AGP Executive Report

Latvia-Germany Business: A LIAA-led trade mission in Berlin brought together 54 Latvian firms and partners, targeting investment in energy, defence technologies, autonomous mobility and space; Latvia’s economy ministry says prior work already produced concrete projects worth over EUR 600m. Life Sciences Push: Another LIAA delegation met German medical tech and biotech players in Berlin to expand cooperation in pharmaceuticals, medical technologies, digital health and clinical research, with Latvia pointing to EUR 44.3m in pharma exports to Germany in 2025. Defence Industry Links: Latvia’s defence and dual-use companies also showcased supply opportunities to German industry and the defence ministry, aiming to plug into German and European supply chains for unmanned systems and components. Security & Air Defence Warning: Latvia’s president Edgars Rinkēvičs says Europe and NATO are falling behind in drone and aerial warfare; he warns many allies may struggle to cope with a Russian missile strike and that preparations could become outdated within months. NATO Missile Supply: The US says it’s working with allies to find available Patriot missiles for Ukraine and to expand manufacturing capacity in the US and Europe. airBaltic/Travel Cost Pressure: Global airline bankruptcies are linked to fuel prices up sharply, with Latvia’s airBaltic cited among carriers under strain.

Latvia–Germany Business: Latvia’s LIAA trade mission in Berlin brought life sciences and digital health firms to meet German medical tech and biotech players, aiming for joint product development, clinical research and deeper access to the German market. Latvia–Germany Defence Industry: A parallel LIAA mission focused on defence and dual-use tech, with Latvian companies pitching unmanned systems, military vehicles and electronics to German industry and the Federal Ministry of Defence, targeting supply-chain roles and co-production. Security & Procurement Risk: Latvia’s President Edgars Rinkēvičs warns Europe is falling behind Ukraine’s “lightning speed” drone and aerial warfare, saying many NATO states may struggle to repel a missile attack if conflict expands—while Patriot and interceptor shortages keep pressure on timelines. EU Border Tech Friction: The EU allowed several Schengen countries to pause full rollout of the entry-exit system (EES), after queues and missed flights sparked criticism from airlines including Ryanair. Aviation Cost Crunch: Global airline bankruptcies are spreading as fuel prices stay about 70% higher year-on-year, with restructuring pressures reaching carriers including AirBaltic. Food & Trade Markets: Euronext wheat tracked Chicago lower amid Black Sea uncertainty, while Baltic ports—including Latvia—continued to see Russian wheat offers. Latvia in Focus Abroad: Latvia banned Russian NHL star Alexander Ovechkin from entry, alongside other Russia-linked figures.

Latvia’s Defence Readiness: President Edgars Rinkēvičs warns Europe and NATO are falling behind in drone and aerial warfare after Ukraine, saying air defence and missile interception gaps mean many allies couldn’t repel a Russian missile strike if the conflict widens. EU Border Tech: Nine Schengen countries, including several major EU states, can pause full EES rollout into 2027 as facial and fingerprint systems still cause long queues and travel disruption. Aviation Cost Shock: Global airlines face a wave of bankruptcies as fuel prices surge about 70% year-on-year to roughly $181 per barrel, hitting smaller carriers hardest. Latvian Defence Industry: A Latvia–Germany trade mission in Berlin brought defence and dual-use firms to discuss joining German supply chains and joint technology development, with Latvia pointing to rising exports to Germany. Sanctions & Entry Bans: Latvia added Russian NHL star Alexander Ovechkin and boxing official Umar Kremlev to its entry blacklist, linking the move to pro-Putin political activity and Kremlin ties. Ukraine War Diplomacy: US-led talks involving Steve Witkoff and Jared Kushner are reviving negotiation talk, but territory disputes remain the core obstacle. Grain Markets: EU wheat tracks Chicago lower as Black Sea export uncertainty persists, while Baltic ports—including Latvia—remain part of the Russian wheat supply picture. EES & Travel: Ryanair again criticises EES as a “shambles,” pushing for further derogations as passengers face delays. Sports/Identity: Noahkai Banks’ switch to Germany for U-21 qualifiers also puts a spotlight on how dual-national athletes choose national teams.

Drone & Air-Defence Readiness: Latvia’s President Edgars Rinkēvičs warns Europe and NATO are falling behind Ukraine’s “lightning speed” drone and aerial warfare, saying many allies may struggle to intercept a Russian missile strike if escalation occurs—while Patriot and other interceptor supplies remain bottlenecked. Latvia–Germany Defence Trade: A LIAA-led delegation met German defence firms and ministry representatives in Berlin to deepen supply-chain links for unmanned systems, components and dual-use tech, citing rising Latvian exports to Germany. Crypto Regulation Shock: A report says ECB chief Christine Lagarde personally blocked Binance’s EU licence after Greece’s regulator had nearly cleared it, highlighting political friction in the bloc’s crypto rules. Latvia Entry Bans: Latvia banned Russian NHL star Alexander Ovechkin and Kremlin-linked boxing figure Umar Kremlev from entering the country amid pro-Putin controversy. Aviation & Restructuring Watch: UAE flight recovery remains uneven, with some carriers resuming later and others still suspending routes—an indirect reminder of how fuel and security risks keep reshaping regional travel. Canada Joins JEF Talks: Canada has formally applied to join the UK-led Joint Expeditionary Force, aiming to diversify defence ties across the North Atlantic and Arctic.

Latvia’s Security Readiness: President Edgars Rinkēvičs warned Europe is lagging behind Ukraine’s fast-moving drone and aerial warfare, saying many NATO states would struggle to repel a missile attack if the conflict spreads. Defense Procurement: Latvia approved buying Czech Morana 155mm wheeled howitzers instead of Sweden’s Archer, citing lower cost, faster delivery, and stronger local defense-industry involvement. Sanctions & Entry Bans: Canada’s Liberals faced calls to sanction Washington Capitals star Alex Ovechkin over a Putin-aligned ad, while Latvia also placed Ovechkin (and boxing figure Umar Kremlev) on its entry blacklist. Regional Military Cooperation: Canada formally applied to join the UK-led Joint Expeditionary Force, adding another Arctic/North Atlantic NATO member as Ottawa seeks more European security ties. Aviation & Restructuring Watch: airBaltic’s Chapter 11 process continued to draw attention as it secures court approval and financing amid jet-fuel pressure. Energy & Investment: EU CEF Energy grants backed cross-border renewables, including a Latvia-Lithuania onshore wind stage, while Luminor provided leasing and loans to Latvian firms expanding fleets and equipment. Latvian Business Abroad: Latvian fintech companies pitched German institutional investors in Berlin, aiming to scale in Europe’s largest economy.

Defence Procurement: Latvia has approved buying Czech Morana 155mm wheeled self-propelled howitzers, replacing the earlier plan to procure Sweden’s Archer, citing better cost, delivery timelines and stronger local defence-industry involvement. Aviation Restructuring Watch: airBaltic’s Chapter 11 push continues to shape regional travel and creditor talks, while AirAsia’s Tony Fernandes says the airline has “strong liquidity” to handle jet-fuel shocks tied to the Iran war. Banking & Payments: Latvijas Banka has issued a licence to Velvian SIA to operate as a payment institution, enabling card-payment acceptance for merchants and business clients. Fintech Investor Push: Latvian fintech firms pitched solutions to German institutional investors and family offices in Berlin via an LIAA-led trade mission. EU Energy Funding: the European Commission approved €125.8m in CEF Energy grants for cross-border renewables, including €44.4m for a Latvia-linked wind project stage. Governance & Compliance: KNAB will investigate whether ZZS distributed alcohol-related “souvenirs” to seniors during the pre-election period, raising political financing rules questions. Mobility Policy: an EESC forum in Riga urged faster progress on sustainable and resilient mobility, including military mobility needs.

airBaltic Restructuring: Latvia’s carrier is in US Chapter 11, with court-approved DIP financing and ongoing creditor/operations questions—while Air Niugini Pilot Deal: up to 45 airBaltic pilots are set to “voluntarily” operate Air Niugini’s A220s from 2027, underscoring how restructuring is reshaping talent plans. Aviation Competition: Ryanair Expansion: the airline plans to double passenger numbers across the Baltic region to 11mn annual seats by 2031, explicitly banking on airBaltic’s retrenchment. Sanctions & Border Security: US-Latvia Talks: envoy John Coale met Latvian leaders on eastern-border security, illegal migration and Belarus prisoner releases; Russian Entry Ban: Latvia barred Alex Ovechkin and boxing official Umar Kremlev indefinitely. Trade & Food Policy: Russian Grain Fees: Saeima backed higher transit fees for Russian grain, with a full ban proposal still pending; Russian Food Import Ban: Latvia is moving toward extending the ban to food products from Russia/Belarus. Media & Culture: Streaming Funding Rules: Saeima backed changes requiring on-demand platforms to invest 3.5% of Latvia revenue into Latvian-language or European audiovisual works. Cyber Fraud: LMT Firewall: blocked 11.5mn fraudulent calls in seven months.

Aviation Restructuring: airBaltic has filed for Chapter 11 protection in the US as the Iran-driven fuel shock bites, with the airline saying flights will continue while it restructures debts and consults on workforce changes. Airline Competition: Ryanair says it wants to double passenger traffic in the Baltic region over five years, adding seats and aircraft as airBaltic shrinks its fleet. Film Funding Rules: Latvia’s Saeima-backed law would require major streaming platforms to invest 3.5% of Latvian on-demand revenue into Latvian-language European audiovisual works, with options including direct production, license purchases, or National Film Centre contributions. Business Finance: Luminor approved a EUR 6.3m loan to Livonia Print for new equipment to boost efficiency and export expansion. Export Push: LIAA and German chambers (DIHK/AHK) signed an MoU to help Latvian firms expand exports using the German Chambers Abroad network. Security & Disruption: Latvia’s State Security Service opened a case over threats targeting arms suppliers to Ukraine, while stevedoring firms hit back at calls for a Russian grain transit ban as economically risky. Public Transport: a bus operator protest led to thousands of cancelled regional journeys.

airBaltic Restructuring: Latvia’s flag carrier has secured U.S. Chapter 11 relief after filing on Sept. 14, with a Southern District of New York court approving debtor-in-possession financing that unlocks an initial €140m tranche (out of a planned €350m) so it can keep flying, pay staff and honour customer bookings while restructuring. Aviation Disruption Watch: Airlines continue revising Middle East schedules amid airspace instability, with British Airways pushing back some Abu Dhabi services to Winter 2027 and keeping other routes suspended longer. Defence Finance Push: Canada and the UK are in talks to merge their proposed defence financing initiatives, potentially creating a joint institution backed by multiple allies, as governments look for new ways to fund NATO-linked spending. Arctic Strategy: The EU is updating its Arctic approach as the region becomes more strategic and militarised, with Brussels framing the High North as both a security priority and a policy tool. Energy & Grid Moves: Lithuania approved measures to speed solar and storage, modernise district heating and expand power connections, aiming to become an electricity exporter by 2028. Local Telecom Cleanup: Latvian operator Tet and Riga municipality are working to identify and remove non-compliant overhead telecom equipment to make urban infrastructure safer and more transparent.

airBaltic Chapter 11: Latvia’s flag carrier airBaltic has entered U.S. Chapter 11 in New York to restructure debt after the Iran-linked aviation shock, but says flights will continue as normal; a court has approved first-day steps and interim debtor-in-possession financing, including an initial €140m draw from a €350m facility, with the airline aiming to complete the process by around June 2027 while negotiating with creditors. Aviation & consumer impact: The carrier’s London–Riga and seasonal Aberdeen–Riga routes still run, and passengers are told tickets and bookings remain valid with no action needed. Transport costs squeeze: Latvia’s passenger bus operators plan a nationwide protest and will cancel state-commissioned routes, warning that fuel-price rises and contract indexation rules are leaving carriers to absorb costs. Heating bills: Latvia’s climate ministry expects district heating tariffs to rise about 5–15% this season, with extra housing support proposed for low-income households, families with children and seniors. Healthcare pay pressure: A healthcare workers’ union is pushing for at least 30% pay increases in the 2027 budget and calls for the health minister’s resignation, threatening protests. Business & industry: Bruynzeel Storage Systems signs a strategic partnership with Finnish distributor Laaksonen to expand in Finland, Estonia and Latvia.

AirBaltic Restructuring: Latvia’s national carrier filed for US Chapter 11 on 14 September, seeking court-supervised debt reorganisation while insisting flights and customer services continue; the airline has €350m financing lined up (subject to approval) and operates routes including London Gatwick–Riga and a seasonal Aberdeen–Riga service. Defence Finance Push: Latvia is among countries backing Canada’s Defence, Security and Resilience Bank (DSRB), and UK officials say they’re actively exploring joining the initiative as pressure mounts to lift defence spending. Baltic Security Flashpoints: NATO jets shot down a drone over Lithuania after it entered airspace, with Latvia and Estonia also reporting similar drone incidents tied to Russia-linked electronic warfare. EU Funding for Dual-Use Port: The EU is financing upgrades to Klaipeda’s cruise terminal to make it dual-use for NATO needs, mixing military-ready infrastructure with green port improvements. Latvia Business & Policy: The Economics Ministry says cutting VAT on fuel from 21% to 12% could lower retail diesel and gasoline prices by roughly 15 cents per litre if the tax cut fully passes through. Tourism Disruption: Nepal flood reports list 607 foreign tourists missing, including 33 Latvians, highlighting travel and risk exposure for outbound markets. Riga Airport Expansion: RIX has started the next phase of its terminal expansion to boost capacity and add new passenger and security facilities.

AirBaltic Restructuring: Latvia’s national carrier has filed for U.S. Chapter 11 in New York to restructure its debt, while saying flights and customer services continue and tickets remain valid; the airline secured about €350m in court-approved financing and is expected to finish the process by June 2027, with fleet plans to cut from 54 aircraft to 36 by end-2026 and possible workforce adjustments. Fuel Costs & VAT: Latvia’s Economics Ministry says cutting VAT on fuel from 21% to 12% could lower pump prices by roughly 15 cents per liter for diesel and 14.6 cents for gasoline if the full tax cut is passed through. Banking & Forestry Growth: Luminor granted €1.06m to RĒZEKNES MEŽS for working capital and long-term financing to expand timber purchases, production and exports. Payments & AML Oversight: Wallester appointed a new CTO and CRO to its management board and assigned AML/sanctions responsibility to a board member, strengthening governance as it scales. Monetary Policy Watch: ECB governor Martins Kazaks said further, stepwise rate hikes may be needed if Iran-driven fuel inflation feeds into wages and broader prices. Labour Market Snapshot: Eurostat reports the EU employment rate edged up to 76.4% in Q2 2026, with Latvia among countries seeing a rise. Tech Talent Pressure: A Latvia IT sector pay survey shows slower salary growth but continued hiring plans, highlighting ongoing competition for specialists. Business & Security Planning: Latvia is preparing a crisis communications plan to keep mobile services operational for at least 72 hours. Cross-Border Mobility Rules: The EU published a list of 29 countries whose citizens are exempt from EES registration, relevant for travel and business travel planning. Regional Energy Moves: Lithuania approved measures to speed up solar and energy communities, aiming to become an electricity exporter by 2028. iGaming Expansion: Digitain will power LuckyBet.ee in Estonia with a turnkey sportsbook, CRM, affiliate and payments setup. Aviation Sustainability Deal: Finnair and Yusen Logistics signed an SAF agreement for air cargo using a book-and-claim approach. Transport Reliability Benchmark: IRG-Rail data shows Latvia leads on passenger train punctuality at 97.8% in 2024. Latvia in Culture: “Woman Unknown” won the Golden Lion at Venice for a Danish–Swedish–Latvian production, boosting Latvia’s creative visibility.

airBaltic Chapter 11: Latvia’s national carrier has filed for U.S. Chapter 11 in New York to restructure a debt pile, saying flights and customer services will continue normally while it seeks court approval for €350m in debtor-in-possession financing; CEO Erno Hilden says workforce changes are likely after talks with unions. EU Arctic Push: European leaders meeting in Finland backed a more strategic, proactive EU role in the Arctic as Russia’s military build-up and China’s growing interest raise security stakes, with a new EU Arctic strategy expected later this autumn. Latvia in the Arctic spotlight: Latvia’s PM Andris Kulbergs joined the Rovaniemi summit, where signatories called for better monitoring, information-sharing, and investment in transport and digital infrastructure to protect EU interests. Hybrid-security drills: Latvia’s National Armed Forces announced Namejs 2026 training in Riga from Sept. 16–20 focused on protecting critical infrastructure and responding to hybrid threats, with cooperation involving state security bodies and allied units. Trade & logistics pressure: Eurostat data shows EU rail freight fell for a fourth straight year in 2025, with Latvia among the biggest decliners, pointing to weaker transit flows. Local industry under strain: Russia’s MFA criticized Latvia’s “European values” in connection with the expected closure of power-tool maker Rebir, blaming sanctions for lost markets.

airBaltic Chapter 11: Latvia’s state-backed airline airBaltic has voluntarily filed for U.S. Chapter 11 restructuring in New York, saying flights and customer services will continue as normal while it negotiates with creditors. The carrier secured €350mn in debtor-in-possession financing to fund operations during the court-supervised process, expected to run until around June 2027. airBaltic creditor picture: filings suggest 10,001–25,000 creditors, with the largest unsecured claim of $66.5mn held by Pratt & Whitney, alongside major debts to Latvian state bodies and infrastructure partners. Energy investment: Latvenergo is evaluating wind and hybrid acquisitions up to 250MW, with PwC tasked to assess construction-ready projects and newer operating wind farms (turbines no more than five years old). Renewables & storage: European Energy says it has brought multiple battery projects online across Denmark, Lithuania and Latvia, positioning storage as a growing revenue and grid-balancing tool. Arctic strategy: European leaders meet in Finland to shape a common Arctic approach as new shipping routes open and security risks rise, with Latvia and Estonia among the scheduled participants. Policy pressure on industry: Russian officials blamed Latvia’s “European values” for the expected closure of Rēzekne power-tool maker Rebir, citing sanctions-driven loss of Russia/Belarus markets. Legal/market governance: Latvia’s grain-transit restrictions debate continues, with the Stevedoring Companies Association warning unilateral moves could shift costs onto Latvia and global supply chains. iGaming deal: Digitain signed a turnkey iGaming and sportsbook partnership with Estonia-licensed LuckyBet.ee. Business & culture: Baltic Sea Docs in Riga awarded eight projects, including Latvia-shot “Two of Us,” which won major prizes.

Arctic Summit Watch: European leaders including Latvia’s officials are in Rovaniemi for a two-day Arctic economy and security summit, aiming to align the EU’s strategic approach as the region’s geopolitical weight grows. Drone Disruptions: Lithuania briefly shut Vilnius airport and scrambled a NATO fighter jet after a suspected drone sighting—then it was confirmed to be birds, with normal operations restored within 38 minutes. Cross-Border War Spillover: Fresh Russian strikes near the Ukraine-Poland border are raising alarms that the conflict is reaching NATO’s doorstep, while Lithuania’s and Poland’s border operations face repeated disruptions. Latvia Defense Procurement Row: Latvia bought counter-drone interceptor systems before final explosive warhead arming was ready, according to the National Armed Forces commander—fueling political controversy over “drone superpower” claims. EU Company Data Rules: The European Court of Justice ruled that public access to shareholder personal data can’t be unrestricted under GDPR, a decision that matters for Latvia’s corporate transparency rules. Latvia Macro Snapshot: Latvia’s inflation rose to 3.2%, and one in four people report their financial situation has worsened. Business & Trade: Latvia’s trade gap widened in July, while Latvia’s trade growth in July was reported as double-digit. Tech/Defense Industry: NestAI expanded operations in Latvia to advance defense AI on NATO’s eastern flank. AirBaltic Finance: AirBaltic creditors face a vote on emergency debt that would outrank existing bonds, as the carrier’s funding debate continues. Entrepreneurship Education: A new Global Entrepreneurship Monitor ranking puts Latvia among the few countries where school-level entrepreneurship education clears the bar—alongside India and Estonia.

EU Company Law & Data Privacy: The European Court of Justice ruled that public access to shareholder information can’t be unlimited when it exposes personal data of minority shareholders, with GDPR blocking blanket disclosure without conditions. Baltic Defence & Drones: Latvia’s military chief says the country bought counter-drone interceptor systems before warhead arming was fully finalized, amid a political row over whether ammunition was “forgotten.” Air Safety & Drone Disruptions: Brussels airport traffic was halted for about half an hour after a drone sighting, using a formal runway-stoppage procedure; the incident follows similar alerts across the region. Latvia in the EU Competitiveness Debate: At the Riga Conference, EU Economy Commissioner Valdis Dombrovskis linked competitiveness to security and pointed to a proposed 2028-2034 budget with a new competitiveness fund. Labour Market Snapshot: Eurostat data show EU employment edged up to 76.4% in Q2 2026, with Latvia among the biggest risers (+0.4 pp). Tourism & Business Angle: Intrepid Travel’s 2027 “Not Hot List” spotlights less-visited destinations, aiming to spread demand and support local economies.