Baltic Reports No 7 / August 12-18, 2019

  • August 19, 2019


Germany should increase its defense budget. This is what Lithuania’s president Gitanas Nausėda told Germany’s Chancellor Angela Merkel during his visit to Berlin on August 14. Together with the president of Latvia, the Baltic heads of states expressed their opinion on Germany’s role in Europe. Nauseda asked Merkel to maintain sanctions on Russia until the aggression against Ukraine continues. He also asked to consider Ukraine’s interests while cooperating with Russia in the construction of the Nordstream 2 pipeline. Latvian President Egils Levits stressed the need for a new vision for Europe’s future during his meetings with German leaders. After Brexit, Germany has to play a more important role as a stabilizer and take responsibility for the future of Europe, Levis said.

Until recently, the relations between India and the Baltic States were minimal, but this may be changing. India’s vice-president Venkaiah Naidu, accompanied by the high-level delegation is visiting all three Baltic States starting from this week. “This is a historic visit in the sense that it is long-awaited and is the first-ever high-level visit to the three Baltic countries,” India’s Ministry of External Affairs said. Naidu will meet with all the highest-ranking officials of Estonia, Latvia, and Lithuania and will participate in business forums in all three Baltic capitals. The vice-president is to discuss foreign policy issues: the EU-India free trade agreement, cooperation in the upcoming Asia-Europe Meeting, United Nations and other multilateral formats”. In Riga, Naidu will unveil a bust of Mahatma Gandhi at the National Library of Latvia. In Estonia, he will discuss cooperation in e-governance and cybersecurity. Lithuania invites India’s representative to open the Embassy and Cultural Centre. The visit takes place in the context of increasing political engagement as well as intensified trade. Naidu will stay in the Baltic states from August 17 to 21.

30 years ago the Baltic people joined hands in one of the largest non-violent political demonstrations in history. It’s called the Baltic Way. It was the largest and most important campaign of the Baltic states to regain their freedom. Approximately two million people joined their hands to form a human chain, connecting all three capitals of the Baltic states. On August 23, to mark the anniversary, the prime ministers of the three states will meet in Riga. Latvia’s Prime Minister Krišjānis Kariņš will host the other two PMs at the Cabinet of Ministers in the framework of the Baltic Council of Ministers, as Latvia holds the rotating presidency of the forum this year. The Baltic Council of Ministers is an institution of trilateral intergovernmental cooperation of Latvia, Estonia, and Lithuania. The meeting on the occasion of the 30th Baltic Way anniversary is important because they will have to discuss their positions before the upcoming international meetings of the new political season.



Estonia’s infamous far-right Helmes family has once again tested the country’s democratic foundation. The Minister of Internal Affairs Mart Helme together with his son Martin Helme, who is also the Minister of Finance, tried to fire the long-time head of the Police and Border Guard Board Elmar Vaher. Both of them are leading members of the conservative EKRE party. The son Martin was replacing his father Mart who was on a holiday. After consulting with his father, he announced that disciplinary proceedings will be opened against the police chief. Helmes said that Vaher had worked against them. When Prime Minister Jüri Ratas heard about this, he quickly announced that Vaher won’t be fired. This is the decision of the government and not individual ministers, he emphasized. Vaher stayed in his position, but it’s difficult to imagine that the atmosphere at the Ministry of Internal Affairs will continue to be calm or even productive for a while now.

Estonians are undergoing another stage of the pension reform and can soon decide whether they’d like to keep collecting money for their retirement or partly withdraw and spend it. Estonia’s coalition agreed to make the employee’s contributions to their own second pillar of the pension fund optional. Pension Reform was one of the main promises the coalition conservative party Isamaa proposed before the elections, so this is a big victory for them. The leading Central Party, who has been promising increased pensions, will have to wait before being able to deliver their promises. All the coalition parties agreed that the pensions could be raised soon, but didn’t specify when exactly. If the reform is successful, Estonians will be able to opt-out from the second pillar already in 2020. The International Monetary Fund has warned that Estonia’s pension reform is risky. It would increase the burden on the next generations, especially during the process of aging. Many people who opt-out from the second pillar now, will have to be helped by the government later on, because the savings from the first pillar won’t be enough.

The Estonian famous ride-sharing company Bolt will soon have to adapt to the stricter rules in Russia as the Russian Duma is planning to vote on a new taxi law this autumn. According to the new law, the companies would have to register the business entity in Russia and pay taxes there. The ride-sharing company will also have to take all responsibility for the service. At the moment, the local offices are taking responsibility for the service. Bolt recently moved to St. Petersburg and has 100 000 clients there right now. The possible change of law this autumn may be devastating for the company.



The European Central Bank or in short ECB has closed down another Latvian bank. PNB Bank, previously called Norvik Bank, was Latvia’s sixth-largest lender with a €550m balance sheet. The ECB discovered that the bank has not complied with regulations and said that the lender was rated as “failing or likely to fail”. The decision by the ECB to shut it down is another blow to the country’s scandal-hit banking system. Last year, the US accused ABLV, Latvia’s then third-largest bank, of “institutionalized money laundering”, effectively leading to it being wound up by the ECB.  In April 2019 the Latvian regulator requested that the ECB take over the supervision of PNB after the bank launched a legal challenge against Latvia’s financial watchdog in an international arbitration court, making domestic supervision of it difficult. This is the fifth time that the ECB has used its power to shut down or force the fire sale of an ailing bank, after doing so with Spain’s Banco Popular and two lenders in Italy’s Veneto region.

Russian TV comments about Latvian president Egils Levits contained “hate speech”, Latvia’s broadcast regulator, the National Electronic Mass Media Council, has concluded. The council refers to broadcast on May 30 by the Russia 24 TV channel, disseminated in Latvia by numerous cable operators. The representative of the council told Latvian public media that, among other things, the show’s presenter stated that the newly elected President of Latvia is involved in discrimination against national minorities, including Russians. According to Latvian law, the content of programs broadcast from third countries is the responsibility of the cable operator and so has initiated 19 administrative cases with regard to the broadcast. Russia 24 TV channel is a state-owned Russian language news service and it has also come under close scrutiny by Lithuania’s regulator.

Drone operators will soon have to be at least 16 years old and pass a test before being able to conduct risky flights in Latvia. New regulations for drone flights in Latvia have been passed and are set to go into effect this year. To promote the safety of unmanned aircraft, including all kinds of drones, the government decided that remote pilots will have to be at least 16 years old, but for high-risk flights, the age will be 18. To conduct a high-risk flight, the person will have to acquire permission from the Civil Aviation Agency. This will require to pass a test of theoretical and practical knowledge, a flight risk assessment and a flight record. Also, certain types of drones will have extra rules, mandatory insurance being an example. The theoretical and practical exams will be free of charge and carried out by the Civil Aviation Agency.



In 2018 Lithuania was the third most popular country in Eastern Europe for Schengen visa requests after the Czech Republic and Poland. Lithuania has received over 3500.000 applications in total and two-thirds of them come from Lithuania’s consulates in Belarus. Because of the high number of applicants from Belarus, Lithuania receives more visa requests than the other Baltic states combined. This data was revealed by the Schengen Visa Info last week. Because of the high number of applicants from Belarus, Lithuania receives more visa requests than the other Baltic states combined. This data was revealed by the Schengen Visa Info last week. From February 2020 after the introduction of the new European Visa Code, the cost of a Schengen visa for Belarusians should increase from €60 to €80. However, Belarus and the EU are expected to sign an agreement on visa regime simplification by then. If the EU and Belarus manage to sign a visa-facilitation agreement, the price could drop to as low as €35. The speedy signing of the visa facilitation agreement between Belarus and the European Union in Lithuania’s interest, whereas it’s capital Vilnius continuously benefits from Belarusian shopping tourists. Especially on weekends, Belarusian shoppers are dominating buyers at Vilnius supermarkets. They are coming to Lithuania because of the bigger variety of goods.

German Police together with Europol, Belgian and Lithuanian police forces captured a Lithuanian German Police together with Europol, Belgian and Lithuanian police forces captured a Lithuanian organized crime network that specialized in stealing of luxurious car parts. In the course of the investigation, 279 criminal cases for total damage of €1.35 million have been attributed to this Lithuanian group. In total, 13 members of the criminal network were arrested through July and August. Since 2017, the criminals were operating throughout Germany and Belgium, breaking cars and removing the expensive navigation systems, multifunction steering wheels, and airbags. After being stored in external depots, the stolen items were then shipped to Lithuania for resale purposes. In recent months, 10 Lithuanians were detained in Germany. The last phase of the operation takes place in Panevėžys, Lithuania where two suspects have been detained and the joint force is still looking for the last one.


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