Baltic Reports No 12 / September 16-22

  • October 7, 2019


By 2030, 5 million people annually will use Rail Baltica to travel from Tallinn to Warsaw and it will become a major turning point for Baltic freight business. The Rail Baltica quarterly report reveals the expected impact of the project and also worries surrounding it. The project has already created many opportunities in the construction market and other businesses expect increase in their capacities. For instance, Latvia’s officials expect to use Rail Baltica for taking over some of the freight from Russia to Europe. Several passenger rail stations on the new line will be built or transformed, the biggest of them being the Riga Central Station. However, until this moment, the construction and management of the project has ran into many obstacles due to disagreements between the three Baltic countries, which has led to considerable delays. The construction of Rail Baltica should be finished until 2026, but delays are obviously expected. To tackle the arguments, management agreed on introducing a new board position – Chief Program Management Officer. The new board member will oversee the implementation of the Rail Baltica Master Plan in all three Baltic States and will become the official Baltic problem solver.



Lithuania’s ruling coalition continues to push towards  major changes in the public broadcasters’ – or in short, LRT’s – management. Lithuanian Farmers and Greens Union declares they want to minimise the influence of politicians, whereas LRT accuses them of an attempt to impose political control over the public broadcaster. The version of the amendments of the LRT law proposed by the Farmers Union in 2018 included significant changes of management, creation of a new managing body, and reforming present LRT Council. The draft legislation was produced after  conclusions of a special parliamentary commission, which revealed corruption amongst LRT leadership. However, later the Constitutional Court ruled that Seimas’ decision to establish this commission in order to investigate the public broadcaster’s finances was unconstitutional and has breached press freedom. This week, after almost two years of fighting, broadcasters representatives and parliamentarians sat down around one table. A joint commission has been formed in order to produce a new version of amendments of LRT law. However, the discussion will most likely be stalled when it will reach the topic of the influence of politicians on public broadcaster.

Press kiosks in Lithuania have begun selling Bitcoin coupons that can, in turn, be exchanged for Bitcoin tokens online. Customers won’t need to furnish any document or ID in order to convert their euros into Bitcoin when using the coupon to complete the transaction. All the crypto users will need is a Bitcoin address and an email address. The two companies behind the idea are a Lithuanian startup Rebiton and a Norwegian company Narvesen. They claim that they are committed to abiding by all the money-laundering laws. Many Lithuania’s entrepreneurs are at the forefront of developing crypto currency market. At the same time officials are lagging behind the changes and are not able to ensure that the transactions would be conducted in accordance with local rules and regulations. Therefore, there are no guarantees that the process won’t be abused in any way.

Over the past year, one in eight milk farmers have closed their businesses. That is what LRT journalists have found while investigating Lithuanian declining dairy farming market. According to farmers, Lithuania lacks a clear strategy for the dairy industry. Milk buy-up price in Lithuania is also one of the lowest in the European Union. The downfall of Lithuanian milk producers is sometimes attributed to the Russian food embargo. In 2014, the Kremlin imposed a ban on imports of meat and milk products, fruits and vegetables coming from the EU, US and Canada as a response to EU sanctions targeting persons and business sectors in Russia related to the attack against Ukraine. In 2015, Lithuanian exports to Russia fell 35 %. Since the start of embargo Lithuanian agriculture officials have been promising to find ways to compensate the local farmers’ loss. However, this hasn’t happened. Unless the situation changes, the farmers are threatening to boycott the lowest-paying milk processing company. This is rather a result of local retailers greed, not of the Kremlin’s embargo. For decades, Lithuanian retailers have  not been able to appreciate local produce and find mutually beneficial ways to develop relationship with milk producers.



Estonian government is trying to get people to pack their bags and move out of cities. Estonia is one of the least densely populated countries in the EU after Sweden and Finland, according to Eurostat. People are very scattered and providing basic services – like postal or medical services – is becoming more difficult. One of the major obstacles for those who do want to move, is the banks’ resistance to credit the purchase of countryside houses. The Minister of Population Riina Solman recently announced that the ministry is working on an idea to allow the government to act as a guarantee of the loan in such cases. Most typically, young, educated and wealthy families, who can afford it, move out from cities. While single men are the ones who tend to stay in rural areas, young women prefer cities. The government launched a “Day of Countryside Living” that will take place next weekend, on  September 28. Rural municipalities with kindergartens, schools, health, sports and other centres will open their doors to visitors.

The Ministry of Defence will pay compensation to nine local governments for using their land for military exercises. This was decided in a goodwill agreement signed this week by the Minister of Defence Jüri Luik and the representatives of municipalities. Local governments can use this money however they wish. The sum depends on the size of the fields and is connected to the land tax. Military drills and activities around Estonia are on the rise. For example, every year thousands of soldiers from over ten countries take part in a military drill called “Spring Storm”. The drills take place throughout the country, on the land, in the air and in the sea. The paramilitary armed forces Defence League drills take place every weekend throughout the summer. Locals who live nearby the exercise fields have complained about the disturbing sounds and the negative impact to the nature. The Defence Forces have apologized and acknowledged the problems, but nothing has changed to better.

The World Cleanup Day, the biggest event on earth that was started by Estonians took place this week. It brought together tens of millions of people in 163 countries to clean up rubbish from the public areas this year. Ironically, the cleanup day is not successful in Estonia as it is in other countries. Only 30000 people cleaned Estonia this week, while in Bulgaria, for instance nearly half a million locals took part. This year, Estonions focused on collecting small litter, like cigarette butts. What was remarkable this year was the noticeable number of young people who joined in. One of the organisers Hugo Rebane said that it is clear that environmental issues are becoming especially important to young people all over the world. The world’s biggest cleaning day started in 2008.

SOURCES:,, Eurostat,,


The government will reduce the number of administrative regions in Latvia from 119 to 36 and the locals are protesting. This week the government supported the Environmental Protection and Regional Development Ministry’s proposal and many local municipalities aren’t happy with the planned changes, therefore the Latvian Association of Local and Regional Governments is planning on protesting against the reform. The Association believes that the minister responsible for the reform hasn’t listened to any of the objections that the municipalities have and has simply pushed forward his ideas. Some locals have promised to block traffic and protest on the streets until their voice is heard. Municipalities mostly object because they don’t want to be merged with others. According to the responsible ministry, the functions of all municipalities are the same, but many smaller ones are not able to perform all their functions, and hence inequality between municipalities continues to increase. The reform has created a lot of disputes in different regions. For example, the mayor of Latvia’s second-largest city Daugavpils, Andrejs Elksnins, criticized the Latvian Association of Local and Regional Governments  for lack of involvement in the administrative territorial reform. This resulted in Daugavpils Municipality quitting the association. Future municipalities are planned to be formed around larger cities and development centres .

Latvia’s government will allocate 6.2 million euros in the next year’s budget to encourage Latvians to have more children. The government plans to give more support to large families who want to buy a home, as well as to create a family-friendly benefit system. At the same time, both the government and experts are aware that this money will not be enough and no results are expected soon. According to data by the Central Statistical Bureau of Latvia, there are around 1 million 900 thousand people in Latvia today. The number of births in Latvia has been decreasing for at least the past four years. In 2018, as compared to 2017, 1.5 thousand children fewer were born.

Latvian Chemical/Oil product tanker Ance was attacked on September 16, while at anchor near West Africa. Four robbers armed with a gun and knives took the crew hostage. After looting the cabins, the robbers locked the crew in a cabin and escaped. Crew personal belongings, cash and ship’s properties were stolen, but the representatives of the ship owners, Latvian Shipping Company, told national news agency LETA that the value of the stolen properties is not big. The crew of tanker Ance consists of 21 members, including two Georgian citizens, one Lithuanian and 18 Latvian citizens. None of the crew members were  injured during the incident and the ship was not damaged. Tanker in recent months has been trading in West Africa waters. 

SOURCES:, baltictimes.comI

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