AGP Executive Report

EU Air Passenger Reform: Latvia voted against the long-awaited EU261 air passenger rights overhaul, which would update baggage rules and compensation from 2004-era standards, with implementation targeted for end-2027. Cybersecurity & State Infrastructure: A cyberattack on Latvijas valsts meži has underlined Latvia’s exposure in critical IT systems, with the minister stressing no election register compromise and calling for wider vulnerability checks. Energy Storage Deal: Rolls-Royce Power Systems and Sunly signed contracts for four battery storage systems in Latvia, aiming for 490 MWh capacity and operations starting in Valmiera in 2027. Consumer Protection: Latvia’s Consumer Rights Protection Centre blocked an online furniture retailer (N1 HOME) after hundreds of complaints over late or missing deliveries and delayed refunds. Business Growth: Prime Prometics says it has surpassed €100m in annual revenue in five years by focusing on an underserved customer segment—women over 50. Local Retail Expansion: Kesko Senukai opened a new “K Senukai” store in Ogre, investing nearly €2m and creating 40+ jobs. Drone Damage Compensation: Latvia’s Justice Minister outlined a new compensation mechanism for drone or military incident damage, with claims via the Rural Support Service or municipalities and decisions expected within a month.

Cybersecurity Watch: A cyberattack on Latvijas valsts meži (LVM) showed Latvia’s strategic infrastructure is still exposed, with the smart administration minister urging other institutions to audit vulnerabilities; he said the electronic voter register was transferred to the state before the incident and is not compromised. Crypto Regulation in Focus: Polish-founded Kanga has reportedly secured a Latvian MiCA Class 3 license, positioning it to passport services across the EU as the July 1 MiCA deadline nears; meanwhile, Binance’s MiCA licensing push remains turbulent after withdrawing its Greece application. EU Defence & Innovation: MEPs backed the EU’s AGILE programme to speed up defence innovation, with a push to make grants easier for SMEs and to tighten controls on results and exports. Energy & Markets: European PPA prices edged up in May as multi-technology contracts gained momentum, while storage contracting activity cooled. Latvia Business & Industry: ConiferSoft expanded its forestry supply-chain platform VACS into the Baltics, aiming to help timber firms automate delivery-to-settlement workflows and improve traceability ahead of EU rules. Language Policy: Latvia’s Culture Ministry ordered institutions to stop using Russian in official activities, with a July 30 implementation deadline.

Latvian Culture Policy: Latvia’s Culture Ministry has ordered institutions and state-owned firms to stop using Russian in official activities, including international events, strategic documents, advertising and official websites, with implementation due by July 30 (professional art in Russian is exempt). Crypto Regulation: Polish-founded Kanga says it has secured a Class 3 MiCA license in Latvia, giving it a regulatory base to passport crypto-asset services across the EU. Cybersecurity: A cyberattack hit Latvian State Forests’ IT infrastructure; external systems like its mapping and hunting apps were shut down, while the election-system development was kept separate. Rail Procurement: Vivi will fine Škoda Vagonka €5.7m for delayed electric train deliveries and unresolved defects. Defense Industry: Frankenburg Technologies opened a Riga missile assembly site aimed at mass-producing low-cost air-defense interceptors. EU Packaging Rules: Eight EU countries including Latvia urged the Commission to give “greater clarity” on PPWR implementation, warning SMEs face unrealistic investment demands. Aviation Tech: OXT Technologies received a European Unitary Patent covering its mixed-alcohol sustainable aviation fuel process, including Latvia.

Crypto Regulation in Focus: Binance has withdrawn its Greece MiCA licence bid and says it will stay in the EU, now seeking authorisation via other member states as the July 1 deadline nears, with regulators in Ireland, Latvia and Greece reportedly raising concerns over compliance history and corporate structure. Latvia’s Rail Accountability: After delays and unresolved defects, Vivi (AS Pasažieru vilciens) will impose a €5.7m penalty on Škoda Vagonka, following reviews including independent assessments. New MiCA Player in Latvia: Polish-founded Kanga secured a Class 3 MiCA licence in Latvia (via SIA AlphaRoute), enabling EU-wide crypto services through cross-border notification. Aviation Spotlight: Riga International Airport won ACI Europe’s “Best Airport” award in the 5–10 million passenger category, citing improved passenger experience and sustainability investments. Local Politics Watch: A new SKDS poll shows most Riga City Council leaders’ approval ratings fell in the first half of the year. Business & Industry Growth: Frankenburg Technologies opened a Riga missile assembly factory, aiming for up to 100 missiles per day by end-2026 as it ramps production. Food Supply Concerns: Retailers and producers clash over the share of local products in Latvian stores, with milk coverage lagging despite strong performance in other dairy categories. EU Energy Transition Funding: 12 EU countries including Latvia urge the Commission to extend and scale up the Modernisation Fund beyond 2030.

Crypto Regulation Watch: Binance says it will stay in the EU and is seeking a new route to MiCA approval after Greece rejected its application, with talks reportedly involving Ireland and Latvia and only one week left before it may have to wind down EU services. Latvia Defense Industry: Frankenburg Technologies opened a Riga factory to assemble Mark I anti-drone missiles, aiming for mass production and lower interception costs, with expansion planned to Estonia, the UK and Poland. EU Connectivity Security: The European Commission will fund the first two Regional Cable Hubs (Baltic Sea and Mediterranean) and launch a €40m call to boost capacity to repair submarine cables, with Latvia and Estonia among the Baltic coordinators. Aviation & Business Recognition: ACI EUROPE named Riga International Airport the best in the 5–10 million passenger category at its 2026 Best Airport Awards in Prague. Startup & Entrepreneurship Links: Connect Latvia’s delegation took part in the Cambridge Venture Camp, bringing Latvian start-ups and mentors into an intensive growth programme. Agritech Innovation: Rovensa Next joins the €6.4m Horizon Europe BIO² project to develop circular, bio-based fertilizers and microbial solutions for crop nutrition and plant health.

Baltic Security Watch: Latvian intelligence warns Russia may stage hybrid provocations (drones, missiles and covert actions) to pressure NATO states to cut support for Ukraine, raising fears of miscalculation amid heightened tensions. Local Defence Industry: Frankenburg Technologies opened a Riga plant to assemble Mark I anti-drone missiles, targeting mass production and lower interception costs for Europe. EU Critical Infrastructure: The European Commission is funding Regional Cable Hubs (including a Baltic Sea hub coordinated with Latvia) and launching a €40m call to boost submarine cable repair capacity. Latvia’s EU Funding Push: Latvia signed a €3.5bn SAFE defence loan for drone technology development, underlining the country’s shift toward scalable security capabilities. Entrepreneurship & Growth: Connect Latvia’s Cambridge Venture Camp brought start-ups and mentors to Riga’s ecosystem, aiming to accelerate company building and scaling. Property Market Signal: A new look at European property shows recovery is selective, with prices and investment moving unevenly across countries. Crypto Regulation: Latvijas Banka issued a licence to SIA AlphaRoute for crypto-asset services. Tourism Policy: Latvia’s neighbours debate tourist taxes; the wider EU trend is pushing more local funding for tourism infrastructure.

Latvia’s Grid Gets AI Boost: AS Augstsprieguma tikls (AST) has launched a pilot to automate power-grid inspections using AI and drone imagery, aiming to cut manual review work by 30–50% and spot defects earlier. EU Subsea Cable Protection: The European Commission is funding “regional hubs” to monitor and repair undersea cables after Baltic sabotage concerns, with a Baltic Sea hub coordinated by Finland and involving Latvia, plus a €40m call for repair capacity. Defense Finance for Drones: Latvia has signed a €3.5bn EU SAFE defense-loan deal to develop drone technologies, while Ukraine’s defense industry is being singled out as a fast-moving EU security partner. Air Defense Delivery in the Region: Estonia received the first IRIS-T SLM medium-range air-defense components from Diehl Defence, strengthening NATO air protection in the Baltics. Payments Compliance in Latvia: Google expanded financial advertiser verification to 24 EEA markets including Latvia, adding an extra layer to curb unauthorized financial ads. Travel & Business Connectivity: airBaltic will extend Vilnius–Berlin flights into winter as a year-round route, supporting cross-border travel for both leisure and business. Tourism Funding Policy: Ireland’s cabinet agreed not to oppose councils collecting a tourist tax, a model that could interest municipalities elsewhere in Europe. Commercial Real Estate Insight: Riga-based Silver Fox says it focuses on solving client property challenges rather than selling square metres, reflecting a more strategy-led market approach.

Housing & Living Standards: Eurostat data show a mismatch across the EU: 33.4% of people live in under-occupied homes, with Latvia at 10.5%—far below Cyprus (69.4%) but still highlighting how household needs and housing stock don’t line up. Energy Transition: Renewable energy is still uneven across Europe; biomass and solar dominate the mix (34% biomass, 23% solar in the latest figures), while the Netherlands leads the recent gains in renewable share. Latvia’s Defense & Security: Latvian intelligence warns Russia may stage hybrid provocations against the Baltics or Poland—using drones, missiles and other pressure tactics to test NATO resolve. EU Funding for Defense Tech: Latvia has signed a €3.5bn EU SAFE defense loan to develop drone technologies, with the money tied to security priorities. Public Transparency in Politics: Latvian startup Spotwise launched a free real-time platform tracking political radio ads across Latvia, aiming to make spending and messaging easier for the public to follow. Business Moves: Olvi completed its acquisition of Estonia’s Värska Originaal after a court lifted an injunction, adding a functional drinks and mineral water export platform. Crypto Regulation: Latvijas Banka issued a licence to SIA AlphaRoute for crypto-asset services, signaling tighter but clearer market rules.

EU Defence Financing: Latvia has signed a nearly €3.5bn loan under the EU’s SAFE programme to speed up drones, anti-drone tech, guided missiles and domestic defence industrial capacity, with limited support for Ukraine through 2028. Baltic Air Defence: Estonia took delivery of its first German Iris-T medium-range air defence system, a major upgrade aimed at countering cruise missiles and other aerial threats. Drone Cooperation: Latvia signed a 10-year “drone agreement” with Ukraine and plans about €110m in the first two years, while Estonia reportedly delayed signing over readiness and budget/legal concerns. Energy Transition Funding: Eastern and Central European governments, including Latvia, urged the EU to boost the ETS modernisation fund to secure predictable financing for poorer member states’ cleaner-energy transition. Political Ad Transparency: Latvian startup Spotwise launched a free real-time platform tracking political radio ads across Latvia, including spend estimates, airtime and campaign intensity. Crypto Regulation: Latvijas Banka issued a licence to SIA AlphaRoute for crypto-asset services. Business Deal: Olvi completed its acquisition of Estonian mineral water producer Värska Originaal after courts lifted an injunction. IT M&A: Bittnet Systems sold its 61.68% stake in Elian Solutions to Digmatix AS for €6m.

EU Food & Health: Freshfel Europe says most EU countries miss the recommended 400g-a-day intake of fresh fruits and vegetables; Latvia records the lowest consumption, with residents nearly half below the target, and the sector argues that meeting the goal could expand demand by about 15 million metric tons. Defence Finance: Latvia has signed a nearly €3.5bn loan under the EU SAFE programme to speed up drones, guided missiles, anti-drone tech and defence industrial capacity, with procurement speed and eastern-flank deterrence as priorities. Crypto Regulation: Latvijas Banka has issued a licence to SIA AlphaRoute to provide crypto-asset services under the EU MiCA framework, including custody, trading, exchanges and transfer services. Energy Storage Business: REPT BATTERO highlights growth and innovation at Intersolar Europe 2026, reporting €3.1bn revenue in 2025 (+36.7%) and first full-year profitability, while reinforcing its Inter Milan battery partnership. Riga Film Industry: RIGA IFF FORUM opens submissions for 2026, inviting Baltic and guest-country Finland projects for its showcase and short test screenings. Housing Costs Watch: Eurostat data on rents across European capitals shows the biggest pressure in cities like Dublin and Stockholm, underlining how local supply and demand drive affordability.

EU Defence Financing: Latvia has signed a nearly €3.5bn loan under the EU’s SAFE programme, with funds earmarked for drones, guided missiles, anti-drone tech and expanding Latvia’s defence industry, as Riga pushes faster procurement and deterrence on the eastern flank. Crypto Regulation: Latvijas Banka has issued a licence to SIA AlphaRoute to provide crypto-asset services under the EU’s MiCA framework, including custody, trading, exchanges and transfer services. Baltic Energy & Industry: REPT BATTERO is ramping up international visibility with a reinforced partnership with Inter Milan and plans to showcase energy storage innovations at Intersolar Europe 2026. Local Business & Real Economy: Latvia’s “Latvia First” (LPV) is gaining momentum ahead of the next Saeima, pitching “Latvia first” reforms tied to competitiveness and national cohesion. Markets & Finance: A new OECD look at proxy advisors, ESG ratings and indices highlights how regulation and disclosure vary widely across jurisdictions, shaping stewardship and capital allocation.

EU Defence Finance: Latvia has signed a nearly €3.5bn SAFE defence loan to speed up drones, guided missiles, anti-drone systems and defence-industry capacity, with a focus on faster procurement and deterrence on the eastern flank. Central Banking & Crypto: Latvijas Banka has issued a licence to SIA AlphaRoute to provide crypto-asset services under the EU’s MiCA framework, including custody, trading, exchanges and transfer services. Energy Storage & Industry: REPT BATTERO is ramping up growth messaging ahead of Intersolar Europe 2026 in Munich, highlighting 2025 results (about €3.1bn revenue, first full-year profitability) and a strengthened partnership with Inter Milan. Regional Grid Build-Out: Lithuania’s Litgrid has connected an 80 MW / 186.26 MWh battery storage system to the transmission grid, adding to a growing Baltic storage pipeline. EU Budget Talks: EU leaders are pushing for a preliminary deal on the €2tn long-term budget (2028–2034) by October, as net payers and higher-spend countries clash over priorities like agriculture vs defence. Political Watch: “Latvia First” (LPV) is gaining attention ahead of the next Saeima, pitching “Latvia first” reforms and stronger sovereignty while keeping close ties to NATO and the EU. Housing/Markets: Latvia’s house prices ticked up in Q1 2026, adding another signal for the domestic property market.

EU Defence Finance: Latvia has signed a nearly €3.5bn SAFE defence loan with the EU, with the first €524.7m tranche due in the coming weeks. The preferential loan (to be repaid) will back drones, guided missiles, anti-drone systems and faster procurement, plus growth of Latvia’s defence industry and jobs. Crypto Regulation: Latvijas Banka has issued a licence to SIA AlphaRoute to provide crypto-asset services under the EU’s MiCA framework, covering custody, trading, exchanges and transfers. ICT Procurement Politics: A Latvian media round-up highlights a 30-day moratorium on major ICT procurements and plans to overhaul state ICT governance, alongside ongoing debate over LSM rebranding. Energy & Grid Flexibility: Lithuania connected an 80 MW/186.26 MWh battery storage system to the grid, underscoring the region’s push for balancing as renewables rise. Local Business & Tech: LMT is rolling out a private 5G network with Pampali for industrial testing and production optimisation in Kurzeme. Travel Watch: Heathrow warned travellers heading to Schengen (including Spain and France) to expect extra queues from the Entry/Exit System rollout.

EU-Russia Diplomacy Rift: EU Council President Antonio Costa’s Kremlin contacts have sparked backlash among leaders, with Nordic and Baltic states most disturbed and debate growing over who should have a mandate for any peace channel. EU Budget Talks: EU leaders agreed to aim for a preliminary deal on the €2 trillion long-term budget (2028–2034) by October, as net payers push spending cuts while southern and eastern states fear agriculture and cohesion will lose out. Latvia-Ukraine Defence Commitments: Latvia signed a 10-year drone and defence cooperation framework with Ukraine in Tallinn, with about €110m earmarked for the first two years, while more countries pledged over $1bn under the US PURL weapons initiative. Latvia Digital TV Case: Latvia’s Supreme Court overturned an acquittal in the “digital television” criminal case and ordered a retrial, citing improper assessment of losses and inconsistent evidence review. Latvia ICT Procurement Pause: Prime Minister Andris Kulbergs announced a 30-day moratorium on major ICT procurements amid plans to overhaul state ICT governance. Energy & Infrastructure: Estonia unveiled the Gulf of Riga offshore wind grid connection plan, with public consultation running until 26 July 2026. Local Business & Tech: LMT began deploying a private 5G network for agricultural testing with Pampali in Kurzeme. Consumer/Travel Friction: Heathrow warned Schengen travellers about extra queues tied to the Entry/Exit System (EES), which can add delays at passport control.

EU Budget Battle: EU leaders head into fresh talks on the next €2 trillion long-term budget, with “Friends of Cohesion” (including Latvia) pushing to protect agriculture and regional funding while “frugal” net-payers led by Germany and the Netherlands want cuts and more room for defence. Ukraine Support via PURL: Latvia is among countries pledging over $1bn under the U.S.-backed PURL initiative to buy American weapons for Ukraine, with early focus on air defence and ammunition. Latvia ICT Procurement: Prime Minister Andris Kulbergs has ordered a 30-day moratorium on major ICT procurements as the government plans to overhaul state ICT governance, while debate continues over LSM rebranding and possible tax hikes. Digital TV Court Ruling: Latvia’s Supreme Court has reopened the “digital television” criminal case, overturning an acquittal and sending it back for a new hearing. Energy Costs Watch: Conexus Baltic Grid plans higher natural gas transmission tariffs from Oct 2026, with expected end-user impacts described as limited. Private 5G in Kurzeme: LMT is rolling out a private 5G network with agricultural firm Pampali to improve production and safety. Energy Storage Deal: Futureal acquired two battery storage projects in Latvia’s capital region (Bolderaja and Bisuciems) for operation from late 2026. Local Business & Culture: Pro Kapital starts its €23m “Blue Marine° Residence” project in Riga’s Klīversala, while the traditional Herb Market opens in Old Riga with 260+ vendors for Midsummer.

EU Budget Battle: EU leaders in Brussels are negotiating the €2 trillion long-term budget for 2028–2034, with “Friends of Cohesion” (including Latvia) warning agriculture and regional funding could be cut from ~60% to 44% as net payers push austerity and higher defence priorities. Energy Costs Watch: Latvia’s gas transmission and storage operator Conexus Baltic Grid plans tariff changes from Oct 1, 2026, with an estimated ~7% rise in the resource-based transmission fee and a shift toward a capacity-based model in 2027. Baltic Defence Angle: NATO chief Mark Rutte calls the Ukraine Defense Contact Group meeting a “window of opportunity,” citing hundreds of millions pledged via the PURL programme, including Latvia’s participation. Latvia Pharma Export Push: JSC Olpha is creating Olpha Labs to expand exports of pharmaceutical R&D and drug development services, building on its existing scientific research centre. Trade Signals: Armenia exported 411 tonnes of greenhouse vegetables and strawberries plus ~1.8m flowers to 15 countries, including Latvia, while Russia tightens restrictions on some Armenian products. Business & Labour Risk: A landmark human-trafficking labour exploitation case saw two men jailed in Ireland for recruiting victims in Latvia, highlighting cross-border supply-chain and worker-protection concerns.