Latvia (Kartalis)

Thanos Kartalis
-Latvia is a country in the Baltic region of Northern Europe, one of the three Baltic states. It
is bordered by Estonia to the north, Lithuania to the south, Russia to the east, and Belarus to
the southeast
-Capital city: Riga
-Population: 2.001.468
-Population as % of total EU population: 0.4 % (2014)
-GDP: € 24,060 billion (2014)
-Political system: parliamentary republic
-EU member country since: 1 May 2004
-Seats in the European Parliament: 8
-Currency: Euro. Member of the Eurozone since 1 January 2014
-Schengen area member since 21 December 2007
-Presidency of the Council: Latvia held the presidency of the council of the EU for the first
time in 2015
-Member also of NATO, Council of Europe, IMF,OSCE
-Latvians share the same roots with the other Baltic states (Estonia, Lithuania). They are
descendants of the proto-Balts, tribes dating back to 3000 BC
-In the medieval years, Latvia was conquered by Germanic tribes
-During the Reformation Years Latvia was under Polish-Lithuanian rule. It was given to the
Swedish Empire after the Polish-Swedish War in the 16th century
-It became part of the Russian Empire in 1710 after the Great Northern War
-Gained independence in 1918 after the 1st World War
-In 1940 Latvia was occupied by the Soviet Union after the signing of the MolotovRibbentrop Pact between Nazi Germany and the USSR in 1939
-In 1941 German troops attacked the Soviet troops in Riga and occupied the country
-The USSR re-occupied Latvia in 1944 and established the Soviet Socialist Republic of Latvia
-Latvia, finally, gained independence in 1991 after the fall of the USSR
Latvia’s economic transition
-After gaining independence in 1991 Latvia’s state-controlled economy broke down, GDP
loss in 2 years reached 49% and inflation was sky-high
-The whole transition was extremely ‘painful’ for the latvian economy but in the end fruitful
and efficient
-In 1992 Latvia broke out the ruble zone and followed an IMF program accompanied by huge
international financial support
-Adoption of the 1922 constitution, which was amended. Establishment of legislation and
international institutions in order to create a healthy democracy and secure the
liberalization of the economy,including prices and trade, macroeconomic stabilization and
-Latvia’s economy started taking off in 1997 when the GDP growth rate reached 8.3%.From
that point on, Latvia went through a decade of unstoppable growth
Ukraine Crisis
-Latvia always considers itself, since its independence in 1991, a western country proven by
its accession in NATO, the EU and other international organizations. However, its policy
towards Russia was always to promote a minimum cooperation based on ‘mutual interests’
in order to keep a balance in the region
-Since the Ukraine crisis broke out, Russia is a threat in the Latvian’s eyes, given the
country’s geographical position and history. Furthermore, the high percentage of ethnic
Russians who live in Latvia makes the country extremely important for Russia
-As a result, during last years’ election, the need to keep the Russian Harmony party out of
the government was more evident than ever. A completely unbalanced government was
formed just to keep the Russians out of the coalition
-Furthermore, the government agreed with the sanctions imposed by the EU on Russia, and
constantly pressures NATO to increase spending in the Baltic region
Latvia in the EU
A. Reasons for accession: 1.Security reasons- geographical proximity to Russia (reason for
NATO accession also)
2. Economic reasons- Attraction to EU funding (aiming to improve infrastructure and
transports)-trying to benefit from the Single Market-prosperity and stability
B. Road to accession: 1. On the 1st of January, 1995 Latvia signed an association
agreement with the EU and 9 months later submitted its accession
2. Latvia was recognized as a candidate for EU accession during the Luxembourg Council in
1997 along with Lithuania, Slovakia, Romania, Malta and Bulgaria
3. Started bilateral negotiations with the EU in 2000
4. Became a member of the European family in 2004 during the 5th enlargement along with
11 other states, after a referendum held in 2003. 67,5% of the voters voted in favor of their
country’s accession to the EU
5. In 2007, Latvia signed the Schengen agreement and acceded the Eurozone in 2014
C. Economic crisis: Reasons- EU accession and access to cheaper funds from foreign banksthis triggered a “bubbly” boom
How it affected Latvia? – Crisis of 2 kinds: Balance-of-payments crisis and banking crisis-The
crisis became profound with the burst of the real estate ‘bubble’. High inflation, loss of
competitiveness, decrease in exports, 5,7% of the population migrated (even though other
important factors contributed as well), , GDP loss of almost 25% between 2007-2009,
increase of the unemployment rate (20% in 2010)
Latvian Policy to overcome the crisis – Fiscal austerity, internal devaluation (fixed exchange
rate), the economy is still recovering, although it has showed tremendous improvement.
Latvia’s recovery is a controversial issue, used constantly as an example both by those in
favor and against austerity
D. Importance of accession to the Eurozone: It solidified Latvia’s place in the Euroatlantic
community. It also meant that the economy had started to recover
Russian Minority
-26% of Latvia’s population are ethnic Russian. Large amounts of ethnic Russians can be
found in all 3 Baltic states.
- Latvia adopts the jus sanguinis («the right of blood») principle , according to which,
in order to be granted citizenship you have to be a child of Latvian citizens. This
means, a large portion of the population cannot vote, including many Russians.
Although measures have been taken in this direction (mainly due to EU pressure) there
are still almost 200.000 people that are stateless.
- The state of Latvia has frequently suppressed the Russian minority and has violated their
rights. This was a very important issue during the accession negotiations, given that the
respect for minority rights is one of the main conditions in the Copenhagen criteria.
-Therefore. after the signing of the Schengen agreement and the arrival of the economic
crisis with the burst of the real-estate bubble, minority groups (mostly Russians) fled the
-During the accession referendum most Russian supported the accession believing that it
would improve their living standard and protect their rights
-The party that represents the Russian minority in parliament is the Harmony party
-Many coalition governments have been formed to keep the Russian party out , mainly
because of its ties with Russia (including the current governing coalition)
Eurobarometer : 83 Spring 2015
-59% of Latvians feel optimistic about the future of the EU
-38% of Latvians believe that the most important issue for the EU at the moment is
-78% are in favor of the Eurozone
-68% of Latvians feel like an EU citizen
-49% support the idea of further enlargement of the EU and only 36% support a federalist
-72% want a common foreign policy and 81% a common defense policy
Internal political system
-The are 6 parties in parliament (Saeima) after the elections held in the 8th of October 2014
-The Harmony Party (the Russian party which came 1st and took 24 seats), the Unity Party,
the Union of Greens and Farmers, the National Alliance, the For Latvia from the Heart and
the Latvian Association of Regions
- The coalition government is formed by the Unity party, the Union of Greens and
Farmers and the National Alliance. The Unity party is the most popular with 23 seats,
a liberal pro-european party. The Union of Greens and Farmers is a green-agrarian
centre-right party with 21 seats. Finally, the National Alliance is a nationalist, antiglobalist and anti-immigrant party that occupies 17 seats
Euroscepticism in Latvia
-There are two soft eurosceptic parties in Latvia that both part of the coalition
government along with the Unity Party. The Union of Greens and Farmers and the the
National Alliance, officially the National Alliance "All For Latvia!" – "For Fatherland and
- The Union of Greens and Farmers occupies one seat in the European parliament and
belongs to the alliance of Liberals and Democrats. They were in favor of Latvia’s
accession to the EU but against Latvia’s entering the Eurozone
- The National Alliance belongs to the European Reformists & Conservatives party. It has
one seat in the European parliament