This week, Baltic candidates for EU commissioners were named, and the IMF backed down under pressure on its planned Russia mission. The Estonian government agreed on next year’s draft budget, pressed the Orthodox church to cut ties with Moscow, and voted to condemn Israel. Latvia’s president toured the US, the transport minister survived yet again, and a Russian drone crash continued to raise questions. Lithuania’s central bank upped its GDP forecast, the tit-for-tat between the president and the foreign minister continued, and the parliament kept the civil union bill alive.
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BALTIC
Baltic: Kallas, Dombrovskis, Kubilius named EU commissioners
European Commission president Ursula von der Leyen has presented her list of candidates for EU commissioners. The list includes Estonia’s former PM, Kaja Kallas, for EU foreign policy chief, Latvia’s Valdis Dombrovskis for EU commissioner for economy and productivity, and Lithuania’s former PM, MEP Andrius Kubilius, for EU defence and space commissioner.
Baltic: Finance ministers protest IMF’s planned mission to Russia
The finance ministers of the eight Nordic and Baltic countries as well as Poland have protested against the IMF’s plan to resume missions to Russia. The nine EU ministers warned that the decision to resume dialogue with an aggressor state would undermine trust in the IMF and damage its reputation.
Baltic: EU affairs committees warn of migration, Russian LNG
The Baltic and Polish parliamentary committees of European affairs urged the EU to strengthen Poland’s border amid a new surge in migration. Also, the committees called on the EU to reduce its growing dependence on LNG from Russia.
Baltic: EU affairs committees urge to stop LNG imports from Russia
The chairs of the EU affairs committees of the parliaments of the Baltic States and Poland demanded that the EU stop importing LNG from Russia as soon as possible. The committee chairs called for strengthening relationships with reliable energy suppliers in other regions instead.
Baltic: Nearly 160,000 Ukrainians granted temporary protection
The Baltic States have granted temporary protection to altogether 158,985 Ukrainian nationals fleeing the war by the end of July 2024, Eurostat reports. The share of Ukrainian refugees in relation to the population in the Baltic countries is among the highest in the world.
Baltic: Material, social deprivation lowest in Estonia in 2023: Eurostat
The level of material and social deprivation in Estonia was among the lowest in the EU in 2023, according to Eurostat data. The overall rate of severe material and social deprivation was 2.5% of the population in Estonia, 6.1% in Lithuania, and 6.2% in Latvia.
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ESTONIA
Estonia: Government agrees on tax hikes, spending cuts
The Estonian government has agreed on tax changes and spending cuts. The government will raise the corporate profit tax, personal income tax, and VAT to increase spending on defence. At the same time, the government will cut public sector spending by around EUR 1bn over three years.
Estonia: Government agrees on need-based social benefits in 2028
The Estonian government has agreed on switching to need-based social benefits in 2028, Education Minister Kristina Kallas announced. She argued that the state and taxpayers could no longer afford distributing equal support to everyone.
Estonia: State to fund apartment building renovation for EUR 500mn
The Estonian government has allocated EUR 185mn of EU funds for renovating old apartment buildings. The state plans to provide altogether almost EUR 500mn of support for the renovations over four years.
Estonia: Government to raise EUR 2.5bn for defence by end of 2028
The Estonian government expects to raise nearly EUR 2.5bn of new tax revenue to finance increased defence spending by the end of 2028, the Ministry of Finance estimated. At the same time, the government plans to cut budget spending by EUR 1bn over four years, PM Kristen Michal said.
Estonia: New military base opened near Võru
Estonia has opened a new military base near the southern Estonian town of Võru. The Reedo army base can accommodate up to 1,000 Estonian and NATO military personnel.
Estonia: Court stops extradition of sanctions violator to US
A court in Estonia has stopped the extradition of an Estonian citizen to the US due to concerns that detention conditions in US prisons may not be humane. US authorities have charged the man for evading sanctions by supplying prohibited US-made electronics to Russia.
Estonia: State tells Orthodox church to sever all ties with Moscow
Estonia’s Ministry of Interior has told the Estonian Orthodox Church of the Moscow Patriarchate to sever all ties with the Russian Orthodox Church. The Estonian parliament has declared the latter an institution supporting Russia’s military aggression.
Estonia: Estonia’s UN vote on Palestine raises questions
Estonia has voted in favour of a UN resolution urging Israel to end the occupation of Palestinian territories. The Foreign Ministry has justified Estonia’s UN votes on Palestine with the need to ensure wider international condemnation of Russia’s aggression in Ukraine.
Estonia: Central bank to stop minting one, two-cent coins
The Bank of Estonia will stop ordering one and two-cent coins as of 2025. Under new rules, cash transactions will be rounded to the nearest five cents. The central bank will send the discarded coins to other EU countries.
Estonia: Nordica may lose largest partner SAS
Estonia’s national air carrier, Nordica, may lose its largest client, SAS, which has signed a long-term partnership deal with Sweden’s BRA. Estonian aviation experts expect Nordica to lose its leasing contract with SAS.
Estonia: Government to allocate EUR 2mn for Tartu-Riga train
The Estonian government will allocate EUR 2mn for state-owned rail operator Elron to open a regular passenger train connection between Tartu and Riga. The support would allow Elron to open the new passenger service in spring 2025.
Estonia: Eesti Post plans to raise postal fees by third in 2025
Estonia’s postal services provider, Eesti Post (Omniva), plans to raise the price of universal postal services by a third in 2025. The company would still continue providing the services at a loss, however. Planned legislative changes would allow Eesti Post to introduce cost-based pricing in 2026.
Estonia: Tallinn plans to invest EUR 100mn in public transport
Estonia’s Tallinn city government has approved a new budget strategy, under which the city plans to invest EUR 100mn in public transport in 2025-2028. The strategy includes a major plan to modernise the city centre.
Estonia: 46% of entrepreneurs view economic climate negatively: poll
Nearly half of small and medium-sized enterprises in Estonia saw the country’s economic climate negatively in August 2024, according to a new poll. Nevertheless, 29% of local entrepreneurs intend to invest in the next 12 months, the survey showed.
Estonia: UN report notes success in cyber security
Estonia ranks among the world’s top nations in cyber security, according to the Global Cybersecurity Index of the UN’s International Telecommunication Union. The report pointed to Estonia’s robust cyber security regulation, effective organisational structures, investments in security technology, and efforts to raise security awareness.
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LATVIA
Latvia: President Rinkevics to pay lengthy visit to US
President Edgars Rinkevics of Latvia will pay a lengthy visit to the US on 17-27 September 2024. He will lead a Latvian trade delegation to California and speak at the UN General Assembly in New York.
Latvia: Largest ever Latvian trade mission visiting the US
More than 60 companies from Latvia are taking part in a large trade mission to the US led by President Edgars Rinkevics. Economy Minister Viktors Valainis said that the mission was the largest ever Latvian business delegation to the US.
Latvia: Coalition government remains stable: PM
Latvia’s three-party coalition government remains stable, PM Evika Silina assured. However, the PM implied that she would not hesitate to sack ministers if needed. Silina’s government has now been in office for a full year.
Latvia: Transport Minister survives third no confidence vote
The Latvian parliament has rejected a third motion of no confidence submitted by the opposition against Transport Minister Kaspars Briskens. The opposition’s criticism was related to problems at state-owned postal operator Latvijas Pasts, national air carrier airBaltic, passenger train operator Vivi, and the Rail Baltica railway project.
Latvia: airBaltic may gain strategic investor before or after IPO: CEO
Latvia’s national air carrier, airBaltic, may gain a new strategic investor either before or after the company’s planned IPO, according to CEO Martin Gauss. The company expects to announce the IPO in H2/2024 or in 2025. The goal is to raise EUR 300mn on the stock exchange.
Latvia: Hospitals unlikely to receive requested funding in 2025
The Latvian government is unlikely to satisfy the Health Ministry’s request for EUR 153mn of additional funding for hospitals in the 2025 state budget. The government has listed external and internal security as the only budget priorities.
Latvia: People aged over 40 may be allowed to join army
The Latvian government plans to allow soldiers and internal affairs officers to continue in service after retirement. Also, the government will allow people aged over 40 years to join the military or law enforcement. The government says the changes are due to the shortage of staff.
Latvia: Russian drone crash raises concerns about air defence
The crash of a Russian attack drone in eastern Latvia has raised concerns about the ability of Baltic air defence systems to protect civilians from unexpected aerial threats. Latvia’s Defence Ministry has pledged a thorough investigation and has initiated consultations with NATO allies.
Latvia: Telegram, TikTok pose risk to national security
The Russian and Chinese social media networks, Telegram and TikTok, are being widely used to spread content that poses risks to Latvia’s national security, the State Security Service (VDD) said. However, any decision to ban the platforms in Latvia should be made politically and preferably by all three Baltic States or the EU as a whole, VDD asserted.
Latvia: Russian education certificates soon not recognised
The Latvian parliament is discussing proposed amendments that would stop recognising Russian education certificates obtained after Russia launched its full-scale invasion of Ukraine. Latvia’s State Security Service (VDD) has warned that studying in Russia entails national security risks.
Latvia: Ukraine asks for ban on town twinning with Russia, Belarus
Ukraine’s ambassador to Latvia, Anatolii Kutsevol, has asked the Latvian parliament to pass a law to ban twin town agreements between Latvian municipalities and local governments in Russia and Belarus. He argued that such forms of cooperation were “reprehensible and dangerous.”
Latvia: Tax authority to check construction sector wages
Latvia’s State Revenue Service (VID) will contact 260 construction companies that are paying unusually low wages. VID will also ask more than 70,000 private persons to declare their income. The aim is to ascertain whether their employers are paying unreported wages.
Latvia: Big banks obliged to improve customer service in regions
The Latvian parliament has passed amendments mandating big banks to provide customer service and to maintain ATMs outside of big cities as of 1 January 2026. Also, the parliament passed amendments removing Russian as a language option on all ATMs as of 30 January 2025.
Latvia: Keep VAT on fruit, berries, vegetables at 12%: minister
The Latvian government should keep the VAT rate on locally grown fresh fruit, berries, and vegetables reduced at 12% in the coming years as well, Agriculture Minister Armands Krauze stated. Moreover, he argued that the lower rate should be applied to food products more widely.
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LITHUANIA
Lithuania: Central bank raises GDP growth forecast for 2024
The Bank of Lithuania expects the country’s GDP to grow by 2.2% in 2024, by 3.1% in 2025, and by 3.3% in 2026. Annual inflation will reach 1.0% in 2024 and rise to 2.5% in 2025 and 2.6% in 2026. Unemployment will rise to 7.4% in 2024 and fall to 7.1% in 2025 and to 6.9% in 2026.
Lithuania: Government asks EU for EUR 463mn of RRF funds
Lithuania has asked the European Commission to disburse EUR 463mn from the EU’s Recovery and Resilience Facility. This is Lithuania’s third payment request under the facility.
Lithuania: Minister welcomes IMF decision to postpone Russia mission
Lithuanian Finance Minister Gintare Skaiste welcomed the IMF’s decision to postpone its planned mission to Russia indefinitely. Skaiste noted that it would have seemed “schizophrenic” for the IMF to support Ukraine while at the same time advising Russia on how to manage its war economy.
Lithuania: Defence Minister calls for raising defence budget to 4% of GDP
Lithuania should aim to raise its defence spending to 4% of GDP, Defence Minister Laurynas Kasciunas stated. Earlier, President Gitanas Nauseda urged to spend at least 3.5% of GDP on national defence. Lithuania’s defence budget will reach 3.2% of GDP in 2024.
Lithuania: Defence budget to stay at 3% of GDP in 2025: Finance Minister
The Lithuanian government plans to allocate 3% of GDP to defence in the 2025 draft budget, Finance Minister Gintare Skaiste announced. Lithuania’s defence spending will reach 3.2% of GDP in 2024, which is the fourth-largest share among NATO member states.
Lithuania: President stresses continuous US troop presence
Lithuania is seeking continuous presence of US troops in the country, regardless of the outcome of the US presidential election, President Gitanas Nauseda stated. Also, he urged to accelerate the purchase of US weapons.
Lithuania: President finally asks to revoke treaties with Russia, Belarus
Lithuanian President Gitanas Nauseda has finally asked the parliament to revoke three treaties with Russia and Belarus on economic cooperation. Earlier, critics suggested that Nauseda’s delay in denouncing the treaties was related to the purported influence of Belarusian fertiliser business.
Lithuania: President to recommend next minister audit Foreign Ministry
Lithuanian President Gitanas Nauseda said that he would recommend that the next minister conduct an audit at the Foreign Ministry. He implied that there may have been improprieties in recent appointments at the ministry. Foreign Minister Gabrielius Landsbergis denied the allegations.
Lithuania: President proposes new ministry for regional policy
Lithuanian President Gitanas Nauseda has proposed establishing a new ministry responsible for regional policy. He argued that ministries now often failed to take into account the needs of local communities.
Lithuania: Parliament keeps civil union bill on agenda
The Lithuanian parliament has voted to keep a civil union bill to recognise same-sex partnerships on its autumn agenda. MPs initially supported the bill in spring 2023, but removed it from the spring agenda in March 2024. The bill needs a second vote to become law.
Lithuania: Lawyer sentenced to prison for spying for Belarus
A court in Lithuania has found a Lithuanian lawyer guilty of spying for Belarus and sentenced him to nine years in prison. The lawyer had spied on the exiled Belarusian opposition in Lithuania and passed on the information to a Belarusian journalist working for Belarusian intelligence.
Lithuania: YouTube bans Belarusian channels after Lithuanian request
Google has removed 18 Belarusian radio and TV channels from YouTube after a request from the Radio and Television Commission of Lithuania. The accounts were directly linked to the Belarusian state broadcaster, Belteleradiocompany, which is under EU sanctions.
Lithuania: Energy Minister confirms interest in SMR technology
Lithuania is interested in the possible use of next-generation small modular reactor (SMR) nuclear technology, Energy Minister Dainius Kreivys announced. Lithuania aims to produce all its electricity domestically within five years.
Lithuania: Vilnius Airport completes new departure terminal
Lithuania’s Vilnius International Airport has completed the construction of a new departure terminal. The airport will open the new terminal for passengers in February 2025. The airport will then be able to handle two times more passengers than at present.
Lithuania: Omniva opens new logistics centre near Kaunas
Estonian postal services provider Omniva has opened a new logistics centre near Kaunas in Lithuania. The facility was the group’s largest investment to date. The logistics centre can sort around 300,000 parcels per day.
Lithuania: Pon.Bike opens bicycle factory in Kedainiai
The world’s largest bicycle manufacturer, Dutch-based Pon.Bike, has opened a new production facility in Kedainiai in central Lithuania. The factory will produce up to 450,000 bicycles per year, employing around 600 people.
Lithuania: Maxima Group’s sales up nearly 5% in H1/2024
Lithuanian supermarket operator Maxima Group reported revenue totalling EUR 3bn in H1/2024, which was up 4.7% on year. Like-for-like retail sales rose by 2.2%. The group has stores in all three Baltic States, Poland, and Bulgaria.
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