AGP Executive Report

State Forests Audit Shock: Latvia’s State Audit Office says weak oversight of Latvijas Valsts meži (LVM) and the Agriculture Ministry cost the state tens of millions—at least €130.3m not paid as dividends and €49.4m in lost revenue tied to “support for timber processors.” Baltic Drone Pressure: NATO and EU leaders backed Estonia, Latvia and Lithuania after Russia’s drone accusations; NATO chief Mark Rutte called the claims “ridiculous,” while von der Leyen warned Russia’s threats are “completely unacceptable.” Latvia’s Political Reset: A new coalition shape is emerging after Evika Siliņa’s resignation, with talks pointing to a short-term majority deal built around a clear task list. EU Trade: The EU approved a US tariff cap deal (15% on most exports) after intense internal fights. Deep Tech Momentum: A Baltic Deep Tech Report says deep tech is now the region’s defining startup force, with defence tech the fastest-growing slice.

Baltic deep tech surge: A new report says Baltic deep tech has grown faster than the US, EU and Nordics, with enterprise value jumping from €2.6bn (2021) to €7.5bn (2025) and deep tech becoming the dominant funding target. EU–US trade: After a bruising internal fight, the EU approved a tariff deal with the US, capping most EU exports at 15% ahead of Trump’s July 4 deadline. Latvia politics: The likely shape of Latvia’s next government is coming into focus, with New Unity signaling it could join a coalition built around the United List, National Alliance and Greens/Farmers—if a clear task list is agreed. Security pressure: Latvia’s President urged calm as Russia ramps up intimidation claims over drone incidents, while NATO tensions keep drones and air alerts in the headlines across the Baltics. Energy fallout: Energean cut output and dividends after conflict-related shutdowns in Israel. AI in transport: Airlines at Routes Europe said AI can speed decisions, but route strategy still leans on human judgment.

Latvia–Russia Tensions: Latvia’s leaders hit back hard after Russia claimed Ukraine could launch drones from Latvian territory, with President Edgars Rinkēvičs calling it “pure fiction” and officials stressing Latvia has never granted such permission. Airspace Disruption: Alerts were issued across parts of Latvia after a suspected drone incursion, disrupting train services and local activities before most warnings were lifted. Defense Procurement: Origin Robotics signed a multi-year framework with Latvia for BLAZE counter-UAS deliveries, with the first SAFE-financed contract approved in April. Business & Investment: Baltic private equity and VC funds raised €750m last year and have €1.4bn ready for new deals, while Capalo AI agreed to optimize and trade Latvia’s battery storage portfolio for Aretis Group. Tech Deal: French AI firm Mistral AI will acquire Austrian Emmi AI, co-founded by Latvian entrepreneur Miks Miksons. Tourism Policy: Riga’s tourist tax is set to rise to two euros per night.

Mistral AI Deal: French AI giant Mistral AI has agreed to acquire Austrian Emmi AI, co-founded by Latvian entrepreneur Miks Miksons, aiming to boost industrial engineering capabilities with faster AI-driven simulation and digital twins. Security Flash: Air threats and drone alerts hit Latvia and Estonia, with Latvia’s government and leaders rejecting Russian claims that Ukraine uses Latvian territory for strikes. Government Pressure: Bank of Latvia chief Mārtiņš Kazāks urged Latvia to form a new government quickly while tackling key economic priorities before elections. Baltic Capital: KPMG says Baltic private equity and VC raised €750m last year and has €1.4bn ready for new investments. Riga Tourism Move: Riga’s tourist tax is set to rise to two euros, with extra funds earmarked for marketing and business tourism. Energy Storage Growth: Capalo AI signed agreements to optimize and trade Aretis Group’s hybrid and standalone battery storage portfolio across Latvia. EU Sanctions Tighten: The EU’s 20th sanctions package closes a rubber-supply loophole, after findings of EU-to-Russia exports.

Latvia’s Political Shock: Evika Siliņa has resigned as prime minister after coalition fractures tied to the “stray” drone incident, leaving President Edgars Rinkēvič to broker a new government before October elections. Security Pressure: The drone episode has intensified public scrutiny of Latvia’s air defence and how Ukraine-Russia spillovers are handled. Tourism Watch: Foreign tourism in Latvia fell in Q1 2026—foreign guest nights down 7.2% and total guest nights down 3%—as regional geopolitics and competition from nearby capitals bite. Energy Disruption: Rēzekne’s East-West Transit oil terminal will stop operations after drone damage and safety concerns for staff. Business Moves: Virši-A got Competition Council approval to take over 17 Astarte-branded stations, expanding its network to 101. Regional Cooperation: Norway became a full member of the EU Baltic Sea Strategy, boosting cross-border security and resilience coordination.

Latvia’s Government Shock: Prime Minister Evika Siliņa has resigned as the coalition collapses after a drone-related security row, leaving President Edgars Rinkēvičs to start talks with parties on a new head of government. Energy Security Hit: Latvia’s Rēzekne oil depot will shut after drone strikes, with the operator citing it can’t guarantee staff safety. Fuel Retail Expansion: AS VIRŠI-A won Competition Council approval to take over 17 Astarte-branded service stations on long-term lease, lifting its network from 84 to 101. Infrastructure & Roads: Work starts on the Liepāja Highway (A9) reconstruction, with new speed limits and junction changes to improve safety. Cross-Border Crime Crackdown: Europol backed a €240m fake medicines network takedown across Eastern Europe. Business Watch: LAU Infra Grupa reported EUR 17.3m revenue in Q1, while Civinity pushes AI and robotics ambitions for broader European growth.

Ukraine–Russia Escalation: Ukraine says it hit Moscow-region targets over the weekend with long-range drones, including an Angstrom microelectronics plant and a key oil-pipeline pumping station, while Russia reports casualties and blames “drone debris.” Latvia Politics: Latvia’s coalition has collapsed after the prime minister’s resignation tied to stray Ukrainian drone incidents; President Edgars Rinkēvičs has now tasked opposition lawmaker Andris Kulbergs with forming an interim government. Defense Readiness: Estonia and Latvia warn Europe is moving too slowly toward combat readiness as NATO pushes faster air and missile defense. Health & Crime: Eurojust and Europol-backed action dismantled an international fake-medicines network operating across multiple countries, with raids at 113 locations and sites shut down. Energy Pressure: A UK fuel-duty fight is resurfacing as officials signal a possible retreat from an autumn hike, reflecting how oil shocks keep squeezing small businesses. Baltics Culture: Skrunda marks 30 years as a city with a signature boat parade turning craft into celebration.

Government Shake-Up: Latvia’s coalition has collapsed after the prime minister resigned over stray Ukrainian drone incidents, and President Edgars Rinkēvičs has now tasked opposition lawmaker Andris Kulbergs with forming an interim government—giving him 10 days, with a new cabinet still needing Saeima approval. Defense Readiness Debate: The wider Baltic alarm is growing as Estonia and Latvia warn Europe is moving too slowly toward combat readiness, while Finland’s drone scare briefly shut Helsinki-Vantaa and scrambled jets—fueling fears that “stray” incidents can erode public support. Security Economics: At the Lennart Meri Conference, Estonia’s defense minister warned that rearmament is colliding with price spikes, as Europe’s military spending surge meets limited industrial capacity. Baltic Business & Culture: Riga hosted Adwards 2026, spotlighting 166 shortlisted works across Latvia, Lithuania and Estonia, while Skrunda marked 30 years as a city with a boat parade themed around a birthday party. EU Migration Lens: A study says migrants in several EU countries—including Latvia—are often more university-educated than locals, adding pressure to migration and labor policy.

Government Shake-Up: Latvia’s coalition has collapsed after Prime Minister Evika Siliņa resigned over the handling of stray Ukrainian drones, and President Edgars Rinkēvičs has now tasked opposition lawmaker Andris Kulbergs with forming an interim government—giving him 10 days and aiming to avoid a caretaker setup ahead of the Oct 3 parliamentary election. Security Pressure: The political fallout is tied to disputes over air-defence readiness after drones entered Latvian airspace, with the defence minister’s departure triggering the loss of parliamentary support. Regional Context: The wider Baltic security mood remains tense, with NATO and partners pushing for faster capability delivery as defence spending rises but prices for military gear jump sharply. Culture & Media: Eurovision 2026 is in full swing, with Latvia not qualifying for the final, while viewers across Europe tune in to the Grand Final coverage and running orders.

Government Shake-Up: Latvia’s coalition has collapsed after the prime minister’s resignation over stray Ukraine drone incidents, and President Edgars Rinkēvičs has now tasked opposition lawmaker Andris Kulbergs with forming an interim government, giving him 10 days and aiming to avoid a caretaker setup before the Oct 3 parliamentary vote. Defense Costs Under Pressure: At the Lennart Meri Conference in Tallinn, Estonia’s defense minister warned that Europe’s rearmament push is colliding with soaring weapon prices—up 50% in two years—while NATO leaders keep pressing for faster spending and readiness. Regional Security Signals: Finland temporarily shut Helsinki-Vantaa and scrambled jets after a suspected drone incursion, underscoring how quickly air-defense disruptions can spill into daily life. Baltic Business Pulse: Latvia’s fintech scene is getting more attention, with the Baltics highlighted for real-world innovation rather than hype. Scam Alert: Riga police report a man lost €21,654.52 to a “police officer” gold-coin scam.

Eurovision shock for Latvia: Latvia failed to qualify for the Eurovision 2026 final after Thursday’s second semi-final, with Azerbaijan, Luxembourg, Armenia, Switzerland and Latvia also eliminated—while Denmark, Australia (Delta Goodrem), and Bulgaria (DARA) booked spots for Saturday’s grand final in Vienna. Baltic security pressure: Finland stood down a drone alert after a Helsinki-region scare, but the wider message across the Nordics and Baltics is clear: drone incidents can quickly turn into political and public-trust problems, and Russia will try to exploit any confusion. Defense spending push: NATO leaders are again tying the alliance’s future to higher European defense budgets, with the U.S. signaling it will judge progress at the upcoming summit. Energy exposure watch: New analysis highlights how countries like Latvia sit in a “better headroom, lower energy-import risk” zone—an important buffer as Europe faces fresh energy price swings. Latvian business note: Paybis says it has secured MiCA/PSD2 approvals in Latvia, adding another regulated fintech push to the local market.

Latvia’s Security Shockwaves: A week of drone-linked political turmoil is still echoing, with the latest focus on NATO’s push into new ground and air tactics—Latvia hosted “Crystal Arrow,” where unmanned ground vehicles tested how quickly the alliance can adapt to the next wave of warfare. EU Justice Push: The Council of Europe has moved from signatures to action on a Nuremberg-style special tribunal for Russia’s crime of aggression, with Latvia among the states backing the framework. Public Procurement Reset: Latvia’s Saeima adopted reforms aimed at cutting procurement red tape and shortening procedures, with higher thresholds and more flexibility for contracting authorities. Scam Alert: Police report another gold-coin fraud in Riga—€21,654.52 lost after a caller posed as a bank and police officer. Business & Culture: Beluga Noble Vodka launches a Monaco summer edition, while Latvia’s Eurovision entry Atvara failed to reach the final.

Latvia’s political shock: Prime Minister Evika Siliņa resigned after a drone incident triggered a government break-up, with her coalition partners refusing to back the dismissal of Defence Minister Andris Sprūds—setting up talks on an interim government ahead of October elections. Security & drones: The wider fallout is still unfolding after drones struck an oil facility in Rezekne, and prosecutors moved in against Agriculture Minister Armands Krauze in the timber-support case. Public procurement overhaul: Latvia’s Saeima adopted amendments to speed up procurement, cut procedures by 25%, raise EU-aligned thresholds, and shift focus from paperwork compliance to procurement goals. Baltic deterrence vs. global missions: Latvia is open to contributing to a possible EU Strait of Hormuz mission, but insists it must not dilute NATO’s eastern flank priorities. Macro watch: ECB’s Martins Kazaks flagged a potential rate hike if oil-driven inflation expectations keep worsening. Business & finance: Viva.com expanded its “tech bank” payments-and-financing platform to Latvia and the Baltics, while rail travel across Europe hit 8.7bn trips as demand surged.

Latvia’s Government Shock: Prime Minister Evika Siliņa resigned after a drone-incursion row that spiralled into a coalition collapse, with her Progressives partners refusing to back the dismissal of Defence Minister Andris Sprūds—leaving her without a parliamentary majority and pushing Latvia toward caretaker rule until a new government is formed. Law & Order / Accountability: In parallel, prosecutors moved in the “timber industry support” case, with law enforcement seizing Agriculture Minister Armands Krauze’s phone and computer as part of procedural actions. Digital Finance & Payments: Viva.com, Europe’s tech bank for businesses, expanded its integrated payments, banking and financing platform to Estonia, Latvia, Lithuania, Slovakia and Slovenia. Tech & Innovation: Riga hosts Deep Tech Atelier 2026 (May 14–15), while LMT IoT and Infineon launched a mentorship push for edge-AI cellular IoT pilots. Regional Context: Across the region, NATO’s eastern flank focus on drones and air defence remains in the spotlight as Russia continues large-scale strikes on Ukraine.

Crypto Regulation: Latvia’s central bank has granted Paybis two licences—MiCA crypto-asset services and a PSD2 payment institution licence—unlocking regulated crypto and payments across the EU/EEA for its 7 million users. Aviation & Travel: airBaltic has launched direct Athens–Tallinn flights for the summer season, adding to its Baltic network. Energy Infrastructure: Estonia’s fourth electricity link to Latvia has been pushed back beyond 2038, with investment decisions now expected later and tied to broader foreign-connection timelines. Air Defence Focus: NATO’s eastern flank states, including Latvia, are calling for stronger air and missile defence after repeated Russian airspace violations. Business Watch: airBaltic reported a Q1 2026 loss of €70.1m, even as revenue rose and passenger numbers increased. Sports & Compliance: two low-ranked tennis players, including Latvia’s Karlis Ozolins, were provisionally suspended after clostebol positives. Public Sector Innovation: Latvia’s participatory budgeting platform is among EPSA 2025–26 winners.

Crypto Regulation Leap: Latvia’s central bank has issued Paybis Europe two licences—MiCA crypto-asset services and PSD2 payment institution—unlocking regulated crypto and payments across the EU/EEA for its 7 million users. Defence & Sanctions: Zelensky signed two new sanctions decrees targeting dozens of Russian individuals and firms tied to missile, rocket-fuel and military supply chains, while Slovakia says it is supplying Ukraine with ammunition on a commercial basis and plans to keep ramping up. NATO Air-Defence Pressure: Eastern flank leaders say repeated Russian airspace breaches show NATO must strengthen missile and drone defences and expand defence-industry cooperation. Latvia Business Watch: Luminor Bank approved €1.25m for engineering contractor DEVRE, and Eleving Group reported Q1 2026 revenue up 32.8% to €77.8m. EU Agriculture: Eurostat shows EU pesticide sales rose 8% in 2024 after two years of decline, with Latvia up sharply (+68%). Sports Integrity: Two players, including Latvian Karlis Ozolins, were provisionally suspended after clostebol positives.