultation until 9 March. These updates reinforce a recent survey by Bankwatch and CAN Europe, revealing the poor status of public partnership in many Member States, including most Central and Eastern European countries.

A worryingly low level of ambition on climate and energy targets

Similar concerns also apply to the content of the recovery plans. The money that Romania will receive from the RRF will provide financial contributions to three pillars of intervention, from green transition and climate change to urban development and economic competitiveness. Unfortunately, the first draft of the Romanian plan includes a problematic number of investments for environmentally harmful sectors: both the expansion of fossil gas network and the modernisation of harmful hydropower capacities are planned. Such investments would go against the Do No Significant Harm principle that the European Commission made mandatory for all the projects in the recovery plans, not to mention the negative consequences it would have on biodiversity, one of the priorities of the European Green Deal.  Furthermore, other types of investments such as renewable sources or energy efficiency (representing only 8.4% of the total funding) are barely considered by the Romanian government. In addition, CSOs in Romania are not aware of whether a Strategic Environmental Assessment (SEA) will be conducted on the projects of the plan, inevitably harming the overall green objective.  As for Latvia, Riga’s government released the first draft of the recovery plan at the end of January after having already submitted it to the Commission. This draft presented a worryingly low level of ambition on climate and energy targets, as well as potentially harmful investments towards biomethane and the transport sector. In terms of energy efficiency, the Latvian recovery plan shares Romania’s low targets. Even though the updated Latvian National Energy and Climate Plan (NECP) aims to renovate at least 3000 multi-apartment buildings by the end of the decade, the current investment plans for the EU budget and the recovery funds only foresee that respectively 370 buildings and 182 buildings – 18,4% of that target will be renovated through public funding. In addition to a limited funding for energy efficiency, NGOs are also worried about the lack of reformative elements in the plan. The concerns of civil society in Latvia led the Environmental Advisory Council (bringing together 20 environmental NGOs in the country) to send a letter to the European Commission to draw attention to the most problematic elements of the plan. Latvian CSOs expressed their concerns over the possibility that the state of reforms and investments proposed in the current recovery plan would represent a missed opportunity for the country, failing to turn the economic course of the country towards a green transition. On a more positive note, a Strategic Environmental Assessment has been conducted on the plan which is  currently under public consultation: up to now, Latvia is the only country out of most CEE countries to have proceeded with an SEA, as revealed by Bankwatch in its latest study. New updates on the recovery plans are expected in the next few weeks. Yet with a tight deadline of 30 April, this is the most crucial window of opportunity for Member States to align with the 2030 and 2050 climate and energy objectives. Failure to include long lasting and transformative investments in these coming months will have serious negative consequences for the next decade and beyond, jeopardising the unique opportunity to use the recovery to transition to a low carbon economy and successfully tackle the escalating climate crisis.