Balts Fear Decline in EU Subsidies Following Brexit

Latvia is fearful that it will be receiving less funding from the European Union following Britain's decision to leave the supranational bloc last month.

On Sunday, Latvian information agency LETA reported that the Latvian Ministry of Finance is concerned that Brexit may result in a decline in EU economic subsidies to the Baltic country. 

The agency cited Ministry spokesman Alexis Yarotskis, who warned that "Latvia will face losses, given that after accession to the European Union, [Brussels] funding has contributed significantly to the development of our economy, while private investments are presently being held back by the negative geopolitical situation, combined with the slow growth of the global economy."

The official emphasized that the decline in EU funding will not happen in the near future, given that Britain's exit from the supranational bloc will take at least two years.

Last year, the United Kingdom contributed €16.5 billion to the EU, accounting for about 10 percent of the bloc's total budget.

On June 23, the United Kingdom held a referendum to determine whether or not the country should leave the EU, with 51.9% of voters, or 17.4 million people, coming out to support Brexit. Total voter turnout was 72.2%.

Ahead of the referendum, Luxembourg Foreign Minister Jean Asselborn warned that Brexit could trigger a "domino effect" for other member states in Eastern Europe, adding that he believed that Britain's Conservatives and Poland's conservative and Eurosceptic Law and Justice government had "the same agenda regarding their critical stance toward the EU." Unlike the UK, which transfers more money to Brussels than it gets back, Poland is the largest recipient of structural funds in the bloc.

Other analysts have suggested that the UK's exit might also have significant political and even security implications for Eastern Europe, particularly the Visegrad group of countries, including Poland, Hungary, the Czech Republic and Slovakia. The autonomy-minded UK's exit from the bloc could lead to a further tightening of political integration, they fear.

Speaking to World Politics Review ahead of the referendum, Visegrad Insight magazine editor Wojchiech Przybylski emphasized that "the Visegrad Group is afraid of Brexit because the UK promotes openness on a single market and helps to fund the EU subsidies that generate GDP growth in the region."

With Britons deciding that their political and economic future may be better served outside the EU, it's unclear who Eastern European governments can turn to now to make up for the lost subsidies.