After a brief period of independence between the two World Wars, Latvia was annexed by the USSR in 1940. It reestablished its independence in 1991 following the breakup of the Soviet Union. Although the last Russian troops left in 1994, the status of the Russian minority (some 30% of the population) remains of concern to Moscow. Latvia continues to revamp its economy for eventual integration into various Western European political and economic institutions.
Update No: 270 - (26/06/03)
Presidential election looming
On June 20th there will be an indirect election for the presidency of Latvia. The winning candidate needs 51 votes from the 100-seat parliament in an extraordinary session.
The likely winner is the incumbent, whose term expires on July 7th, namely Vaira Vike-Freiberga. She has presided over Latvia's accession to NATO and its negotiations to join the EU, set for May 1st 2004. She is popular at large and has the support of both the three-party coalition government and the main opposition force, the People's Party.
There is no outstanding opposition figure, such as Rolandas Paksas, who upset Valdas Adamkus in Lithuania to seize its presidency recently. Vike-Freiberga is likely to win easily.
She is a stylish president, who has represented Latvia well abroad. She is highly regarded by Bush and Powell in Washington, but is also a favourite with the Europeans. As a small country with a past history of oppression by Moscow, Latvia has a lot of sympathy in the US and the EU.
The big residue of Soviet occupation is a population of local Russians amounting to 30% of the total population. They are concentrated in the towns, the six largest of which, including the capital, Riga, have a majority of Russians.
Some 10,000 Russian-speakers demonstrated in Riga in late May against a plan to make Latvian the main language of school instruction. The proposed policy, to come in during 2004, would side-line Russian and make English the preferred second language. All very logical in today's world. Talking to Bush is more important than talking to Putin, these days, think most Latvians.
But Russian is of course a great language with a very great literature. It makes sense to keep it as a main language in the school curriculum. Like India, Latvia really needs a three languages policy.
Domestic potitics in turmoil
Prime Minister Einars Repse, formerly a brilliant central banker, spoke out against the rally, calling it " a swan song" for hostile elements as NATO and EU membership loom. For both organisations English is an absolute must.
Repse said that the recent move of the Union of Greens and Farmers (ZZS), voting against amendments to the law on the Corruption Prevention Bureau, is caused by fear of a "powerful and well-managed" Corruption Prevention Bureau.
"It is really amazing how scared they are of the bureau," Latvian State Radio quoted Repse in an interview. "I understand very well why the People's Party is afraid. It is not clear why ZZS also fears it so much."
Repse does not think that the concerns are primarily linked with the bureau being responsible to the premier. "Everybody says that they are afraid of subordination. It is rhetoric coming from the People's Party," Repse said, adding, "what they say is not always the right thing. More important is what they are trying to conceal. Now they are trying to conceal their fear of a powerful, well-managed Corruption Prevention Bureau."
Formation of the Corruption Prevention Bureau has been torpedoed on several occasions in the past. "The government where the People's Party was widely represented, did much to have a weak and stunted bureau," Repse said, adding that these attempts are not over yet.
UNESCO concerned about planned construction of Sun Stone business complex
Mechtild Rossler, chief of the UNESCO World Heritage Centre in the European Region, told Latvian parliament and Riga City Council deputies on 2nd June that the planned construction of the 26-story Sun Stone business complex in Riga's Kipsala district could result in the removal of the city from the UNESCO list, LETA News Agency has reported.
Rossler noted that a similar situation had arisen in Vienna, where a project for constructing four skyscrapers in the city's historic centre was halted after a similar warning. Two floors of the Riga building and a parking lot have already been built. Culture Minister Inguna Ribena and the head of the State Cultural Monument Protection Inspection Juris Dambis told a press conference on 4 June that the most reasonable way to resolve the situation would be to alter the plans for the complex to bring them into line with Kipsala regulations that do not allow buildings of more than 15 stories.
Latvenergo to receive 40m Euro loan from EIB
Latvian national power company, Latvenergo, signed a syndicated agreement in Helsinki recently with several foreign banks on allocation of the first tranche of a European Investment Bank (EIB) loan of €40m, BNS reported. Nordea Bank Finland Plc, Bank Austria Creditanstalt AG and Norddeutsche Landesbank Luxembourg SA, each with equal shares in the agreement, will guarantee the loan.
The guarantee agreement may be upped to €80m, the Latvian branch of Nordea Bank Finland Plc said. The five-year agreement may also be extended for a further five years.
Latvia to get 830m more Euros from EU than own contribution in first three years.
Finance Minister Valdis Dombrovskis told parliament on 29th May that in 2004-2006 Latvia will receive 830 million euros (US$990m) more that it will contribute to the common EU budget, LETA News Agency has reported.
He said that during that period Latvia will receive about 1.117 billion euros from EU structural funds and assistance programmes, but would have to contribute just 287 million euros. Dombrovskis said the size of Latvia's payment to the EU budget should not grow much year to year, but EU funding to Latvia should increase annually.
US businesses interested in Ventspils Nafta
US Ambassador to Latvia, Brian Carlson, told Economy Minister, Juris Lujans, in Riga on 4th June that U.S. investors are ready to invest in the joint-stock oil company, Ventspils Nafta,(VN), BNS News Agency reported.
Its export operations have been reduced to a trickle by the decision of the Russian state-owned oil exporter, Transneft, not to send any more oil to Ventspils by pipeline. The bulk of the company's shares are currently held by the private company Latvijas Naftas Tranzits (47 per cent) and the state (43.6 per cent). Carlson said that the unclear structure of VN's shareholders makes investors somewhat cautious. He invited Lujans to visit the United States in the fall to present to US businessmen the possibilities for investment in Latvia as a future member of the EU. Ventspils Mayor, Aivars Lembergs, visited the United States in early May, to survey investor interest in Ventspils
FOREIGN LOANS & AID
UK/Latvian bilateral agreement signed
The head of the United Kingdom's National Audit Office, Comptroller and Auditor General, Sir John Bourn, and Finance Minister, Valdis Dombrovskis, signed a bilateral cooperation agreement in Riga on 28th May, LETA News Agency has reported.
The accord provides for British assistance in preparing a financial-monitoring system in Latvia in order to efficiently implement projects financed by the EU. The agreement is valid for two years and will be financed by 2.5 million Euros (US$2.95 million) from the EU's PHARE programme. Bourn held talks the previous day with parliament speaker Ingrida Udre, who briefed him on the establishment of a parliamentary public-expenditures and audit commission that is authorized to supervise and control budgetary expenditures. State Controller Raits Cernajs also participated in the meeting.
Latvian, Russian presidents hold informal meeting
President Vaira Vike-Freiberga and Russian President Vladimir Putin had an informal meeting in St. Petersburg on 31st May during the EU-Russia summit, LETA News Agency reported the next day.
They agreed that relations between their countries should become closer. Vike-Freiberga also held informal talks with Russian Prime Minister Mikhail Kasyanov as well as Kazak and Finnish Presidents Nursultan Nazarbaev and Tarja Halonen. In her speech at the summit, she said that EU expansion will bring better cooperation between the EU and Russia, noting that talks on an EU-Russia visa-free regime can begin only after major improvements are made in border procedures for both people and goods, and after border treaties are ratified with all EU countries, including Latvia.
Premiers discuss Latvian-Swedish cooperation within EU
Prime Minister Einars Repse discussed bilateral and regional cooperation and EU enlargement with his visiting Swedish counterpart, Goran Persson, in Riga on 26th May, BNS News Agency reported.
Repse accepted Persson's invitation to attend a planned meeting of the premiers of Estonia, Latvia, Lithuania, Denmark, Finland, and Sweden in Stockholm on 6th June. The prime ministers then discussed all the items on the agenda of the European Council meeting that is to be held in Greece on 20-22 June. The two prime ministers also talked about EU agricultural policies and preparations for the referendums in September on the introduction of the euro in Sweden and EU membership in Latvia. In later talks with President Vaira Vike-Freiberga, Persson praised Latvia's rapid economic growth and expressed the hope that trade between the two countries will increase.
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