AGP Executive Report

Banking Deal: OTP Bank signed an agreement to acquire 100% of Luminor Holding, bringing a major Baltic banking consolidation step closer as regulators weigh in. Corporate Finance: Luminor also backed Latvian children’s furniture maker Hoppekids with €1.3m to buy Danish assets and shift production to Latvia, aiming to boost exports. AirBaltic Watch: Latvia’s PM says talks with three potential investors are ongoing for the ailing national carrier, while the state’s role may be reduced. Property & Leasing: Latio reports office demand is improving but power is shifting to tenants, with more energy-efficient space in Riga and room for negotiation. Consumer Protection: PTAC says consumer complaints are rising, with financial services and debt recovery complaints doubling year-on-year. Fraud & Security: Latvian TV highlights romantic scams draining nearly €100,000 from victims, while the Prosecution Office confirmed the dismissal of its administrative director after an internal review. Social Policy: The European Commission endorsed Latvia’s €617m Social Climate Plan, using carbon-pricing revenues to support vulnerable groups. Cross-Border Gambling: Latvia, Lithuania and Estonia are moving toward a shared self-exclusion register, reshaping online gambling compliance across the Baltics. Humanitarian Aid: Another convoy worth nearly €160,000 is set to depart Riga for Ukraine, funded via Ziedot.lv donations.

airBaltic Financing Talks: Latvia’s PM Andris Kulbergs says discussions with three potential investors are ongoing, while the carrier is set to seek short-term funding from bondholders on Aug 3 to avoid default and keep the Riga hub. Consumer Watch: PTAC reports a surge in consumer complaints this year, with air passenger rights and financial services/debt recovery driving the biggest increases. EU Social Policy: The European Commission endorsed Latvia’s €617m Social Climate Plan, using carbon pricing revenues to support a fair clean transition for vulnerable households and businesses. Housing Safety Gap: New builds in Latvia often lack bomb-shelter basements, as developers cite low-rent programme cost limits and residents resist rent hikes for shelters. Commercial Property: Latio says Riga’s office market is stabilising, but tenants now hold the upper hand thanks to ample Class A supply and more flexible leasing terms. Border Pressure: Latvia faces renewed Belarus-linked pressure on the eastern frontier, with 111 illegal-crossing attempts stopped on July 16 and 8,253 reported so far this year. Energy Security: Latvia is strengthening security at key energy infrastructure, including the Incukalns gas storage and hydropower sites, amid fears of Russian hybrid or sabotage actions. Digital Euro Pilot: The ECB selected 36 payment service providers for the digital euro pilot across 19 central banks, with Latvia among the participating ecosystems. SAF Logistics Deal: Allied Biofuels signed a logistics agreement with Pro Logistic Services to build export routes for SAF/e-SAF from Uzbekistan to Europe and the GCC, supporting a US$6.08bn presidential-decree-backed project.

airBaltic Rescue Talks: Latvia is negotiating with a “serious” strategic investor to keep state carrier airBaltic flying, with a key bondholder meeting set for August 3 to secure short-term funding and avoid default; Riga’s hub at the airport is a core condition. Panama Papers Fallout: Swedbank agreed to pay a $50m fine to New York regulators over alleged withholding of information tied to the 2016 Panama Papers probe, including issues around its Baltic disclosures. Latvia–Belarus Border Pressure: Rising attempted crossings from Belarus are pushing Latvia and neighbours back into a wider Schengen debate over security, solidarity and migrant rights, with 111 people stopped on 16 July and 8,253 reported this year. Energy Security: Latvia is boosting protection at critical energy infrastructure, including the Incukalns gas storage and major hydropower assets, amid intelligence about possible Russian hybrid or sabotage actions. EU Media Freedom: A European journalists’ group says the EU rule-of-law report underestimates the decline in press freedom and warns implementation of media protections is lagging. Real Wages Pressure: An OECD review finds eurozone residents lost 1.8% of purchasing power over five years as wages lagged inflation, hitting Italy hardest. Cormorant Culling Fight: Nine EU countries including Latvia are urging looser culling rules for overabundant cormorants, arguing the bird’s impact is both ecological and economic.

airBaltic Rescue Talks: Latvia is negotiating with a strategic investor for struggling state-controlled airBaltic to avoid default, with a key Riga hub condition and a bondholder financing meeting set for August 3. Energy Security: Prime Minister Andris Kulbergs says Latvia has boosted protection at critical energy sites, including the Incukalns gas storage and major hydropower infrastructure, amid fears of Russian hybrid or sabotage moves. Banking & Compliance: New York regulators fined Swedbank $50m over Panama Papers-linked failures to disclose information, including issues involving Baltic subsidiaries. EU Climate Policy: The European Commission proposed easing the pace of emissions cuts under the EU carbon market, giving industry “breathing space” during the transition. Agriculture Fraud: Latvia’s EPPO indicted a farmer over suspected EU subsidy fraud tied to robotic milking equipment, alleging the gear wasn’t installed or operational and that a fabricated video was used. Digital Skills for Women: Latvia’s Riga TechGirls Digital ABC for NGOs is being discussed with Fiji to expand women’s digital literacy, online safety, and access to digital finance. Wildlife & Fisheries: Latvia is among EU states pushing for looser cormorant culling rules after the bird’s rebound is blamed for major fish losses. EV Market Entry: Tesla will open in Latvia on August 21 with a pop-up store in Riga, completing its Baltic rollout.

airBaltic Rescue Talks: Latvia is negotiating with a “serious” strategic investor to keep state carrier airBaltic flying, with bondholder short-term funding due at an Aug 3 meeting and a key condition of protecting the Riga hub. Energy Security: Prime Minister Andris Kulbergs says Latvia has boosted protection at Inčukalns gas storage and major hydropower sites amid warnings of possible Russian hybrid or sabotage moves. Financial Crime Fallout: New York regulators fined Swedbank $50m over Panama Papers-related failures to disclose offshore links and Baltic subsidiary information to investigators. EU Wage Pressure: An OECD read shows eurozone real wages down 1.8% over five years, with Italy worst at -6.1%, as pay growth lagged inflation. Fisheries vs Wildlife: Latvia and other EU states are pushing Brussels to ease cormorant culling rules after the bird’s numbers rebounded, reigniting the “population control” fight. Agriculture Fraud Case: Latvia’s EPPO indicted a farmer over alleged robotic milking equipment subsidy fraud, including claims supported by a fabricated video. EV Market Move: Tesla will open in Latvia on Aug 21 with a pop-up at Riga’s Spice, completing its Baltic rollout.

airBaltic Financing Talks: Latvia’s government says it’s in talks with a “strategic investor” for struggling state-controlled airBaltic as the carrier seeks short-term bondholder funding on Aug 3, while the transport minister says the airline’s plan is no longer focused on global growth. Latvia Security at Energy Sites: Prime Minister Andris Kulbergs says Latvia has stepped up protection at the Inčukalns gas storage and key hydro and energy facilities amid fears of Russian sabotage and hybrid attacks, and has asked NATO for more air defence and troops plus faster anti-drone integration. EU Carbon Rules Shift: The European Commission proposes easing the pace of emissions cuts in the EU ETS to give industry “breathing space,” including a slower allowance reduction path and limited use of international credits. Swedbank Penalty: Swedbank agreed to pay a $50m fine to New York regulators over Panama Papers-linked anti-money laundering and disclosure failures. Latvian Subsidy Fraud Case: Latvia’s EPPO indicted a farmer over suspected €122,725 EU funding fraud tied to robotic milking equipment that allegedly wasn’t installed or operational, including a fabricated video. Agriculture Labour & Fraud Watch: Latvia’s employment data points to ongoing demand for agricultural workers and rising foreign staffing, while another case flags a robotic milking subsidy fraud probe. Tesla Arrives in Latvia: Tesla will open in Latvia on Aug 21 with a Riga pop-up store, completing its Baltic rollout. Cormorant Culling Debate: Latvia is among EU states pushing for looser culling rules for overabundant great cormorants amid fishery losses. Digital Euro Pilot: The ECB selected 36 payment service providers for the digital euro pilot starting next year, with major fintech names among participants.

airBaltic Financing Crunch: Latvia’s government is in talks with a strategic investor for struggling state-controlled airBaltic as the carrier seeks short-term bondholder funding ahead of an Aug 3 meeting, while the airline’s business plan is said to be shifting away from global growth targets. Energy Security: Prime Minister Andris Kulbergs says Latvia has tightened protection at the Inčukalns gas storage and key hydro sites due to fears of Russian sabotage and hybrid attacks, and is pushing NATO for more air defence and troops plus faster anti-drone integration. EU Rules & Labour Mobility: The European Commission has launched infringement action against 17 member states, including Latvia, over incomplete transposition of the revised single permit rules that let non-EU workers change jobs under conditions. Subsidy Fraud Case: Latvia’s EPPO has indicted a farmer over alleged €122,725 EU funding fraud for robotic milking equipment, claiming the hardware was not installed or operational and that a fabricated video was submitted. Defence Industry Link: Canada’s nearly $2B deal to buy 190 made-in-Canada armoured combat support vehicles notes these platforms are already deployed with NATO units in Latvia. Retail & Markets: Telia will stop terrestrial TV services from Jan 1, 2027, and Tesla has opened in Latvia with a Riga pop-up store slated for Aug 21. Macroeconomic Outlook: Latvia’s central bank published updated macro projections, citing weaker external demand from geopolitical uncertainty and higher energy prices, while saying financing conditions remain favourable.

Energy Security: Latvia has boosted protection at the Inčukalns underground gas storage and a hydroelectric dam upstream from Riga after intelligence pointed to potential Russian provocations, with PM Andris Kulbergs telling Reuters he asked NATO for more air defence and allied troops and for faster integration of a Latvian anti-drone system. EU Migration Rules: The European Commission has launched infringement action against 17 member states, including Latvia, for incomplete transposition of the revised Single Permit Directive, which is meant to speed up residence-and-work approvals for non-EU workers and allow job changes under conditions. Central Banking Outlook: Latvijas banka published its latest Macroeconomic Projections Report, warning that geopolitical uncertainty and higher energy prices are weakening external demand and export prospects, while noting financing conditions in Latvia remain favourable in banking and capital markets. Fraud Case: The EPPO in Riga has filed a case against a farmer accused of aggravated fraud over EU subsidies for robotic milking equipment, alleging the hardware was not properly installed or operational and that a fabricated video was used to claim reimbursement. Retail Fuel Supply: Stores have introduced purchase limits on fuel pellets as demand surged, but the Latvian Biomass Association says the market should stabilise within a month. Labour Market Anxiety: A Luminor survey finds over half of Latvians feel financially insecure about retirement, with women reporting higher insecurity than men. Defence Innovation Funding: EU lawmakers agreed a new €115m AGILE programme to fund fast defence innovation by SMEs, with quicker grants, testing and certification access. Business & Finance: Swedbank faces a $50m penalty in New York tied to the Panama Papers probe after regulators said it withheld key information. Tech/Connectivity: SpaceX updated Starlink roaming rules by grouping countries into shared regions, changing how international travel caps apply for users. Aviation Stress: Reuters reports rising fuel costs from the Iran-related energy shock are pushing some smaller European airlines toward restructuring or bankruptcy, with airBaltic also seeking short-term financing.

Retirement Worries: Luminor survey finds 52% of Latvians lack confidence in retirement finances, with women reporting higher insecurity and the state pension set to replace only about half of pre-retirement income. Energy Security: PM Andris Kulbergs says Latvia has boosted security at the Incukalns gas storage and a hydroelectric dam after intelligence pointed to a Russian hybrid threat, urging faster NATO air defence and anti-drone integration. Banking Oversight: New York regulators fined Swedbank $50m over Panama Papers-related information withheld from investigators, highlighting stricter compliance expectations for financial institutions. airBaltic Funding Watch: Latvia’s airBaltic is seeking short-term financing from bondholders, with a bondholders’ meeting set for Aug 3, as it works through a capital structure review. Port Decarbonisation: Port of Riga’s technical services unit LVR Flote joined a Baltic PILOTech project to cut CO2 from pilot boats using low-emission tech and digital monitoring. Young Farmers Get More Credit: Under LANDE’s EIF-backed guarantee programme, nearly half of loans in Latvia and Lithuania went to farmers under 40, aligning with generational renewal goals. Local Governance Scrutiny: State Audit Office says Ogre district procurement and project implementation fell short, with major gaps in delivering infrastructure and quality-of-life projects. Business Space Expansion: NORDSPACE secured EUR 1.2m from Signet Bank for a second phase of smart storage facilities in Riga’s Jūrkalnes Street. Tourism Promotion: Valmiera district released a free English digital active tourism booklet for hiking, cycling and boating routes.

airBaltic Financing Crunch: Latvia’s state-backed airline is seeking short-term “interim financing” from bondholders at an Aug 3 meeting to avoid default risk as debt pressure mounts. EU Legal Pressure: The European Commission has launched infringement proceedings against Latvia and 23 other countries over incomplete transposition of the internal market emergency rules (IMERA package), giving member states two months to respond. Riga Infrastructure Update: Construction firm BERERIX has completed major facade and glazed-roof works on the southern section of the new Riga Central Station, with full building completion targeted by end-August 2026. Business Expansion in Riga: NORDSPACE secured EUR 1.2m from Signet Bank for a second phase of smart storage facilities at Jūrkalnes Street 62, adding new space for work and entrepreneurship. Local Economy & Policy: Latvia’s National Alliance proposes merging three ministries into a new Ministry of the Economy to speed decisions and reduce overlapping responsibilities. Regional Security Angle: Lithuania and Latvia are warning of possible Russian targeted sabotage against critical infrastructure, while Russia dismisses the claims as “scare stories.”

airBaltic Financing Crunch: Latvia’s state-backed airline is seeking short-term “interim financing” from bondholders at an Aug. 3 meeting as debt risks mount and default fears rise. EU Legal Pressure: The European Commission has launched infringement proceedings against Latvia and 23 other countries for not fully transposing an internal market emergency directive, giving member states two months to respond. Digital Euro Pilot: The ECB has selected 36 payment service providers for the digital euro pilot starting in the second half of 2027, with Latvia among the ecosystem watching closely as banks and non-banks prepare. Riga Infrastructure Disruption: Vanšu Bridge renovation could mean a full closure to private cars, with “park and ride” and extra public transport routes being considered to ease peak-hour congestion. Local Business Expansion: LIDO founder Gunārs Ķirsons is investing about EUR 4.5m to launch the DABA fast-casual restaurant concept in Riga, with two sites planned for late July and November. Sports Funding Fight: Nine EU countries including Latvia are urging cuts to funding for sports bodies such as the IOC and World Aquatics over the return of Russian and Belarusian athletes. Defense & Drones Backdrop: Latvia is also in the NATO security narrative as Baltic leaders warn of possible Russian targeted sabotage on critical infrastructure, while Europe’s drone spending accelerates.

Digital Euro Push: The ECB has selected 36 payment service providers across 19 countries to take part in the digital euro pilot, due to start in the second half of 2027 and run for 12 months, with banks and non-bank firms including Revolut and Deutsche Bank among the chosen. Telecom Deal Scrutiny: Latvia’s PM Andris Kulbergs says the proposed buyout of shares in LMT and Tet is still not “ready,” demanding an “easy-to-understand explanation” and more assurances on transparency and national-interest risks. Dual-Use Exports: Rēzekne will host the second Latvian Dual-Use Export Forum on 7 September, aiming to connect over 170 industry players across Europe and beyond in civilian and defence tech. Food & Exports: Latvia’s berry exports are gaining momentum, with frozen blackcurrants hitting a record value above €860,000 last year, led by demand from the Netherlands, Austria, Germany and Italy. Regional Business & Investment: Digmatix, a Latvia-based Microsoft Business Applications provider, is entering Romania via the acquisition of Elian Solutions. Policy on Belarus/Russia Goods: Latvia plans to ban imports of certain books, toys and other items produced in Belarus and Russia, while allowing transit through Latvia. Sports Funding Pressure: Nine EU states, including Latvia, are urging the EU to cut funding to sports bodies such as the IOC over the return of Russian and Belarusian athletes.

Digital Euro Rollout: The ECB has selected 36 payment service providers for the digital euro pilot, set to start in the second half of 2027 for 12 months, with Latvia included among the participating euro-area firms. EU Sports Funding Pressure: Nine EU countries, including Latvia, are urging the European Commission to cut EU funding for sports bodies such as the IOC after Russia and Belarus athletes were readmitted. Latvia Telecom Deal Watch: Latvia is in talks with 23 potential investors as it prepares the landmark acquisition of Telia’s stakes in LMT and Tet, with due diligence and security screening under way. Food Compliance: Latvia’s Food and Veterinary Service stepped up checks after cases of strawberries being marketed as locally grown during the season, with fines possible for false origin claims. Rail Safety Tragedy: The remains of a Latvian Railways employee missing after falling into the Daugava were found on Zaķusala island; the State Labour Inspectorate is investigating workplace safety. Defense Cooperation: Estonia and Ukraine have begun implementing a drone deal, with knowledge-sharing and joint production elements highlighted. Regional Security Drills: Sea Breeze naval exercise kicked off in the UK with over 20 countries, including Latvia, focusing on mine countermeasure operations.

Latvia Telecom Deal: Latvia is lining up 23 investors for a landmark acquisition of Telia’s stakes in LMT and Tet, with due diligence and security screening under way and valuations being finalised before binding offers. Digital Payments: The ECB has selected 36 payment service providers for the digital euro pilot, due to start in the second half of 2027 for 12 months, to test technical operations and refine the user experience for citizens and businesses. Riga Airport Governance: Normunds Feierbergs has been confirmed to the board of RIX Riga International Airport, taking responsibility for strategic finance and information technology management. Energy Efficiency in Property: Origo says its AI-based building management system has cut energy-related costs by over €132,000 and reduced energy use and CO₂ emissions. Defense Budget Pressure: Latvia’s Finance Ministry estimates extra funding needs to reach 5% of GDP defence spending, projecting rising annual gaps from 2027 through 2030. Cyber & Sanctions: The EU and UK imposed sanctions tied to a long-running Russian cyberespionage and sabotage campaign targeting critical infrastructure across Europe. Tourism Tax Debate: Pärnu and local authorities back a tourist tax, while Tallinn argues it could hurt tourism. Sustainability Watch: Textile waste is flagged as a growing problem in Latvia, with recycling still lagging behind fast-fashion consumption. Crypto Compliance: A MiCA-licensed exchange survey says many EU users don’t know if their exchange is compliant after the July 1 deadline. Geopolitics: China rejects a 14-country reaffirmation of the 2016 South China Sea arbitration ruling, while the EU calls for a legally binding ASEAN-China code of conduct.

EU Sanctions & Cybersecurity: The EU and UK imposed fresh sanctions on Russian military intelligence officers, hackers and entities tied to a yearslong cyberespionage and sabotage campaign targeting critical infrastructure across Europe. Latvia Security & Governance: Latvia’s Culture Ministry suspended EU funding for a women’s NGO cooperation project after an audit flagged unclear participant selection, non-transparent expenses and weak training documentation. Defense Budget Pressure: Latvia’s Finance Ministry says reaching 5% of GDP defense spending will require major new budget money—rising from €92.1m (2027) to over €1.12bn by 2030—warning that current tools could worsen inequality. Cross-Border Sanctions Evasion: A Lithuanian investigation alleges Starlink terminals and drone-related engines were shipped to Russia via the Latvian border using false declarations. Business & Markets: Paybis reports that 68.6% of European crypto users don’t know if their exchange is MiCA-compliant after the 1 July deadline. Energy & Assets: Latvia’s state forest manager LVM bought nearly 5,000 hectares in Latgale from Swedish owners for €26.385m. Aviation & Infrastructure: RIX Riga Airport confirmed Normunds Feierbergs to its board for strategic finance and IT management. Trade & Networking: Latvia hosts the 12th meeting of honorary consuls, with a business networking event bringing 90+ consuls from 44 countries to Riga. Startup Spotlight: CarrierTrust launched an EU-focused reputation network for transport and logistics firms to assess partners before cooperation.

Forest & State Assets: Latvia’s state forestry firm LVM has bought almost 5,000 hectares of forest land in Pasienes parish, Ludza region, from Swedish owners for just over €26m, adding about 4,800 hectares of forest to strengthen long-term wood supply. EU Regulation Watch: New packaging and packaging-waste rules take effect on Aug 12, expanding what counts as packaging (including tea bags and mascara brushes) and tightening requirements on recycling, reuse and “substances of concern.” Energy & Weather Disruption: Severe thunderstorms hit eastern and southeastern Latvia, damaging the power grid and leaving up to 9,300 customers without electricity, with about 2,400 still out by evening as crews restore lines. Geopolitics With a Baltic Link: Latvia is among 14 countries and the EU reaffirming the 2016 South China Sea arbitration ruling as final and legally binding, while China rejects it and summons Japan’s envoy. Defence Finance: Romania has joined the founding group behind Canada-led plans for a Defence, Security and Resilience Bank, announced alongside NATO Summit talks that also include Latvia.