AGP Executive Report

Government Formation & Economy: Latvia’s President Edgars Rinkēvičs said he will nominate PM Andris Kulbergs to form the next government after the United List’s election win, with coalition talks expected to show progress by early November. AirBaltic Restructuring: The national carrier plans workforce cuts of about 500–700 jobs across Riga, Vilnius and Tallinn as it implements a new business plan, including a smaller Airbus A220-300 fleet and more year-round ACMI partnerships, while saying the flight schedule won’t change. Public Finance Austerity: Latvia’s Finance Ministry proposes limiting new state contracts and postponing non-critical spending until end-2026, aiming to curb late-year budget commitments while keeping essential services running. Banking & Cybersecurity: South Korea’s regulators identified 33 malicious IP addresses tied to suspected AI-assisted attacks on financial firms, including one linked to Latvia, and ordered internal security reviews. Sustainability & Waste: Latvia, Estonia and Finland are testing recycling models under the €2.64m SustainaCycle project, including mobile waste collection points in Latvia’s Vidzeme region. Business & Trade Signals: Eurozone retail sales edged up 0.1% month-on-month, but Latvia saw a 1.4% decline. Corporate Finance: Luminor granted EUR 1.8m financing to forestry/logging firm LIVO Mežs to expand capacity and exports.

airBaltic Restructuring: Latvia’s flag carrier airBaltic says it is preparing “workforce adjustments” that could cut about 500–700 jobs across Riga, Vilnius and Tallinn as it reshapes its business model and fleet, with no final decisions yet on individual employees. Latvia Politics & Public Finance: After a decisive election win, Prime Minister Andris Kulbergs says he will “put order” in public finances, reviewing every expense and pushing for a coalition that matches United List priorities. Latvia Fintech & Capital Mobilisation: UN:BLOCK will bring 600+ fintech leaders to Riga to discuss MiCA, cross-border payments and how to unlock Latvia’s roughly €9bn in savings and pension assets for investment. EU Budget Pressure: Seventeen EU states including Latvia urge the Irish EU presidency to protect cohesion and farm funding in the 2028–2034 budget, warning cuts would hit businesses and communities. Trade & Business Links: LIAA signed a three-year cooperation deal with Canada’s Sherbrooke quantum ecosystem to support commercialisation, exports and joint projects. Latvia Visa Policy: Latvia’s Interior Ministry proposes temporarily suspending visa issuance to Uzbek citizens after alleged crimes soon after arrival, as Riga and Tashkent also seek to expand business ties.

Latvia Election & Fiscal Reset: Prime Minister Andris Kulbergs’ United List won a record mandate in the Saeima vote, setting up coalition talks while he promises to “put order” in public finances and review every expense. airBaltic Restructuring: The state-linked carrier plans workforce “adjustments” affecting about 500–700 jobs across Riga, Vilnius and Tallinn as it continues Chapter 11 bankruptcy restructuring. Fintech & Capital Mobilisation: UN:BLOCK Fintech is set to bring 600+ leaders to Riga to discuss MiCA licensing, cross-border payments and how to unlock Latvia’s roughly €9bn in dormant savings and pension assets. EU Budget Fight: Seventeen EU states, including Latvia, urged the Irish presidency to protect cohesion and farm funding in the 2028–2034 budget. Corporate Restructuring: Amber Latvijas balzams is under court protection after a tax debt, cutting costs and shifting some production to Lithuania. Energy & Industry Signals: Latvia’s business scene also intersects with regional security and investment priorities as EU and NATO planning intensifies.

Latvia Election Watch: Andris Kulbergs’ United List has won a record share in Latvia’s parliamentary election, projected at about 35.4–35.6% and 42 of 100 seats, setting him up to keep a pro-European, pro-Ukraine line—though coalition talks are still needed after at least one current partner looks set to miss the 5% threshold. Security & Cost of Living: The campaign was dominated by Russia-linked fears, hybrid threats, and living costs, with populists also gaining support. Ukraine War Spillover: Latvia’s political direction is tied to the wider war context, including reports that Ukraine expects intensified Russian strikes on energy and civilian-linked infrastructure this winter. EU Budget Fight: Separately, 17 EU leaders—including Latvia—have urged Ireland’s EU presidency to protect farm and cohesion funding in the next long-term budget, warning cuts would weaken the bloc. Fintech in Riga: UN:BLOCK Fintech is set for 15 October in Riga, targeting 600 attendees and offering direct regulatory sessions on MiCA and other EU rules.

Latvia Election: Andris Kulbergs’ pro-European United List won Latvia’s parliamentary election, taking 42 of 100 seats (record since independence) and setting up coalition talks to keep a pro-Ukraine course as populists gained ground. Security & Economy: The campaign stayed dominated by Russia fears, hybrid threats and cost-of-living pressure, with Latvia’s next government expected to balance defence spending with economic growth promises. EU Budget Fight: Seventeen EU leaders, including Latvia, urged Ireland’s EU presidency to protect farm and regional funding, warning cuts to the CAP and Cohesion Policy would weaken the bloc. Fintech in Riga: UN:BLOCK Fintech will bring 600+ leaders to Riga on 15 October, with a strong regulatory focus including MiCA, stablecoins, DORA and a sandbox session with Latvijas Banka. Markets: EU wheat prices edged higher on export hopes and euro moves, while traders watched Black Sea disruptions and upcoming tender results.

Latvia Election Watch: Exit polls show Prime Minister Andris Kulbergs’ pro-Ukraine United List leading Latvia’s Saeima vote with 35.6% (with Latvia First at 11.3%), setting up a strong but coalition-dependent path to government as voters weigh Russia security fears and the cost-of-living squeeze. Coalition Math: Even a clear win may not keep the current lineup intact, with some partners projected below the 5% threshold, meaning negotiations will likely reshape the ruling bloc. Ukraine War Spillover: The campaign’s tone is reinforced by reporting that Ukraine expects intensified Russian strikes on oil infrastructure this winter, while insisting it will avoid civilian targets—an outlook that keeps defence and energy policy front and centre for Latvia. EU Budget Pressure: Separately, 17 EU leaders including Latvia urged the Irish EU presidency to protect Cohesion Policy and the CAP from cuts in the 2028–2034 budget talks, arguing farm and regional funding are key for competitiveness and food security. Investment Pipeline: Latvia’s investment agency LIAA said it reached nearly 90% of its 2026 investment-attraction target in nine months, with projects spanning energy, defence/dual-use, fintech and logistics.

Latvia Election Watch: Polls opened in Latvia for the 15th Saeima vote, with national security, Russia’s war in Ukraine, NATO defence and the cost of living driving the campaign; Prime Minister Andris Kulbergs’ United List is leading in surveys, but fragmentation is expected to complicate coalition talks. Voter Turnout Snapshot: By midday, turnout was just over 25% nationwide, with early voting already above 11%, and results expected early Sunday. EU Budget Fight: Seventeen EU countries including Latvia urged the EU to protect cohesion and the Common Agricultural Policy in the 2028–2034 budget, pushing back against proposed large cuts. Investment Promotion: Latvia’s investment agency LIAA said it reached nearly 90% of its 2026 investment attraction target in nine months (€886.8m), spanning energy, defence/dual-use, fintech and logistics. Fintech & Finance: Latvia’s central bank granted more crypto-related licences, while non-cash payments hit an all-time high. Housing & Markets: House prices kept rising across Europe, with Latvia among the countries posting double-digit annual growth. Regional Energy/Industry: NorSAF and Nova Pangaea Technologies plan a wood-waste-to-ethanol supply chain for sustainable aviation fuel in the Baltic region.

Latvian Central Banking & Crypto: Latvijas Banka granted MiCA crypto-asset and payment licences to three companies, including Atrya Technologies SIA (crypto custody/administration and crypto-to-crypto exchange), Noah LV SIA (crypto custody plus payment services), and Neverless SIA (payment institution licence), bringing MiCA authorisations to 12 firms. Rail Baltica Cost Control: Latvia’s government set a ceiling of €20m per kilometre for Rail Baltica’s main-line costs, after earlier estimates reportedly ran €28m–€32m, with the PM blaming “fluid reality” from delayed cost caps. SAF Supply Chain Push: NorSAF and Nova Pangaea Technologies plan an ethanol plant in Latvia using wood waste to feed sustainable aviation fuel needs as EU SAF targets ramp up. AI Ecosystem Growth: A new report says the number of AI companies in the Baltics jumped 53% year-on-year to 282, with Latvia at 95 firms and strengths in software/R&D and “AI-first” startups. Eurozone Inflation Watch: Eurostat’s flash estimate puts eurozone inflation at 3.8% in September, driven mainly by energy, while Latvia’s rate is cited at 2.9%. Public Media Language Rule: Latvia’s Saeima approved limits on Russian-language output by public-service media, allowing Russian only in emergencies or for targeted disinformation debunking.

Ukraine-EU Funding Push: President Volodymyr Zelensky told EU ambassadors in Kyiv that Ukraine needs more money and faster delivery of air defense and anti-ballistic systems, alongside EU accession progress and tougher Russia sanctions. Latvia’s Crypto Push: Latvijas Banka granted Noah LV SIA a double MiCA licence covering crypto-asset services and payment services, bringing Latvia’s MiCA total to 12 firms. Baltic Security & Elections: Latvia’s election campaign is dominated by Russia-linked hybrid threats and airspace incursions; Prime Minister Andris Kulbergs says Russia lacks capacity for a direct attack but will keep testing NATO. Public Media Language Rules: Latvia’s Saeima approved tighter limits on Russian-language content on public broadcasters, allowing it only in emergencies or to counter disinformation, with changes effective from 1 January 2027. Defence Procurement: Latvia signed a three-way contract to buy Czech Morana 155mm wheeled howitzers and rocket artillery, with EU SAFE loans and a gradual production shift to Latvia. Markets Mood: European stocks fell as bond yields hit multi-year highs, lifting borrowing costs and adding inflation/fiscal worries. EU Enforcement: The European Commission opened/advanced infringement steps, including consumer credit rule delays, with Latvia among the states in the wider package.

Latvian Defence & Tech: Anduril and Latvian startup ORIGIN are integrating ORIGIN’s BLAZE interceptor with Anduril’s Lattice AI command-and-control to build a layered counter-drone system for NATO’s eastern flank. Air Defence Timetable: Latvia’s IRIS-T medium-range systems could reach operational combat duty in the first half of 2027, with initial deliveries expected later this year and training plus NATO integration determining the pace. Crypto Regulation: Latvia’s central bank has issued Noah LV both a crypto-asset services licence and a payment institution licence, enabling custody, exchanges and crypto transfers. Election Watch: Prime Minister Andris Kulbergs’ United List is leading polls ahead of Saturday’s vote, with voters focused on Russia-linked security risks and continued support for Ukraine. Energy & Security: Latvia is moving to buy Anduril’s Barracuda cruise missiles, while IRIS-T and drone-defence upgrades underline a broader push to harden airspace. Trade & Logistics: Pall‑Ex Iberia launched a new land service linking Iberia with Emons in Cologne, expanding palletized distribution across 14 European countries including Latvia. Regional Grain Pressure: Estonia approved sanctions banning transit of Russian and Belarusian grain through its territory, aiming to cut off routes that could fund Russia’s war economy. Business & Research: Riga Nordic University launched an international scientific journal, Interdisciplinarity in Applied Sciences, targeting applied engineering, AI, management and sustainability research.

Latvia Election Watch: Reuters reports Prime Minister Andris Kulbergs’ United List is set to win the most seats on Saturday, but will likely need a coalition as security and cost-of-living dominate and many voters remain undecided. Defence & Industry: Latvia signed a trilateral deal to buy 155mm “Morana” artillery systems (with missile artillery) with Czech and Slovak partners, including plans to localize some production. Security Risks: President Edgars Rinkēvičs says Latvia has no evidence of a direct Russian invasion, while pointing to sabotage and cyber threats already hitting the region. Cross-border Crime: EPPO indicted two Polish nationals over a €100m+ electronics VAT fraud ring spanning multiple EU states, including Latvia. Payments & Consumers: Bank of Latvia data shows cashless payments hit a record 81% of transactions in August, with smartphone payments rising. Business Support: LIAA says its autumn business incubation programme drew a record 313 applications. EU Health Push: EU Screening Week urges “Know Your Numbers” checks for blood pressure, cholesterol and blood sugar to cut cardiovascular deaths.

Latvia Election Watch: President Edgars Rinkēvičs says Latvia currently has no indications of a direct Russian invasion of NATO members, while warning that sabotage and cyberattacks remain a real risk as authorities urge the public to report suspicious activity ahead of the Oct. 3 vote. Defense & Security: Estonia attributes the Milrem Robotics arson in Tallinn to Russian special services, and the ISS says it has prevented a significant number of Russian-planned hybrid attacks in recent years. Business Finance: Signet Bank provided EasyCars with EUR 1.3m to expand its short-term rental fleet at Riga and Tallinn airports. Payments & Consumer Trends: Non-cash payments hit a new high in Latvia—81% of transactions in August—while smartphone payments also reached a record share. SME Support: LIAA’s Business Incubation Programme logged a record 313 applications for the autumn intake. Legal Ruling: Latvia’s Constitutional Court struck down debt-relief rules that release people without assessing their overall ability to repay. Transport Policy: Saeima is set to approve a fuel tax cut by suspending a safety reserve service fee through end-2026.

Latvian Defence & Procurement: President Edgars Rinkēvičs says Latvia plans to buy U.S. Anduril’s long-range Barracuda cruise missiles, but details on version, quantity, price and delivery timing are still unclear. Security & Hybrid Threats: Estonia attributes the Aug arson at Milrem Robotics in Tallinn to Russian special services and summoned Russia’s chargé d’affaires; NATO and EU leaders backed Tallinn, while Latvia has already handed over suspects linked to the case. Trade & Food Security: Latvia is tightening checks on grain transit as September volumes surge—253,623 tonnes of Russian grain transited via Latvia from Sept 1–24, nearly double last year’s full month—while customs and lab testing focus on whether cargo includes grain stolen from occupied Ukraine. Business & Finance: Nordic Investment Bank signed a long-term lease for 210 m² at Riga’s Origo One, reinforcing the city’s push as a regional finance hub. Innovation & Exports: LIAA’s U.S. trade mission ended with deals in defence tech and genomics, with Latvia–U.S. trade up 13% in 2025 to €1.63bn.

Baltic Security & Defence: Estonia says Russia ordered the Aug. arson at Milrem Robotics in Tallinn, a move it links to wider sabotage aimed at weakening support for Ukraine; Estonia has summoned Russia’s chargé d’affaires and arrested suspects tied to the attack. Latvia Business & Economy: Latvia is tightening checks on grain transit amid concerns about crops stolen from occupied Ukraine, while September transit volumes through Latvia show a sharp rise for Russian grain and a massive jump for Belarusian flows. Finance & Property: Nordic Investment Bank has leased space at Riga’s Origo One, reinforcing the Riga Central Business District’s pull for international finance. Agri-Food Results: Agrova Baltics reported a strong first half of 2026, with revenue up 52% and profit reaching EUR 3.95m, supported by higher egg volumes and capacity expansion. Healthcare Costs: Latvia’s health minister says a 30% pay rise for healthcare workers may be hard to deliver next year, citing budget constraints and slow economic growth. Workplace Safety: Eurostat data show Latvia’s fatal workplace accident rate fell to 2.71 per 100,000 employed in 2024, the lowest since the Covid period.

Latvia Defence & Procurement: Latvia is moving to buy Anduril’s Barracuda jet-powered cruise missiles for long-range strike capability, while Origin Robotics is also teaming up with Anduril to integrate counter-drone tech for testing along the eastern flank. Baltic Security Posture: NATO officials warn Russia’s hybrid and drone threats are edging toward more direct action, pushing Latvia and neighbours to rethink how they defend—using automated anti-drone systems so fighter jets aren’t the first line. Banking & Russia Exit Risk: OTP Bank says it is reviewing whether to exit Russia as ECB scrutiny grows around its planned Luminor acquisition, with a formal strategy review expected by year-end. Energy & Costs: EU gas storage is “exceptionally low” for winter, with LNG supply disruptions tied to the US-Iran conflict and Qatar extending force majeure—raising the stakes for prices and supply. Trade & Logistics: Venipak is investing €2.5m+ to expand parcel locker capacity in Latvia by ~15%, boosting automation across the Baltics. Local Economy & Tourism: Freeport of Riga set a new seasonal record with 150,000 cruise passengers so far, with forecasts pointing to a ~30% rise year-on-year. Crime & Finance: Latvia is linked to an investigation into a Riga property money-laundering scheme involving a convicted suspect.

Port & Tourism: Riga’s Freeport set a new cruise record, welcoming 150,000 passengers so far this season, with forecasts pointing to ~30% more visitors than last year. Logistics & Retail Tech: Venipak is investing €2.5m+ across the Baltics and boosted Latvia parcel locker capacity by ~15% to handle rising volumes. Energy Policy: The European Commission opened infringement cases against 18 EU states, including Latvia, for not fully transposing EU energy-sharing rules. Defence Industry & Procurement: Latvia is building an automated anti-drone “wall” along its eastern border, aiming to make fighter jets a backup rather than the first line of defence. EU Security Industrial Push: EU defence ministers formally backed the first five joint “projects of common interest,” including drone/counter-drone and eastern-flank surveillance, with large multi-year ambitions. Central Banking: Latvijas Banka will hold its annual conference in November on euro-area challenges in the “new geopolitical reality,” with ECB leadership among speakers. Elections & Public Trust: Former Latvian president Valdis Zatlers urged voters not to outsource choices to AI, warning they could be “definitely be fooled.” Business & Innovation: bilt.me, an AI-native app builder from Tallinn, raised about €615k to scale its native iOS/Android app creation platform.