Sweden to deploy troops in Latvia, PM’s New Unity party faces scandals
Government was presented a positive economic report
Prime Minister Evika Siliņa visited Sweden on April 25-26 and was told at a press conference with Swedish Prime Minister Ulf Kristersson that Sweden, now a full member of NATO, would send an armored battalion to serve in Latvia on a rotating basis starting in 2025. The 400 to 500 soldiers will be part of the Canadian led NATO forward enhanced battle group and will arrive in Latvia with their full equipment of tanks and armored personnel carriers. Kristersson said there was great interest in the Swedish armed forces for serving in Latvia and many volunteers had already expressed interest in joining the battalion.
Swedish soldiers and an armored vehicle, coming to Latvia in 2025. Photo: LSM.lv
The visit to Sweden was a respite for Siliņa, whose New Unity (JV) is facing charges of both paying “envelope wages” by a whistleblower former high party official as well as allegations of attempted election tampering in the 2014 elections by an IT company running vote counting software at the time.
Renars Kadžulis, CEO of SOAAR, claimed on Latvian Television April 24 that JV’s party secretary general at the time, Artis Kampars had asked SOAAR, to rig the election results to ensure then JV chair Solvita Aboltiņa's election to the parliament. Kadžulis admitted that he has no evidence to prove that such a conversation took place but said that he alerted law enforcement authorities to it.
Despite the alleged events taking 10 years ago, President Edgars Rinkēvičs during a meeting with Prosecutor General Juris Stukāns on April 25 ordered an investigation into the allegations of attempts to rig the results of the 2014 Saeima elections.
In other actions by the Saeima on April 24, a law was passed to promote consumer awareness stipulating that the country of production of food products must be indicated at food retail outlets. The country of production of the product can be indicated in writing or with an image of the relevant country's flag. If the food product is produced in Russia or Belarus, the information will be indicated only in writing.
Russian need not be taught as a second language
The Latvian government also ruled that Russian can no longer be required as a second language in schools. Starting from the 2026/2027 academic year, Russian as a second foreign language will be gradually abandoned in basic education, Latvian students learn English as their first foreign language from the beginning of school, but after primary school, they start learning a second foreign language. Theoretically, children can learn French, German and other languages as a second foreign language, but in practice the Russian language is most often taught because there is a lack of teachers of other languages in schools.
At the April 30 government meeting, Siliņa announced that a package of military aid to Ukraine consisting of an unspecified number and type of anti-aircraft guns, reconnaissance drones and other military equipment. At a press conference after the meeting, which ran unusually late, Minister of Transport Kaspars Briškens and Finance Minister Arvils Ašeradens also announced more details on what could be called a kind of vitamin injection to the national airline air Baltic. The government will purchase some EUR 136 million of a forecast EUR 300 million debt issue the airline will need – in effect a roll-over of EUR 200 million in bonds soon falling due plus EUR 100 million in additional financing. The government contribution, subject to approval by the Saeima, will involve converting some EUR 36 million loaned to the airline by the State Treasury to interest bearing bonds and EUR 100 million of new (rolled-over) bond debt. The rest is expected to be raised from private investors.
Economic report: some key points
At the same April 30 government meeting, ministers were presented with a report on the state of the Latvian economy looking back at the past few years and forecasting economic performance in the future. Some key points from a quick read of the 63-page document:
* The Covid-19 pandemic significantly affected economic development on a global scale and also in Latvia. GDP in Latvia decreased by 3.5% in 2020. Large-scale government and EU fund support measures, as well as the improvement of the epidemiological situation in 2021, contributed to the recovery of Latvia's economy, and GDP grew by 6.7%.
* Growth in Latvia slowed down to 3% in 2022, which was significantly affected by disruptions in supply chains caused by Russia's invasion of Ukraine, the rise in inflation caused by the cost of energy resources and food, as well as the decrease in global demand. Inflation was most significantly affected by the rise in energy and food prices in the world.
*In 2023, economic development continued to be affected by the geopolitical situation and uncertainty, high prices a Lnd rising bank interest rates. GDP decreased by 0.3% compared to 2022. In the second half of the year, the fall in GDP was less than in the first half of the year. In general, private consumption, export and import decreased in 2023, but state consumption and investments increased. It is positive that consumer prices stabilized in 2023, decreasing every month compared to the corresponding month of the previous year - from 21.5% at the beginning of 2023 to 0.6% in December. Taking into account the base effect of inflation dynamics, in 2023 the average annual inflation remained high - 8.9%.
Looking ahead the report said:
*International institutions predict that the economy will grow in Latvia's largest export markets in 2024, which will positively affect the country's export opportunities. As real wages resume growth, private consumption is expected to resume growth as well. The implementation of EU fund programs will have a positive impact on investment dynamics. The Ministry of Economy predicts that in 2024 GDP growth could reach 1.8%, but in 2024 the average annual inflation is expected to be within 1.7%
With Latvia on May 1 celebrating 20 years since its accession to the EU, the report also notes:
Since 2000, Latvia's GDP per capita has increased almost 5 times, ranking Latvia among the world's countries with high incomes.
This point would surely be debated by critics of government policies who say that Latvia’s key economic indicators still rank low within the EU, and that economic and regional inequalities remain a serious problem