Latvia has spent two decades managing European Union funding by focusing primarily on formal accounting compliance rather than measuring true economic impact. That is the assessment of Ivars Godmanis, who issued the warning during an appearance on the TV24 program “The Price of Money.” According to Godmanis, the nation’s oversight model fails to track whether multi-year investments actually grow the national economy.
Tracking Numbers Without Measuring Economic Value
European Union funding over seven-year cycles routinely tracks quantitative metrics. These standard figures include the repaired kilometers of road or the number of newly registered businesses. However, Godmanis pointed out that these basic numbers do not reveal the actual economic contribution of the capital deployed.
“This is not an economic contribution. Here, I want to emphasize two things — economic will and also qualification. And help should come from someone who can do this,” Godmanis stated during the broadcast.
An Institutional Fixation on Preventing Financial Misuse
The core issue stems from an institutional fixation on preventing financial misuse rather than evaluating qualitative outcomes. Administrative bodies check accounting ledgers and inspect physical infrastructure to ensure money was not stolen and that roads are built adequately. Yet, they stop short of analyzing broader macroeconomic performance.
“Bureaucracy has not done this for 20 years — for 20 years such a principle has not been applied. When approving the winners of the competition, who win in the next announced project competition by the fund, they look to ensure that you do not steal the money — point one. And Europe also looks at this. CEFL checks if everything is in order with the accounting, and at the end, they come to see if the road you repaired is not bad,” Godmanis pointed out.
The Need for a Qualitative Leap in Oversight
The absence of deeper economic evaluation creates a structural gap in how public investments are governed. Transitioning to outcome-based assessments requires a significant upgrade in institutional capability. “This is a qualitative leap. There must be someone who knows how to do this and someone who knows how to verify it as well,” Godmanis said.
Public Data Gaps Hinder EU Funding Oversight
Finding clear public information regarding the granular utilization and performance of seven-year EU funding allocations remains difficult under the existing administrative framework. Without qualified personnel capable of measuring project outcomes against broader financial returns, the country risks repeating the same oversight limitations for future funding cycles.
