AGP Executive Report

Baltic Aviation Deal: Gategroup is expanding in the Baltics by buying LSG’s airline catering and onboard retail operations in Latvia and Estonia, adding Riga and Tallinn airport sites and about 250 jobs. Latvia Politics & Finances: A LETA analysis of 15th Saeima election filings highlights candidates with unusually large vehicle fleets, property portfolios and debts, underscoring how varied Latvia’s political field is. Air Travel Rules: From next year, EU rules will limit extra fees for seat selection; an airBaltic case showed a six-year-old being assigned a seat away from parents when check-in happened late, later fixed by the airline. Power Interconnectors: Estonia and Latvia’s electricity link plans are moving forward, with a new Estonia–Latvia route expected to strengthen supply security and enable more renewables, though timing remains unclear. Housing Costs Snapshot: Greece’s mortgage rates have fallen below the eurozone average, while Latvia is reported among the highest-rate markets in the fixed-rate segments. Food Safety: A salmonella outbreak linked to flavoured instant noodles has sickened at least 106 people across 14 countries, including Latvia, raising fresh questions for traceability and enforcement. Regional Trade Pressure: Latvia’s economy is said to be unlikely to feel major impact from Russia closing the Karsava–Pytalovo rail border crossing, as rail volumes with Russia have already dropped sharply.

Baltic Supply Security: Latvia and Estonia opened a “Stronger Together” business forum in Tallinn, signing a memorandum to cooperate on supply security and strategic state reserves—aimed at tighter coordination during crises and better information exchange. Rail Freight Shock: Latvia’s Ministry of Economy says Russia’s closure of the Karsava–Pytalovo rail border crossing won’t hit Latvia’s economy much, noting rail freight with Russia has already collapsed by about 92% since 2019 as trade rerouted toward EU and Northern Europe corridors. Cyber & Infrastructure Resilience: Latvia’s electricity network faces daily cyber attacks, while “Latvijas valsts meži” remains under investigation after a hacker stayed undetected for days—raising pressure on national systems and incident response. Crypto Regulation Watch: ESMA expanded its MiCA register list by 37 firms, underscoring how the new EU crypto rules are reshaping market access. Defence Industry Momentum: Latvia is pushing for EU defence funding and highlights new drone and security capacity, as NATO leaders head into the Ankara summit with unity and spending priorities back in focus.

Riga Business Resilience: Fire-damaged “The Sinners Bar” in Rīga has reopened after a major electrical-short blaze, a quick reminder that local nightlife and small operators can bounce back. Baltic Border & Transport: Latvia’s economy is unlikely to feel immediate pain from Russia closing the Karsava–Pytalovo rail crossing, but the move further shrinks EU–Russia transport links as rail freight with Russia has already collapsed by about 92% since 2019. Food Safety Watch: A salmonella outbreak tied to flavoured instant noodles has sickened 100+ people across 14 countries, including Latvia, putting traceability and enforcement back in focus for EU consumers. Crypto Regulation: ESMA expanded its MiCA register by 37 new crypto-asset service providers, lifting the total to 280, with Standard Chartered among notable entrants. Defence & Industry Funding: Latvia’s Ministry of Defence is urging companies to apply for European Defence Industry Programme grants (up to €30m per project), including work with Ukraine on drones, missiles and anti-drone systems. NATO Eastern Flank: Ahead of the Ankara summit, NATO diplomats stress unity and solidarity as Russia’s “limited provocation” risk keeps the region on edge. Cross-Border Migration: Poland detained 54 migrants hidden in a cargo truck near the Lithuania border, with preliminary reports pointing to a route via Latvia and Lithuania.

MiCA Enforcement Push: ESMA expanded its MiCA crypto-asset service provider register by 37 firms, lifting the total to 280 after the July 1 transition deadline; Standard Chartered and FalconX are among the notable new entrants, with Latvia listed as having one new authorization. EU Energy Finance: The European Commission and EIB approved a €2.5bn Modernisation Fund disbursement, with Latvia receiving €40m for 51 energy projects across 11 EU states. Latvia-Russia Trade Shock: Latvia’s Economy Ministry says Russia’s closure of the Karsava–Pytalovo rail border crossing won’t hit Latvia’s economy much, noting rail freight volumes with Russia have already fallen nearly 92% since 2019. Defence Industry Funding: Latvia’s Ministry of Defence invited companies to apply for EDIP grants up to €30m per project, including support for electronics, platforms and end products, plus an EU-Ukraine ammunition and drone-focused track. NATO Summit Focus: Ahead of the Ankara summit, NATO diplomats stressed “unity and solidarity,” while Baltic leaders and Germany’s Merz urged turning defence spending pledges into real capabilities. Food Safety Watch: A salmonella outbreak linked to flavoured instant noodles has reached 106 cases across 14 countries, including Latvia, raising pressure on traceability and enforcement.

MiCA Momentum: ESMA added 37 newly licensed crypto-asset service providers to its MiCA register after the transitional period ended, bringing the total to 280; Standard Chartered (via Luxembourg) and other entrants like FalconX and Sygnum Europe are among the headline names. Cyber & Critical Services: Cert.lv says the same ransomware actor behind the Latvijas valsts meži breach also hit pharmaceutical maker Olpha, with unauthorised access to at least one server and deleted logs detected. Defence Funding Call: Latvia’s Ministry of Defence opened EDIP funding applications, offering grants up to €30m per project to boost EU and Ukraine defence production, including ammo, missiles and unmanned/anti-drone systems. Energy Investment: The EU and EIB approved a €2.5bn Modernisation Fund round for 51 clean energy projects across 11 states, with Latvia receiving €40m. Baltic Security Coordination: Latvia and Estonia signed a memorandum to cooperate on strategic reserves and supply security, with joint action planned for 2026–2028. NATO Summit Prep: Baltic leaders met in Berlin ahead of Ankara, pushing for turning defence spending targets into real capabilities and strengthening the defence industry.

MiCA Rollout in Focus: ESMA has updated its interim MiCA crypto register with 37 newly licensed crypto-asset service providers, lifting the total to 280 (from 243). Standout entrants include Standard Chartered (MiCA + EMI authorisation via Luxembourg) and FalconX, with Cyprus leading the latest batch. Defence Funding Push: Latvia’s Ministry of Defence is inviting companies to apply for European Defence Industry Programme (EDIP) grants of up to €30m per project, including work on electronic components, platforms and end products, plus Ukraine-focused ammunition and drone initiatives. Cyber Risk Spreads: Cert.lv says the same ransomware actor behind the Latvijas valsts meži breach also compromised a server at pharmaceutical manufacturer Olpha; data was not encrypted and log files were deleted, with investigations ongoing. Regional Business & Transport: Latvia and Estonia signed a memorandum to cooperate on strategic reserves and supply security, with joint action planned for 2026–2028. EU Energy Money: The Commission and EIB approved a €2.5bn Modernisation Fund round for 51 clean energy projects across 11 EU states, with Latvia among recipients. Travel Rules Headache: Canada Post is pausing low-value parcel delivery to several EU countries due to the EU’s new €3 customs duty on small shipments, while continuing to accept deliveries to Latvia.

Regional Security & Reserves: Latvia and Estonia signed a memorandum to cooperate on supply security and strategic state reserves, with closer coordination, information exchange and joint crisis actions via Latvia’s Possessor and Estonia’s State Reserve Agency, plus a 2026–2028 joint action plan covering fuel reserve management and responses to electricity disruptions. EU Clean Energy Push: The European Commission and EIB approved a €2.5bn Modernisation Fund round for 51 clean energy projects across 11 EU states, including Latvia (€40m), targeting grid upgrades, energy storage, industrial efficiency and electrification. Property Curbs for Security: Estonia moves to restrict real estate purchases by Russian and Belarusian citizens and controlled entities without long-term residence permits, aiming to reduce risks of hostile-state influence and strategic footholds. Food Safety Shock: A salmonella outbreak linked to flavoured instant noodles has reached 14 European countries with 106 cases reported since Nov 2025; Latvia is among the affected, with investigations pointing to a common Ukrainian producer. Latvia Market Watch: Latvia’s new car market declined slightly in Jan–May, with leasing firms citing fewer financing applications and the end of government support for greener vehicles as key factors. Energy & Cyber: Sadales tīkls says it faces cyberattacks every day, requiring ongoing security investment and specialist hiring.

Rail & Trade Shock: Finland’s Nurminen Logistics warns Russia’s July 1 rail tariff hikes for cargo to Finland and the Baltics will cut 2026 net sales by about €4–5m, with profitability hit expected in the second half. Cybersecurity & State Systems: Latvia’s electricity grid operator Sadales tīkls says it faces cyberattacks every day (no major breaches so far), while the PM says a hacker stayed undetected for days in “Latvijas valsts meži” before active operations began. Property Rights vs Business Registration: Latvia’s Ombudsman urges fixes after finding the current business registration system can let unauthorised parties register firms at someone else’s property without the owner’s consent. EU Energy Funding: The EU and EIB disbursed €2.5bn from the Modernisation Fund for 51 energy projects, including upgrades and electrification support for Latvia and other lower-income member states. Transport & Infrastructure: Riga starts faster charging for electric buses via new fast-charging stations; meanwhile, Latvia’s Rail Baltica debate continues as the finance minister says abandoning the project isn’t an option. Public Health: A multi-country salmonella outbreak linked to flavoured instant noodles has reached 14 countries, including Latvia. Defense & Industry Links: Ukraine approved a new defence export mechanism, with Latvia named among partners that can get faster approvals for “Drone Deal” related technology.

Rail Disruption: Russia has ordered the temporary closure of several railway border crossings with Finland, Estonia and Latvia from July 1, suspending passenger, vehicle and freight movement at key checkpoints including Pechory-Pskovskiye (Estonia) and Pytalovo (Latvia), with Estonia rerouting affected freight via Narva. Rail Baltica Watch: Latvia’s finance minister says Rail Baltica can’t be abandoned, but the country must now clearly decide what it will build versus not, as timelines and funding responsibilities come under pressure. Public Transport Upgrade: Riga’s electric buses will switch to faster charging from Wednesday, with seven fast-charging stations cutting charging from hours to minutes and boosting fleet availability. Rail Tech Push: LMT and Latvijas dzelzceļš are testing a private 5G network for railway operations, aiming to support future EU FRMCS requirements by 2035. Food Safety Alert: A multi-country salmonella outbreak linked to flavoured noodles has reached 106 confirmed cases across 14 countries, with Latvia among affected states and a producer in Ukraine named in the investigation. Local Governance & Environment: Residents in Lēdurga oppose a biomethane expansion, citing odour, road damage and water contamination risks. Election Preparedness: Latvia’s Central Election Commission outlines emergency procedures for polling stations, prioritising safety and election materials during threats. New Defence Player: LAT Defence has launched in Latvia with €2m to develop and train for unmanned systems and protect critical infrastructure.

MiCA Deadline Shock: From July 1, EU crypto firms can’t rely on transitional rules anymore—only granted MiCA authorisations allow cross-EU service, raising pressure on providers and clients. Latvia Tech & Cybersecurity: Cert.lv says 44GB leaked after the Latvijas valsts meži cyberattack includes internal docs, source code, certificates, keys and password data; LVM must restore systems and replace compromised credentials. Defence Industry in Riga: Frankenburg opened a missile assembly factory in Riga, aiming for up to 100 missiles per day by end-2026, with a second Ādaži site planned. Rail & Trade Disruption: Russia suspended several rail border crossings with Finland, Estonia and Latvia from July 1, affecting passenger and freight routes. Digital Infrastructure: LMT and Latvijas dzelzceļš demonstrated private 5G for railway infrastructure management, paving the way for FRMCS by 2035. Business Growth & Skills: The Exporters’ Skills Fund was launched to tackle export-focused talent shortages, while Digmatix acquired Microsoft partners in the Czech Republic and Romania to expand its Microsoft business-apps footprint. Latvia at Home: Rocket Bean Café ranked 51st in Europe’s 100 Best Coffee Shops list.

NBA Business: Latvian center Kristaps Porzingis is staying with the Golden State Warriors on a two-year, $40m deal, keeping him off the free-agent market as the team reshapes its roster after a 37-45 season. Public Health Funding: Latvia’s National Immunisation Council is urging the government to approve €600,000 for universal passive RSV protection for newborns during the 2026 season, arguing prevention is cheaper than hospital overload. Food Security: The Latvian government backed €9m to build national food reserves, with long-shelf-life staples and ready-to-eat meal kits managed via a delegation agreement. Trade & Compliance: Canada Post will pause parcels to 12 EU countries from July 1 due to new EU rules introducing a €3 customs duty on low-value shipments, while Latvia remains among the unaffected destinations. Regional Business Links: A Latvia–Estonia Business Forum in Tallinn on July 2 will bring together 45+ Latvian firms in defence, ICT and cybersecurity to find partners and deals. Crime & Enforcement: Latvian police dismantled an organised cigarette-selling group, seizing 12.8m unstamped cigarettes plus production materials and firearms. Corporate Expansion: DIGMATIX acquired Microsoft partners in the Czech Republic and Romania, expanding its Dynamics 365 and CRM footprint across Central and Northern Europe. Wealth Watch: UBS reports a record surge in new global millionaires in 2025, with strong growth across Europe and Latvia among faster-rising markets.

Latvia-Ukraine Defense Industry: Latvia will build a joint drone manufacturing facility with Ukraine in Latgale, close to the Russian and Belarus borders, with Latvia supplying anti-drone systems and Ukraine providing strike drones and robotic complexes; construction is set to start this year. Corporate Expansion: DIGMATIX (ex-Digital Mind) has acquired Microsoft Business Applications partners in the Czech Republic and Romania, adding 530+ staff across eight countries and boosting its CRM and Dynamics 365 capabilities. Public Finance & Compliance: Region Trade Bank became Iraq’s first bank to set up a board of global financial-integrity leaders, with Latvian Financial Intelligence Unit head Ilze Znotina among the appointees. Business & Consumer Policy: Reduced VAT rates for certain basic food products kick in from July 1, with a voluntary “Honest VAT reducer” sticker scheme for retailers. Economy Pulse: Latvia’s retail trade turnover rose in May (up 3.3% year-on-year), led by online/mail order and pharmaceuticals. Transport & Mobility: ATD registered the Smile Taxi app for Latvia-wide use, aiming to bring 500+ vehicles onto the platform. Infrastructure Funding Watch: Rail Baltica faces a roughly €10bn funding gap for the first phase, with EU support after 2028 uncertain. Security & Crime: German prosecutors announced charges over €60m+ laundering involving fake companies and crypto, with Latvian-linked suspects among those accused.

Latvia-Ukraine Defence Industry: Latvia confirmed a deal to help build a joint Ukrainian drone manufacturing plant on Latvian soil near the Russian border, with plans to accelerate the project after an early-June cooperation agreement. Capital Markets: LAU Infra Group’s IPO drew 1,981 investors and raised about €6.19m for 3.94m shares, with pension funds among the biggest participants—an early sign of appetite for state-linked infrastructure listings. Infrastructure Funding Crunch: Rail Baltica’s next phase is stuck between “wasting time” on redesigns and “wasting money” on costlier options, as the Baltic states face a roughly €10bn gap and hope EU budget support will bridge it. Tax Enforcement: EPPO arrested 11 suspects across Germany, Poland and Latvia in a diesel VAT fraud probe tied to €240m losses, targeting “designer fuels” used to dodge energy taxes. Trade Policy: Latvia is drafting amendments to ban imports of certain industrial goods from Russia and Belarus (including via third countries), with the final product list to be set by Cabinet rules. Aviation & Business Travel: airBaltic will extend the Tallinn–Vienna route into winter as a year-round connection, supporting leisure and business demand. Labour Market Watch: EURES data shows Cyprus facing shortages in 63 professions, with the biggest gaps in healthcare and tech—useful context for regional hiring competition.

Latvia-Ukraine Defence & Industry: Latvia and Ukraine are moving toward joint drone manufacturing, with plans for a facility near Latvia’s eastern border in Latgale and counter-drone systems expected to be operational along the border with Russia and Belarus in July-August. airBaltic Network: airBaltic will make the Tallinn–Vienna route year-round, extending the direct service into winter with up to twice-weekly flights. Trade Policy: Latvia is drafting amendments to ban imports of certain industrial goods from Russia and Belarus (via EU code lists), aiming to cut aggressor-state revenues. VAT Crackdown: EPPO arrested 11 suspects across Germany, Poland and Latvia in a diesel VAT fraud probe linked to €240m tax losses, involving “designer fuels” relabelled as diesel. Fintech/Crypto Licensing: Latvia is positioning itself as a MiCA licensing hub, with Backpack among firms receiving MiCA approval from Latvijas Banka. Energy Storage Push: EU member states backed a deal to scale energy storage deployment to about 45 GW by 2026-2028. Local Business & Compliance: Latvia’s Food and Veterinary Service launched enforcement against Topfruit over cherry packaging hygiene breaches. Corporate Pay: airBaltic CEO Erno Hilden earned €57,211 in December 2025, about 18% less than former CEO Martin Gauss’s average monthly pay. Agriculture: Latvian farmers warn they can’t compete with Poland on blueberries, while local growers push for smarter agricultural policy. Public Space/City Life: A new mural, “Riga’s Atlantis,” is being painted in the underground passage between Riga Central Station and Riga Central Market.

Food Safety Crackdown: Latvia’s Food and Veterinary Service (PVD) launched enforcement against SIA “Topfruit” after it found cherries were being packaged in a warehouse previously ordered closed, with hygiene breaches including no hot water, missing staff health checks, and unlabeled boxes—leading to a distribution suspension and seized goods. Fintech & Mobility: Bolt reported its first net profit in company history (net €0.9m) alongside 14% revenue growth to €2.27bn, while noting no abuse of dominance after Latvia’s Competition Council probe. Central Banking Watch: Bank of Latvia Governor Mārtiņš Kazāks signaled the ECB doesn’t need “multiple hikes in a rushed way” after the June 11 rate increase, easing pressure on risk assets. Security Assessment: Latvia’s Constitution Protection Bureau says Russia is more likely to use hybrid attacks and provocations than a large conventional strike against the Baltics, aiming to pressure NATO support for Ukraine. Agri-Trade Pressure: Latvian farmers warn they can’t outcompete Poland in blueberries and argue agricultural policy should focus on what producers can realistically grow profitably. Drone Sector Growth: Latvia’s drone industry is expanding autonomous systems for maritime, land and underwater uses, with growing emphasis on training new drone pilots. Crypto Regulation Ripple: ECB comments and broader EU crypto licensing moves continue to shape market expectations around the July 1 MiCA deadline. Business & Economy: Bolt’s results and Latvia’s enforcement actions underline how regulation and profitability are moving together in the local market.

Latvia in the NHL spotlight: The Edmonton Oilers used their 58th pick on Latvian centre Rudolfs Berzkalns, adding size “in the middle” as they look to rebuild their forward depth. Draft fallout for Edmonton: Analysts branded the Oilers “losers” of the 2026 draft, arguing the picks didn’t deliver enough upside—though Berzkalns’ pro tools could still develop into a bottom-six role. Toronto goaltending insurance: The Maple Leafs are stacking goalie depth via the draft, while GM John Chayka weighs how their young pipeline (including Arturs Akhtyamov and Dennis Hildeby’s line) fits the next NHL season. EU security shift: Baltic leaders told Euractiv that Ukraine’s war is forcing the EU to move from “peace without arms” to “peace with arms,” with defence cooperation now central to Europe’s future. Climate pressure across Europe: A record heatwave is driving casualties, power outages and wildfire risk, with France and Germany setting new temperature records. Golden visas trend: A report says Latvia’s golden visa programme is among the most accessible in the EU, with applications up 51% in 2025 as families treat residency as long-term insurance. Digital tax trade tension: The US warns of 100% tariffs if EU countries proceed with digital services taxes, while the EU says it will retaliate to defend regulatory autonomy.