AGP Executive Report

Security Watch: Latvia is stepping up protection of critical infrastructure after intelligence warnings of possible Russian hybrid or sabotage moves, with extra surveillance at the Incukalns underground gas storage and a hydroelectric dam upstream from Riga. Aviation & Economy: Latvia’s government is in talks with a strategic investor to rescue struggling airBaltic and avoid a default, with a key bondholder financing meeting set for August 3 and a condition to keep the Riga hub. EU/Latvia Border Pressure: Riga says Belarus is shifting migration pressure toward Latvia ahead of the 3 October parliamentary election, citing a sharp rise in attempted illegal crossings. Finance & Compliance: Swedbank has agreed to a $50 million fine in New York over Panama Papers-related withholding of information, including issues involving its Baltic operations. Environment & Fisheries: Nine EU countries, including Latvia, are urging Brussels to ease cormorant culling rules as the bird’s numbers rebound and fishers warn of severe damage to stocks. Local Life: Riga-area readers also saw broader regional disruption reports, including severe storm impacts and power outages in the wider region.

Baltic Security: Latvia has boosted protection at critical energy sites, including the Incukalns gas storage and a hydroelectric dam upstream of Riga, after warnings that Russia may be planning a “quick win” hybrid attack. Migration Pressure: Latvia says Belarus is shifting its hybrid pressure to Latvia’s border ahead of the 3 October parliamentary election, with 111 attempted illegal crossings recorded in one day. airBaltic Finance: Latvia is negotiating with a strategic investor for struggling airBaltic as the airline seeks short-term funding from bondholders on August 3; Transport Minister Kozlovskis also says the business plan no longer focuses on global growth. EU/Latvia Business: LMT Group reported H1 revenue up 11% to EUR 169.3m and EBITDA up to EUR 47.4m, with subscriber growth. Riga Sports & Culture: Riga’s football is in the spotlight as Armenian champions Ararat-Armenia advanced in the Champions League qualifiers after beating Riga over two legs; meanwhile, a Riga-based cultural film project is in postproduction.

AirlBaltic Rescue Talks: Latvia’s PM Andris Kulbergs says the government is negotiating with a “strategic investor” to keep struggling airBaltic flying, ahead of an Aug 3 bondholder meeting for short-term funding. Energy Security: Latvia has boosted protection at the Inčukalns gas storage site and a hydroelectric dam near Riga after warnings of possible Russian sabotage and hybrid attacks, with requests to NATO for more air defence and troops. NATO After Ankara: Latvia’s NATO ambassador Maris Riekstins calls the Ankara summit a success for reaffirming Article 5 and extra defence investment, while broader debate continues over alliance unity. NGO Funding Scrutiny: A political scientist warns Latvia’s NGO sector could face major funding reforms, separating “genuinely useful” groups from those seen as overly dependent on public money. EU/Latvia Economy Watch: LMT Group reports H1 revenue up 11% to EUR 169.3m and EBITDA up 2.5%, while a survey says over half of Latvians feel insecure about retirement. Local Crime Probe: EPPO indicted a Latvian farmer in Riga over suspected EU subsidy fraud tied to robotic milking equipment, including alleged false videos. Riga Sports: Riga FC beat Ararat-Armenia 3-2 at home in UEFA qualifiers but were eliminated on aggregate.

Critical Infrastructure Security: Latvia has boosted protection at the Inčukalns underground gas storage and a hydroelectric dam upstream from Riga after intelligence pointed to possible Russian sabotage and hybrid attacks, with Prime Minister Andris Kulbergs saying he asked NATO for more air defence and allied troops and for faster integration of an anti-drone system developed with Ukraine. EU Migration Rules: The European Commission has launched legal action against 17 member states, including Latvia, for not fully transposing the revised “single permit” rules on time, with potential cases heading to the EU Court of Justice. EU Funding Fraud Case: Latvia’s EPPO has filed a case against a farmer accused of aggravated fraud over EU subsidies for robotic milking equipment, alleging the hardware was not installed or operational and that a fabricated video was used to claim reimbursement. Economy Watch: Latvijas banka published its latest Macroeconomic Projections Report, citing heightened geopolitical uncertainty and higher energy prices as pressures on Latvia’s export outlook, while saying financing conditions remain favourable. Local Life & Society: A survey for Luminor Bank found over half of Latvians feel financially insecure about retirement, with women reporting higher insecurity than men. Weather: A rain band and thunderstorms are expected to move across Latvia over the weekend, after a mostly dry Friday.

Retirement Anxiety: More than half of Latvians (52%) say they feel financially insecure about retirement, with only 14% confident, according to a Luminor Bank survey—women report higher insecurity than men. Russian Threat to Energy: Prime Minister Andris Kulbergs says Latvia has boosted security at the Inčukalns gas storage and a hydroelectric dam near Riga after intelligence pointed to a Russian hybrid threat; he also asked NATO for more air defence and troops, plus faster integration of a counter-drone system. Baltic Security Warnings: Lithuania’s president says intelligence indicates limited operations targeting critical infrastructure across the Baltics and Poland, while Russia dismisses the claims as “scare stories.” Sports Diplomacy: The IOC defended its provisional move to lift the Russian Olympic Committee suspension, after nine EU countries including Latvia urged the EU to stop funding federations that readmit Russian and Belarusian athletes. Port Green Push: Riga’s Port authority unit LVR Flote joined a Baltic project to cut CO2 from pilot boats using low-emission tech and shared recommendations. Riga Cycling: Rīga plans new and extended cycle lanes on Lāčplēša, Marijas and Šarlotes streets to improve safer, continuous connections. Business Watch: Tele2 Latvia reported H1 revenue up 5.8% to €92.8m and EBITDA up 13% to €42.1m.

Baltic Security: Latvian Prosecutor General’s Office opened a criminal case against Belarus border officials, alleging a deliberate, systematic hybrid effort to push migrants across the Latvia-Belarus border since 2021. Russia Watch: President Edgars Rinkēvičs said intelligence suggests Russia may be preparing provocations against the Baltic states, potentially using sabotage and hybrid attacks to test NATO resolve. NATO/Infrastructure Warnings: Lithuania and Latvia’s presidents warned Moscow may target energy and transport infrastructure, with Kremlin officials dismissing it as “fearmongering.” Sports Politics: Nine EU countries including Latvia urged the EU to cut funding to the IOC and federations after the IOC provisionally lifted the suspension of the Russian Olympic Committee; the IOC says the move is provisional and not a broader shift. Local Economy/Transport: Latvia’s government approved changes to military national service rules, allowing 17-year-olds to pre-register and volunteer ahead of conscription. Riga Development: NORDSPACE secured EUR 1.2m financing from Signet Bank for a smart storage expansion at Jūrkalnes Street 62 in Riga. Weather: Mostly dry days ahead, then a weekend cyclone brings rain and possible thunderstorms.

Baltic Security Alerts: Latvia and Lithuania say intelligence points to Russia planning targeted attacks on critical infrastructure in the Baltics or Poland, with Riga warning Moscow could try to “test” NATO’s Article 5 through sabotage and hybrid moves. EU Sports Funding Clash: Nine EU countries, including Latvia, ask the European Commission to cut EU funding to the IOC and other federations that have allowed Russian and Belarusian athletes back, after the IOC provisionally lifted the ROC suspension. Latvia’s Military Draft Update: The Cabinet approved changes to Latvia’s State Defence Service rules, letting 17-year-olds pre-register and volunteer earlier, with Saeima review still needed. airBaltic Finance Pressure: Reuters reports airBaltic will seek short-term interim financing from bondholders at an Aug. 3 meeting to avoid default risks. Riga Infrastructure: Vanšu Bridge renovation may bring major traffic disruption, with “park and ride” and extra public transport routes being considered. Local Business: Riga entrepreneur Gunārs Ķirsons launches the DABA fast-casual restaurant concept with about EUR 4.5m investment and two planned openings this year.

Latvia–Lithuania Security: President Edgars Rinkēvičs is set to visit Lithuania for talks with President Gitanas Nausėda on bilateral ties, regional security and support for Ukraine, with meetings in Vilnius and a program in Klaipėda. Russia–Baltics Legal Pressure: Russia is preparing a legal offensive at the International Court of Justice against Latvia, Lithuania and Estonia, alleging discrimination against Russian speakers and pointing to education, cultural and monument changes. Border Tensions: Lithuania’s new Interior Minister says border checks with Latvia could be reintroduced as migrant flows from Belarus via Latvia rise. Defense Drills: Latvia is taking part in the multinational Sea Breeze naval exercise focused on mine countermeasures, with operations underway off the UK. Telecom Deal Scrutiny: Latvia’s PM Andris Kulbergs says the planned LMT–Tet buyout still lacks a clear, “easy-to-understand” explanation and is not ready to proceed. Digital Euro: The ECB has selected 36 payment service providers for the digital euro pilot starting in late 2027, including Latvian institutions. Weather: Fog and unsettled conditions are expected later this week, with rain and stronger winds over the weekend.

EU Sports Funding Clash: Nine EU countries, including Latvia, are urging the European Commission to cut funding to the IOC and other federations after the IOC provisionally lifted its suspension of Russia’s Olympic body, arguing Ukrainian athletes still lack fair conditions. South China Sea Diplomacy: India backed the 2016 arbitral ruling and stressed freedom of navigation and peaceful dispute settlement under UNCLOS, as China again rejected the anniversary statements. Latvia Demographics: Eurostat regional projections point to a sharp population decline in Latvia by 2050, with Rīga and Latgale among the most affected. Workplace Tragedy in Riga: The remains of a Latvian Railways employee who fell into the Daugava were found on Zaķusala island; an investigation is underway. Education Results: More Latvian lower secondary students failed centralised exams this year, with the biggest challenge again in mathematics. Local Economy & Trade: Latvia’s PVD stepped up checks on strawberry origin after labelling violations, including cases where imported fruit was marketed as local.

Tourist Tax Debate: Pärnu and local authorities in Estonia back a new tourist tax, while Tallinn warns it could hurt tourism; Riga’s city charge is set to rise from €1 to €2 per night next year. Digital Euro Pilot: The ECB has picked 36 payment providers for the digital euro pilot, starting in the second half of 2027 for 12 months. Latvia Telecom Deal: Latvia is in talks with 23 potential investors over Telia’s planned exit from its stakes in LMT and Tet, a major telecom transaction expected to reshape the sector. Politics in Riga: Aleksejs Rosļikovs, who fled to Belarus, says he plans to return to Latvia on 4 October to resume work for Stabilitātei! (For Stability!) ahead of the autumn parliamentary election. Gender & Football: Latvia and Ukraine are using football to tackle gender stereotypes through the TARGET project, with different starting points in participation and inclusion. Environment: Latvia’s textile waste problem is growing fast, and experts say recycling still isn’t working well enough. Weather: Warm conditions continue in Latvia, with thunderstorms possible overnight and a more unsettled, rainier end-of-week forecast.

Defense & NATO posture: 80 Iowa National Guard members are set for a year-long deployment to Eastern Europe, with stations including Latvia, as part of “Operation Atlantic Resolve.” Security & hybrid threats: Latvia’s border guard chief says Belarus is targeting Latvia in a hybrid war, with border pressure posing major challenges. EU cyber crackdown: The EU and UK imposed sanctions on Russian military intelligence officers, hackers and firms over a long-running cyberespionage and sabotage campaign affecting critical infrastructure across Europe. South China Sea diplomacy: Latvia joined a 14-country statement reaffirming the 2016 arbitration ruling that rejects China’s expansive South China Sea claims; China responded with a fresh foreign ministry statement. Energy & resilience: Lithuania’s electricity price rose 14% in June, driven by lower wind generation, while the Baltics reduced overall consumption and generation. Local governance & economy: Latvia’s Finance Ministry says meeting higher defense spending targets will require major new funding, warning that current tools like borrowing could worsen inequality. Riga & Latvia business: RIX Riga Airport confirmed Normunds Feierbergs to its board, focusing on finance and IT for infrastructure growth. Environment & outdoors: Latvia’s wolf hunting quota for 2026/27 is raised to 400 animals, split into two management units. Sports: VEF Riga is seeded for the FIBA Europe Cup, with the draw set for the 2026-27 season.

ICJ Case Prep: A joint investigation says Russia-linked figures are preparing a case against the Baltic states at the International Court of Justice over alleged violations of ethnic Russians’ rights, with a Moscow law firm and alleged FSB-linked “historians” involved. Forest Deal: Latvia’s state forest manager LVM has bought nearly 5,000 hectares of productive forest in Latgale from Swedish owners for about €26.4m, taking over management of spruce, birch and pine land. EU Cyber Sanctions: The EU imposed sanctions on Russian military intelligence officers, hackers and companies over a yearslong cyber espionage and sabotage campaign targeting critical infrastructure across Europe. South China Sea Row: The US-led group of 14 countries, including Latvia, reaffirmed the 2016 South China Sea arbitration as final and legally binding, while China rejected it and summoned Japan’s envoy. Local Impact—Storms: Severe thunderstorms hit eastern Latvia, knocking out power for thousands and causing road disruptions. Border Support: Lithuania sent a second group of border guards to assist Latvia, focusing on curbing illegal migration from Belarus. Weather: Expect a warm, mostly sunny week in Latvia with only isolated showers early on.

South China Sea Diplomacy: The Philippines and 13 allies, including Latvia, reaffirmed on the 10th anniversary that the 2016 arbitration ruling is “final and legally binding,” rejecting China’s expansive maritime claims and warning against “destabilizing” actions; China Responds: Beijing hit back, saying the award is “null and void” and that it will defend its sovereignty and maritime rights; Storms in Latvia: Severe thunderstorms in eastern and southeastern Latvia damaged the power grid, toppling trees and leaving thousands without electricity, with outages peaking at about 9,300 customers before repairs reduced the number to around 2,400 by evening; Riga Tragedy: A fatal train accident in Riga caused the cancellation of a Riga–Dubulti service and is under police investigation; Culture & Film Funding: Latvia’s National Film Centre approved €250,000 for five minority coproductions, supporting projects across animation and feature films; Minority Coproduction Spotlight: Cinehill Film Festival 2026 named Montenegro its partner country for July 21–26 in Croatia.

South China Sea Ruling Reaffirmed: The US, UK and 12 other countries—including Latvia—marked the 10th anniversary of the 2016 Hague arbitration, saying China’s expansive South China Sea claims have “no legal basis” and that the award is “final, legally binding and definitive,” while the EU issued a separate “landmark” endorsement. Baltic-Russia Tensions: Latvia, Estonia and Lithuania lodged a joint protest in Moscow over Russian disinformation claims, stressing they have not opened their airspace for attacks on Russia and calling the allegations unfounded. Energy Grid Shift: Lithuania’s report highlights how the Baltics ended dependence on Russian and Belarusian electricity grids, fully syncing with the EU market after the Continental Europe Synchronous Area milestone. Latvia Road Safety: A deadly weekend on Latvian roads saw multiple crashes, including a fatal collision on the Tallinn highway involving Turkish citizens, plus other deaths in Iecava and Zvārtava parishes. Culture Jobs: Eurostat data puts Latvia at 4.8% of jobs in the cultural sector, matching Lithuania and trailing Estonia. Baltic Storage Deal: Futureal Energy Partners bought 45 MW/120 MWh of battery storage projects in Riga from Aretis Group, targeting operations in November.

Baltic-Russia Tensions: Estonia, Latvia and Lithuania have formally rejected Russian claims that they opened their airspace for attacks on Russia, saying the accusations are false and part of Moscow’s disinformation while drones and missiles are used in the war against Ukraine. Diplomatic Pushback: The Baltic states also summoned Russian envoys over alleged deportation plans targeting Russian speakers, stressing that rule of law protects residents regardless of ethnicity. EU Funding Update: The EU approved a revised recovery and resilience plan for Hungary worth up to €10bn, with payments tied to milestones; Latvia and other countries also saw approved amendments. Travel Rules Watch: The US continues visa-free entry under ESTA for citizens of 42 countries, including Latvia and Estonia, for up to 90 days; Canada likewise updated its 2026 entry requirements and eTA rules. Sports & Culture: Wimbledon doubles crowned Henry Patten and Harri Heliovaara as men’s champions; in Riga, GEN-E highlighted a student project in drink-spiking detection. Local Life: Latvia’s air and border security concerns remain in focus as officials warn about hybrid threats and staffing needs.

Baltic Security: Latvia, Estonia and Lithuania have summoned Russian diplomats in Moscow to reject fresh Kremlin claims about “mass deportations” and alleged Baltic airspace use for strikes on Russia, with the Baltic states stressing they follow the rule of law and that drone incidents stem from Russia’s war against Ukraine. NATO Air Policing: NATO is upgrading the Baltic air policing mission into a full air-defence role, authorizing fighter jets to destroy threatening objects without separate political sign-off, and granting Ämari Air Base official NATO operational status. Latvia Telecom Deal: Latvia’s government is in advanced talks with 23 potential investors about buying LMT and Tet shares from Telia, with binding offers expected after security checks. Latvia Economy: Latvia’s foreign trade deficit widened in May to €374.0m as imports rose faster than exports, while overall trade turnover grew year-on-year. EU Recovery Funds: The EU approved Hungary’s revised €10bn recovery plan and also backed targeted amendments to several countries’ plans, including Latvia. Sports & Culture (Riga): GEN-E in Riga saw a Cypriot student team place third with a “drink-spiking” testing lip gloss concept, while Latvia’s Jelena Ostapenko won Wimbledon mixed doubles with Marcelo Arevalo.