In the allocation of funding according to the regions and cities Latvia does not take into account the common aim of the EU policy to support socially and economically less developed territories. Larger EU structural funds financing was provided for cities and city regions of the republic with bigger number of inhabitants. In the rural regions the biggest funding was channeled to the regions having higher territory development index. Such funding allocation creates risk to increase the differences of the social and economic development level of various territories and enable enlargement of sparsely populated territories instead of the EU policy aims implementation, thus not allowing the regions and cities of Latvia to develop equally and compete, impeding the development of the country. Similarly, the greatest part of the projects is related to the formation of an attractive living environment and not the economic activity stimulation of the corresponding region or city territory. According to the opinion of the author Latvia makes use of the allocated EU structural funds financing not effectively enough to solve the existing social and economic problems in the country.