Ilustratīvs attēls no pixabay.com.
Corona hit us, creating a recession due to lockdown of several parts of our economies. The government of Latvia has done quite a lot to ameliorate this situation and the EU is underway with “The largest stimulus package ever” (their words, not mine) – 750 billion EUR (that is about 25 years of current annual Latvian GDP, so, yes, it is big) in assistance called NextGenerationEU of which 672.5 bill. EUR is the so-called RRF, Recovery and Resilience Fund. Idea: To repair our economies following the losses due to corona. Here is a link to the Latvian Ministry of Finance, providing information about RRF in Latvia.
Latvia stands to obtain, at first, 1.65 bill. EUR, some 5.5% of GDP – but does the economy really need this much money to recover?
I will try to argue that perhaps it does not (which is NOT the same as saying no, thank you to the money….) and that it may instead lead to overheating – and, let’s face it with so much money, also waste and inefficiency here and there.
