Baltic Reports No 16 / October 14 – 20

  • October 21, 2019


Risk of poverty remains much higher in the Baltic states compared to other Northern European countries. On the International Day for the Eradication of Poverty, Eurostat revealed that in 2018 almost a third of the population in Latvia and Lithuania were at risk of poverty or social exclusion. In Estonia, a quarter is facing such risk. These numbers show that the Baltic states – once called Baltic Tigers – still haven’t channeled their growth into the social security of their citizens. Poverty remains high despite the fact that for  thirty years the Baltic economies have been steadily growing: for example, GDP per capita has tripled since the start of 2000’s. And the average monthly wage has almost doubled in the last ten years. The disparity means that Baltic politicians lack political will and are not accountable to their voters. For now, reaching Northern European living standards, the electoral promise heard so often, remains a fantasy for the general population. The large number of citizens of Latvia and Lithuania and a bit less in Estonia, are at high risk of falling into poverty. They can be compared to the  poorest southern EU member states like Bulgaria and Romania.



Lithuania, Norway, and Russia are working on the three-way spies swap. The deal will involve transferring two Russians in exchange for two Lithuanians and one Norwegian citizen. From the Norwegian side it is thought to be the former border guard Frode Berg. His case is well-known globally. Kremlin used it as an example revealing the questionable Norwegian intelligence’s recruitment methods. Berg was a persistent proponent of cross-border cooperation between Norway and Russia living in the border town of Kirkenes in Northern Norway. In December 2017, Russia’s Federal Security Service, or in short FSB, arrested him with cash and documents in his hands. Berg said he was on a Christmas holiday. Later, Moscow court convicted him to a 14-year prison term as a courier of Norwegian intelligence services. Lithuania is to transfer Nikolai Filipchenko, possibly a high-ranking FSB agent. Russia is to give up two individuals holding Lithuanian citizenship: Yevgeny MatAitis and AristIDas TamošAitis, who Moscow claims, worked for Lithuanian military intelligence. The deal involves one more undisclosed Russian citizen. Russia’s Foreign Ministry has not yet confirmed the report of the spy swap.

Ruling party in Lithuania announced it will increase taxes for business for the second time in one month. This is how Lithuanian Farmers and Greens Union  – or in short LFGU – is desperately looking for ways to fulfil their promises to their low income electorate before the 2020 general elections. On October 13, LFGU vice-chair Tomas Tomilinas initiated the introduction of a 1 percent trade tax for retailers from their annual turnover exceeding 2 million euros. This new tax hike would apply mostly to large food and house-hold retailers. Earlier in September, LFGU chair Ramūnas Karbauskis announced that the party also plans to impose new tax on banks. Subsequently, the Lithuanian Association of Banks threatened to increase loan prices and interest rates. In 2016, the LFGU won parliamentary elections with the promise to focus on social welfare and redistribute tax burden from the poor to the rich. Today, the party still doesn’t offer a clear, long-term vision of what has to be done, but is rather chaotically throwing around promises and proposals of increasing taxes. This raises doubt about their real intentions and distort the discussion on tax policy in Lithuania.



Conservative People’s Party of Estonia  EKRE wants the Ministry of Social Affairs, which is ruled by the Central Party, to stop funding local LGBT organisation. It is surprising, because the two parties share the power and by this occasion they are revealing the large divide and  differences within the Estonian government. EKRE’s deputy chairman Martin Helme referred to the LGBT community as a radical group that splits society. He said that it is absolutely unacceptable for EKRE to finance groups like that. This year, LGBT projects received almost 100 000 euros from the government. Central Party’s Tanel Kiik, the Minister of Social Affairs, responded that no communities should be excluded from the ministry’s area of responsibility. He explained that the ministry funds 80 different projects and organisations. The Minister Kiik called EKRE member’s announcements “worrying and sad”. He said that opinions like this cause unnecessary anger in society, unjustified fears, confrontations, and humiliates people. The Centre, EKRE, and Isamaa parties are the three members of the current ruling coalition.

Estonia’s two biggest cities Tallinn and Tartu are listed as some of the most creative and cultural cities in Europe. The new report called Creative and Cultural Cities Monitor is a tool designed by the European Commision to boost creative and cultural potential of European cities. Tallinn hosts various festivals that promote creative industries and green thinking. The old town of the city is included in the list of UNESCO World Heritage Sites. The second city, the university city Tartu, is a vibrant place with a high concentration of young people. Tartu will be the European capital of culture in 2024. Estonia’s culture has been blossoming in recent years. Never before has there been so much Estonian culture available like the last year. It was because of several reasons: Estonia celebrated its hundredth-year birthday and there were many events and activities in the country as well as outside; the minimum salaries of the staff in the culture sector has been increased by 78 percent in the last four years. And finally, there have been many investments directed to culture, particularly to the movie sector.



Brexit day is approaching soon, but around half of the Latvians living in the UK aren’t really preparing for it. The foreign minister of Latvia Edgars Rinkēvičs urged Latvians to take into consideration different scenarios possible after the UK leaves European Union. To protect themselves, they should register for permanent residence at the British Home Office. It’s necessary, because only this status would legally prove the rights of Latvia’s citizens in the UK. In case of a no-deal Brexit, the people would not be protected either by the UK or Latvia. Currently, around 16 000 Latvian nationals have registered, which is less than half of the total number of Latvians living in the UK. According to the social scientist Mārtiņš Kaprāns, UK Latvians are mostly indifferent or non-supportive of Brexit. In case they would have to leave the UK, Latvians would move to other countries like Germany or Norway, and only if that does not work out for them, they would return to Latvia. At the same time around every fifth of Latvians in the UK consider Brexit a good move.

Central and Eastern European countries and China High-level Conference on Tourism Cooperation will be held in Riga on the fourth week of October. This conference series has been around  for more than ten years and 17 countries are part of the program. In 2016 the conference was also held in Riga and the occasion was used to announce the founding of a Chinese investment vehicle called the “SINO-CEEF Holding Company Limited”. It was a big occasion with a lot of media coverage, high hopes and much fanfare, but little has been heard about it since. This October, China’s Minister of Culture and Tourism and other high-level officials are coming to Riga for the conference, and more promises are expected. At the same time, there’s a growing concern by Latvia’s security services about China’s growing interest in the region.


If you have suggestions or tips, don’t hesitate to reach out to us through

And don’t forget to follow us on Facebook or Twitter.