Latvia and the European Union

COUNTRY REPORT SERIES V

INSTITUTE OF CULTURE AND HISTORY

LATVIA AND THE EUROPEAN UNION

COUNTRY REPORT SERIES V

European Policy Studies ! Institute of Culture and History University of Amsterdam

Malou van den Broek, Liz Sophie de Bruijn, Enita Dautovic, Wojtek Dubelaar, Nathalie Felix, Dirk Goll, Remmert Keijzer, Renée Kok, Samuele Marsura, Chantal Mulder, Jessie Post, Lisa Schipper, Sabine van der Vaart, Jelle Vennik

© 2012: Malou van den Broek, Liz Sophie de Bruijn, Enita Dautovic, Wojtek Dubelaar, Nathalie Felix, Dirk Goll, Remmert Keijzer, Renée Kok, Samuele Marsura, Chantal Mulder, Jessie Post, Lisa Schipper, Sabine van der Vaart and Jelle Vennik.

ISBN: 978-90-807611-7-9

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Table of contents

List of abbreviations ...... v! Map of the Republic of Latvia ...... viii! Acknowledgements ...... ix!

1. Introduction ...... 1! 1.1 Outline ...... 1! 1.2 Methodology ...... 2!

2. Latvia: an overview ...... 5! 2.1 Territorial divisions ...... 5! 2.2 Environment ...... 6! 2.3 Demographics ...... 9! 2.4 The European Latvian ...... 14!

3. History ...... 19! 3.1 Introduction ...... 19! 3.2 Pre-modern history (9000 B.C. – 1200 A.D.) ...... 19! 3.3 German, Polish and Swedish rule (13th century – 18th century) ...... 20! 3.4 Russian reforms (18th – 20th century) ...... 22! 3.5 National awakening (1860 – 1920) ...... 23! 3.6 Latvian independence (1917 – 1940) ...... 25! 3.7 Soviet occupation (1940 – 1941) ...... 29! 3.8 German occupation (1941 – 1944) ...... 32! 3.9 Soviet occupation (1944 – 1991) ...... 34! 3.10 Independence (1991– present) ...... 44! 3.11 Current debate about historical events ...... 46! 3.12 Conclusion ...... 48!

4. Culture ...... 51! 4.1 Introduction ...... 51! 4.2 Latvian cultural expression ...... 51! 4.3 Language ...... 67! 4.4 Religion ...... 76! ii TABLE OF CONTENTS

4.5 Building Latvian identity...... 81! 4.6 Russian-speaking minority ...... 84! 4.7 National cultural policy ...... 86! 4.8 Conclusion ...... 89!

5. Law ...... 91! 5.1 Introduction ...... 91! 5.2 Applicable law and government ...... 92! 5.3 Judiciary ...... 102! 5.4 EU law in Latvia ...... 107! 5.5 International law in Latvia ...... 112! 5.6 Private law ...... 113! 5.7 Rule of law ...... 117! 5.8 Public opinion ...... 120! 5.9 Fundamental human rights ...... 121! 5.10 Human rights in practice ...... 129! 5.11 Women’s rights and situation ...... 147! 5.12 Organised crime ...... 156! 5.13 Law enforcement services ...... 157! 5.14 Corruption in Latvia ...... 158! 5.15 Conclusion ...... 168!

6. Politics ...... 171! 6.1 Introduction ...... 171! 6.2 National politics ...... 171! 6.3 Latvia’s foreign affairs ...... 186! 6.4 Towards EU membership ...... 205! 6.5 Overview of the first years as an EU Member State ...... 214! 6.6 Public opinion ...... 231! 6.7 Conclusion ...... 235!

7. Economy ...... 237! 7.1 Introduction ...... 237! 7.2 Key sectors ...... 237! LATVIA AND THE EUROPEAN UNION iii

7.3 Financial crisis and aftermath ...... 246! 7.4 Latvian government finances ...... 250! 7.5 Monetary policy ...... 256! 7.6 Labour market ...... 261! 7.7 The Latvian welfare state ...... 269! 7.8 Energy ...... 274! 7.9 Agriculture and rural development in Latvia ...... 281! 7.10 Latvia and the EU’s regional policy ...... 293! 7.11 Shadow Economy ...... 311! 7.12 Conclusion ...... 313!

8. Public life ...... 315! 8.1 Introduction ...... 315! 8.2 Education ...... 315! 8.3 Health care in Latvia ...... 327! 8.4 Public health ...... 335! 8.5 Media ...... 345! 8.6 Conclusion ...... 363!

9. Conclusion ...... 365!

References ...... 371!

LATVIA AND THE EUROPEAN UNION v

List of abbreviations

A.D. Anno Domini BA Baltic Assembly B.C. Before Christ BEMIP Baltic Energy Market Interconnection Plan BFTA Baltic Free Trade Agreement BSR Baltic Sea Region CAP Common Agricultural Policy CAR capital adequacy ratio CBSS Council of Baltic Sea States CC Concord Centre CF Cohesion Fund CFP Common Fisheries Policy CFSP Common Foreign and Security Policy CIS Commonwealth of Independent States CNDP complimentary national direct payments CoE Council of Europe DG Directorate-General EAFRD European Agricultural Fund for Rural Development EAGF European Agricultural Guarantee Fund EC Ecclesiastical Council ECB European Central Bank ECHR European Court of Human Rights ECJ European Court of Justice ECOFIN Economic and Financial Affairs Council of the European Union EEA European Economic Area EEAS European External Action Service EFF European Fisheries Fund EMU Economic and Monetary Union ENP European Neighbourhood Policy EP European Parliament EPP European People’s Party ERDF European Regional Development Fund ERM-II European Exchange Rate Mechanism ESCB European System of Central Banks ESF European Social Fund ESDP European Security and Defence Policy vi LIST OF ABBREVIATIONS

EU European Union EUBAM European Union Border Assistance Mission to Moldova and Ukraine EULEX European Union Rule of Law Mission in Kosovo GDP gross domestic product GHG greenhouse gasses GP general practicioner GRECO Council of Europe Group of States against Corruption GUAM Georgia, Ukraine, Azerbaijan, Moldova HELCOM Helsinki Convention on the Protection of the Martime Environment of the Baltic Sea Area HICP harmonised index of consumer prices HPC Health Payment Centre ILO International Labour Organisation ICT information and communications technology IMF International Monetary Fund ISAF International Security Assistance Force (in Afghanistan) KGB Committee for State Security (Komitet Gosudarstvennoy Bezopasnosti) LAEA Latvian Adult Education Association LBAS Latvian Free Trade Union Confederation (Latvijas Br!vo Arodbiedr!bu Savien!ba) LC Latvian Way (Latvijas Ce"#) LDDK Latvian Employers’ Confederation (Latvijas Darba Dev$ju Konfeder%cija) LEA law enforcement agencies LGBT lesbian, gay, bisexual, transgender LIAA Latvian Investment and Development Agency (Latvijas Invest!ciju un Att!st!bas A&ent'ra) LNG liquefied natural gas LNNK Latvian National Independence Movement (Latvijas Nacion%l%s Neatkar!bas Kust!ba) LPP Latvia’s First Party (Latvijas Pirm% Partija) LSDWP Latvian Socialist Democratic Workers’ Party MEP Member of the European Parliament NA National Alliance NATO North Atlantic Treaty Organisation NB-8 Nordic-Baltic Eight NC Nordic Council NEPLP National Electronic Mass Media Council (Nacion%l% Elektronisko Pla#sazi(as L!dzek"u Padome) NGO non-governmental organisation NTSP National Tripartite Cooperation Council (Nacion%l%s Tr!spus$j%s Sadarb!bas Pa- LATVIA AND THE EUROPEAN UNION vii

domes) OLAF European Anti-Fraud Office (Office de Lutte Anti-Fraude) OOP out-of-pocket OP operational programme OSCE Organisation for Safety and Cooperation in Europe PACE Parliamentary Assembly of the Council of Europe PCTVL For Human Rights in Latvia (Par Cilv$ka Ties!b%m Vienot% Latvij%) PHC Primary Health Care PM Prime Minister PPP purchasing power parity SAPS single area payment scheme SBSR Strategy for the Baltic Sea Region SCCF State Culture Capital Foundation SIA limited liability company (sabiedr!ba ar ierobe)otu atbild!bu) SLI State Labour Inspectorate SMEs small and medium-sized enterprises SPRK Public Utilities Commission (Sabiedrisko Pakalpojumu Regul$#anas Komisija) SPS single payment scheme SS Schutzstaffel SSR Socialist Soviet Republic SSS short sea shipping SU Soviet Union TEN-T Trans-European Transport Networks TFEU Treaty on the Functioning of the European Union TI Transparency International U.K. United Kingdom UN United Nations UNFCCC United Nations Framework Convention on Climate Change U.S. United States of America USSR Union of Socialist Soviet Republics VAT value-added tax WHO World Health Organisation WTO World Trade Organisation ZRP Zatler’s Reform Party ZZS Union of Greens and Farmers (Za"o un Zemnieku Savien!ba) viii MAP OF THE REPUBLIC OF LATVIA

Map of the Republic of Latvia

A5.jpg. - egions, (r divisions Republican administrative cities the and showing counties).Latvia of Republic the of Map : 1 . 0 Figure Source: Bureau Statistical ofLatvia, fromretrievedhttp://commons.wikimedia.org/wiki/File:Statistiskie_regioni

LATVIA AND THE EUROPEAN UNION ix

Acknowledgements

The authors would like to acknowledge the contributions of the more than 100 experts who assisted in the production of this report.

Most importantly, we express our deepest gratitude for the kind cooperation of all interviewees, who agreed to share their unique insights and opinions on the issues dealt with in this report. Their participation was indispensible for the level of depth that we wanted the report to have.

We would also like to thank the guest lecturers who helped prepare us for the fieldwork we carried out: Arnold van den Broek, Marc Jansen, Ben de Jong and Hendrik van de Roemer.

Finally, we are very grateful to Drs. Manon van der Laaken, Dr. Carlos Reijnen and Dr. Anne van Wageningen, for their guidance, constructive criticism and encouragement throughout the process.

The authors:

LATVIA AND THE EUROPEAN UNION 1

1. Introduction

1.1 Outline

Of the three Baltic states, Latvia is ‘left in the middle’ in many aspects. In terms of population, it is bigger than Estonia but has almost a million fewer inhabitants than Lithuania. On average, Latvia is economically more advanced than Lithuania, but performs badly compared to its high-tech neighbour Estonia, which is a member of the euro-area. The one area where Latvia clearly ranks highest is the amount of Russian citizens, stateless persons and ‘non- citizens’ living within its borders. The combination of this unexceptional place in most rankings and its peculiar ethnic composition makes Latvia a very interesting case study with regards to its relationship with the European Union (EU). The aim of this report is to present a broad and interdisciplinary analysis of the Republic of Latvia, its people and its position in the EU. Given this report’s place in the curriculum of the University of Amsterdam’s ‘European Policy’ Master’s programme, its particular focus will be on policies; the social, economic, legal and political backgrounds that shape them; and the consequences these policies have for Latvia’s inhabitants. The structure of the report will be outlined below. Firstly, Latvia will be presented ‘at a glance’ in chapter 2. An overview of Latvia’s geography, environment and demographics will paint a first picture of the country. Some details will be added by a brief analysis of our interviewees’ responses to a set of standardised questions. Throughout its history, Latvia has been caught between big powers. Its history is therefore largely filled with repression, suffering and struggle. While the first precursors of the Latvian nation can be found as far as 11 000 years in the past, Latvia has been an independent state for a total of just 43 years: from 1918 to 1940, and again since 1991. The subsequent Nazi and Soviet rule of Latvia during the 20th century were particularly defining for the country’s current state. Latvia’s turbulent history will be described and analysed in chapter 3 of this report. This history of foreign domination has definitely impacted Latvian identity and culture. While Latvia was no exception to the European rise of nationalism in the 19th century, the development of a Latvian nation (and the associated culture and identity) was greatly restricted by Latvia’s foreign rulers. Even today, the presence of a large Russian-speaking minority within Latvia’s borders leads to socio-cultural difficulties. Chapter 4 will look at these issues of culture and identity, and their constituting factors such as religion, language and art. When Latvia regained its independence in 1991, it also revived large parts of the legal system from its previous independent period. At the same time, Latvia’s integration into the international community greatly influenced its legislation and rule of law practice. While Lat- via is a properly functioning parliamentary democracy, some major issues remain, especially 2 INTRODUCTION

where corruption and the rights of national or social minorities are concerned. Latvia’s legal system and its daily functioning will be analysed in chapter 5. This legal framework provides the foundation for Latvia’s political landscape. After almost two decades of relative turbulence, Latvian politics now seem to be consolidating. From an international perspective, Latvia’s membership of the EU, NATO and other international organisations has transformed both national politics and Latvian foreign policy. The national political landscape, Latvia’s foreign policy and its position within the EU will all be discussed in chapter 6. Since its independence in 1991, Latvia’s economy has gone through a series of booms and busts. Most recently, a credit-fuelled boom after EU accession in 2004 was followed by a severe bust in 2008 and 2009. The combined effects of a deflating real estate bubble and the international economic downturn caused the Latvian economy to shrink by over a quarter in 2009 – a global record. After severe fiscal consolidation and an international aid package, Latvia seems to be back on the way towards sustained growth. These developments, as well as the underlying fundaments of Latvia’s economy, will be analysed in chapter 7. Latvia’s culturally marked history, as well as the rocky political and economic transition since 1991, have left Latvian public life notably underdeveloped. Public services such as health care and education suffer from persistent underfunding, and the Latvian media (already servicing a small market) were hit severely by the economic crisis. Furthermore, cultural tensions continue to have a significant impact on both the education system and the media landscape. Latvian society is characterised by a largely disinterested public, which regards democratic institutions with great scepticism. These issues will all be discussed in chapter 8. The combined topics listed above will provide a broad and interdisciplinary analysis of Latvia, its inhabitants and its position in the EU. The research presented in chapters 2 through 8 will allow us to draw various conclusions about Latvia’s past and present, and to make some remarks on its future as well. These conclusions and remarks will be presented in chapter 9.

1.2 Methodology

This report was produced in three phases. The first phase consisted of desk research: the authors drafted a preliminary version of most sections in the report, based on scientific literature, government documents, independent research, news reports and statistics. The second phase consisted of fieldwork: the authors travelled to Latvia and conducted interviews with relevant actors and experts (the interviews are discussed in more detail below). During the third final phase of production, the result of the desk research was compared with the data from the interviews. The totality of the input was then consolidated into this report in its final form. During the fieldwork in Latvia, 89 semi-structured interviews were conducted with repre- LATVIA AND THE EUROPEAN UNION 3 sentatives from across Latvian society: politicians, civil servants, lawyers, businesspeople, journalists, academics, activists and more. While most interviews took place in the capital, R!ga, interviews were also held in Jelgava (in the southern countryside) and Daugavpils, Lat- via’s second city and home to the largest concentration of Russian-speaking inhabitants. Fur- thermore, some interviews were conducted in Amsterdam and Brussels. To allow the interviewees to speak as openly and frankly as possible, the authors agreed not to disclose their identities, and not to use any direct quotes unless the interviewee specifically consented to this. However, where relevant, the societal position of interviewees will be mentioned in the text of the report. In the footnotes, individual interviews are marked alpha- numerically to allow the reader to distinguish different expert opinions, and the cities where the interviews took place: they start with an A (Amsterdam), B (Brussels), D (Daugavpils), J (Jelgava) or R (R!ga). Throughout the production of the report, the authors received guidance from their instruc- tors with regards to both the content and presentation of the research project. It should be noted, however, that the responsibility for the organisation, content and presentation of the research and the resulting report lies wholly with the authors and that it was produced in the framework of the curriculum of the ‘European Policy’ Master’s degree.

LATVIA AND THE EUROPEAN UNION 5

2. Latvia: an overview

2.1 Territorial divisions

After Latvia’s renewed independence in 1991, one of the first democratisation reforms was the reintroduction of local and municipal self-government.1 This was done according to the administrative divisions that prevailed in 1939 before the outbreak of the Second World War.2 A two-level system of local government was introduced: a higher and a lower level of local government. The higher level comprised 26 districts or ‘rajons’, which mainly had a coordinating role and few independent functions.3 The lower level of local government comprised 53 towns, 444 villages or parishes, 26 novads and 7 republican cities.4 The higher-level districts were appointed, while the lower level local governments were directly elected. However, this significant number of local administrations and their small size meant that their administrative capacity was very limited; the average population of the municipalities was only 1 500 inhabitants.5 In order to improve the administrative capacity and the efficiency of the planning and regional development responsibilities of local governments, discussions on administrative reforms started in 2002, when the Law on Regional Development was accepted.6 Five regional planning regions, responsible for regional development planning, were formed: Riga, Kurzeme, Latgale, Zemgale and Vidzeme, as specified in Figure 0.1 (see page viii). This was especially important considering Latvia’s accession to the EU and the optimal utilisation of EU funds for regional development. The main priority regarding further administrative reforms was the reduction of the number of municipalities and amalgamating the functions and responsibilities of the 26 districts.7 In 2007 a new law on administrative-territorial reform was accepted by the cabinet of ministers and then validated in 2009.8 According to this new law, Latvia changed its administrative division from a two-level system of local government to a one-level system of local government. The former 26 districts were abolished and hundreds of towns, villages, parishes and novads were merged into 110 municipalities.9 The reform was completed with direct elections of the new local municipalities in 2009. In addition, there are now 9 republican cities with the right to local government and their own city council.

1 N. Adams, e.a, Regional Development and Spatial Planning in an Enlarged European Union, Hampshire: Ashgate Publishing Limited 2006, p. 183. 2 Ibid., p. 183. 3 Ibid., p. 184. 4 Ibid., p. 184. 5 Ibid., p. 185. 6 Ibid., p. 160. 7 Ibid., p. 160. 8 Saeima – Latvian Journal, ‘Administrative areas and urban law’, http://www.likumi.lv/doc.php?id=185993, consulted on 10 April 2012. 9 Ibid. 6 LATVIA: AN OVERVIEW

2.2 Environment

2.2.1 Characteristics of the Latvian environment Latvia has a maritime climate and the winters are characterised by long periods of frost and snow. The hilly areas of Latvia in the northeast are therefore suitable for skiing. Latvia has a coastline along the Gulf of Riga. The Daugava is the largest river in Latvia and is more than 1000 kilometres long. The river originates in Russia and flows through Bela- rus into Latvia, and subsequently culminates nearby Riga, into the Gulf of Riga. Latvia is known for its large forested areas: the forests constitute nearly half of the Latvi- an territory.10 In Latvia an interesting mix of flora and fauna can be found as a result of its geographical location: Latvia is located between the east and the west of Europe.11 Also, because of the pureness of the Latvian nature, many species that are scarce in western Europe can still be found in this region. For example wolves, lynx and white storks can still be found in the forests of Latvia. The best-known protected area of Latvia is Gauja, which is located in the northeast of Latvia.12 Both the large numbers of rivers and the coastline contribute to a wide range of fresh and saltwater fish, such as salmon and herring.13 Compared to the other EU Member States, the environment of Latvia is in quite good condition, due to the fact that nearly half of the territory is covered with forest. Although some of the wood is being cut for industrial reasons, there are also ‘Natura 2000’ sites, where the cutting of wood is prohibited. These sites aim to protect the forest and the biodiversity of Latvia.14

2.2.2 Environmental pollution The Soviet regime has led to a deterioration of the environment of Latvia. The main cause for the formerly environmental pollution was the industrialisation conducted by the Soviets after the occupation of Latvia.15 Chemical factories that were established in Latvia dumped their waste materials into the environment, without taking into account the consequences.16 The Soviet military areas, such as air fields and rocket bases, were the most polluted areas.17 After the Soviet occupation, Latvia was saddled with an enormous environmental problem. Because of the financial losses of these polluting industries, the new Latvian govern-

10 K. Onwijn, Baltische landen – Estland, Letland en Litouwen, Amsterdam: Kit Publishers 2007, pp. 10-13. 11 Interview D08. 12 Landenweb, ‘Letland planten en dieren’, retrieved from: http://www.landenweb.net/letland/planten/, consulted on 1 March 2012. 13 K. Onwijn, Baltische landen – Estland, Letland en Litouwen, Amsterdam: Kit Publishers 2007, pp. 10-13. 14 Interview D08. 15 Ibid. 16 K. Onwijn, Baltische landen – Estland, Letland en Litouwen, Amsterdam: Kit Publishers 2007, pp. 10-15. 17 Interview D08. LATVIA AND THE EUROPEAN UNION 7 ments decided to shut them down, and to create a service-oriented economy instead.18 How- ever, the Latvian government did not have the financial means to take care of the environmental pollution. For that reason, funds from the European Union and bilateral funds have helped to develop a more environmentally friendly industry. For example, the previously heavily polluted Latvian seaside resorts Jurmula, Liepaja and Ventspils are now clean again.19 To a lesser extent, some small localities are polluted with chemicals from the agricultural sector and industrial waste. However, both the industrial and the agricultural sector are not extensive enough to form a true environmental threat.20 Currently, the most significant environmental concerns in Latvia are coastal erosion near the seashore and water pollution. The Gulf of Riga and the Daugava River are both polluted. Because the Daugava river crosses three countries, more extensive cooperation with the non- EU Member States Russia and Belarus is needed in order to combat this pollution.21 Another environmental problem is the poor condition of the Baltic Sea area. This is the result of the dumping and disposal of hazardous substances, the use of inappropriate fishing equipment and the effects of climate change.22 The countries surrounding the Baltic Sea (Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Norway, Poland, Russia, and Swe- den) therefore adopted the Helsinki Convention on the Protection of the Marine Environment of the Baltic Sea Area (HELCOM) in 1972, which entered into force in 1980. Intergovern- mental cooperation such as HELCOM and other non-governmental organisations work to protect the Baltic Sea area.23 However, at the moment HELCOM operates more as an informative organisation than an acting one.24 Reports by the World Wildlife Fund clearly show that the condition of the Baltic Sea area is still very critical.25 (For an overview of EU action regarding the Baltic Sea area, please refer to section 6.5.5 on page 223.) The main challenges with regard to the Latvian environment are to improve the water sewage system and the drinking water quality, and to develop the waste collection disposal system.26 Around the year 2000, Latvia started to implement the EU Directives concerning the set-up of the waste collection disposal system and the water services development.27 Ac-

18 K. Onwijn, Baltische landen – Estland, Letland en Litouwen, Amsterdam: Kit Publishers 2007, pp. 10-15. 19 Ibid., pp. 10-15. 20 Interview R74. 21 Ibid. 22 WWF, ‘About the Baltic Sea’, retrieved from: http://wwf.panda.org/what_we_do/where_we_work/baltic/area/, consulted on 18 March 2012. 23 Helsinki Commission Baltic Marine Environment Protection Commission, ‘The Helsinki Convention’, retrieved from: http://www.helcom.fi/Convention/en_GB/convention/, consulted on 18 March 2012. 24 Interview D08. 25 WWF, ‘About the Baltic Sea’, retrieved from: http://wwf.panda.org/what_we_do/where_we_work/baltic/area/, consulted on 18 March 2012. 26 CIA – The World Factbook, ‘Latvia’, retrieved from: https://www.cia.gov/library/publications/the-world- factbook/geos/lg.html, consulted on 8 April 2012. 27 European Parliament and the Council, ‘Directive on waste and repealing certain Directives’, Directive 2008/98/EC of 19 November 2008; European Commission, ‘Introduction to the new EU Water Framework Di- rective’, retrieved from: http://ec.europa.eu/environment/water/water-framework/info/intro_en.htm, consulted on 8 April 2012. 8 LATVIA: AN OVERVIEW

cording to these Directives, 95 % of agglomerations have to be connected to the central waste water collection system and 90 % have to be connected to the central water supply system. With the help of cohesion funds from the EU, Latvia is making progress in the big cities. However, these goals have not been achieved yet.28

2.2.3 Kyoto protocol In 1997 the Kyoto protocol, a protocol to the United Nations Framework Convention on Cli- mate Change (UNFCCC), was signed by 55 industrialised countries. With this treaty, the participating countries agreed to reduce emissions of greenhouse gasses (GHG). The agreement was to reduce the emission of the GHG by an average of 5.2 % by 2008 – 2012, compared to the level in 1990. The reduction percentages vary from country to country, since they were based on the economic strength and willingness of a country to reduce the emission. For example, the U.S. needs to cut emissions by seven per cent, whereas Japan agreed on six per cent and the EU has to reduce emissions by eight per cent. The EU subsequently determined the emissions reductions per Member State.29 The European Union attaches great value to the fight against climate change, and is therefore committed to combat climate change on both a European and an international level. In December 2008, EU leaders agreed on a reduction of emissions of greenhouse gasses by 20 % by 2020.30 In 2002, the Saeima ratified the Kyoto protocol. Since 2002, Latvia is committed to the reduction of emissions of GHG by eight per cent. In 2005, the Latvian government adopted the Climate Change Mitigation Programme for 2005-2010, in which an overview of the governmental measures for reducing the emission of GHG was further elaborated. The primary goal of this Mitigation Programme is to make sure that, starting from 1998, the total amount of GHG emissions would not exceed 92 % of the 1992 level. The Latvian government aimed to achieve this goal by implementing the following measures:

- Increasing the share of renewable energy sources in the energy balance; - Increasing efficient and rational use of energy resources; - Developing an environmentally friendly transport system; - Promoting the implementation of the best available techniques, environmentally friendly technologies and cleaner production; - Promoting the implementation of environmentally sound agricultural methods that reduce direct GHG emissions;

- Increasing CO2 removals in forestry;

28 Interview R74. 29 Kyoto Protocol, United Nations Framework Convention on Climate Change (1998), available at http://unfccc.int/resource/docs/convkp/kpeng.pdf. 30 Europa Nu, ‘Europese aanpak klimaatverandering’, retrieved from: http://www.europa- nu.nl/id/vhesf063wxu9/europese_aanpak_klimaatverandering, consulted on 10 April 2012. LATVIA AND THE EUROPEAN UNION 9

- Establishing an up-to-date municipal waste management system, ensuring collection of biogases in municipal waste landfills.31

In 2008, a survey of the Latvian Ministry of the Environment’s Climate Policy and Technolo- gy Department showed that the GHG emissions of Latvia were considerably lower than the targets of the Kyoto protocol and that Latvia was one of the European Member States with the largest GHG emission decrease in the EU. As Latvia is below the target of the Kyoto protocol, it enables Latvia to sell emission rights to other countries.32 Also, Latvia will easily reach the future targets that are set by the EU, due to the fact that it has large forests and does not possess extensive industry areas at the moment.33

2.3 Demographics

2.3.1 History’s impact on Latvia’s demographic composition Latvia’s recent history, from 1940 onwards, has had various consequences for the composition of Latvia’s population throughout the years. Firstly, the first Soviet occupation of Latvia (1940 – 1941) was accompanied by large-scale deportations of Latvian citizens in 1941.34 On 14 June 1941 for example, over 15 000 Latvians became the victim of deportations35 to Gulag camps, which were mainly located in Siberia.36 The death rate in the gulag camps was signifi- cant37 and a considerable number of Latvians never returned. Secondly, the occupation of Latvia by Nazi-Germany (1941 – 1944) changed the demographic composition of the country as well. As in many other countries, Nazi-Germany placed a specific focus on the extermination of the Jewish population in the Baltic states.38 Accord- ing to the 1935 census, approximately 93 000 Jews lived in Latvia before the Second World War. Approximately 73 000 of these citizens were killed during the German regime.39 In total, the German occupation of Latvia led to a drastic decrease of the Latvian population: around 120 000 Latvians (including the Jewish citizens) became the victims of expulsion or execution.40

31 Latvian Ministry of Environmental Protection and Regional Development, ‘Global climate change’, retrieved from: http://www.varam.gov.lv/eng/darbibas_veidi/global_climate_change/, consulted on 10 April 2012. 32 Ministry of the Environment, Climate Policy and Technology Department, ‘Latvia’s GHG emissions, trends, policies and measures’, retrieved from: http://www.zm.gov.lv/doc_upl/GHG_Latvia_Petersone_[Compatibility_Mode].pdf, consulted on 10 April 2012. 33 Interview D8. 34 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 39-40. 35 Interview D03. 36 Interview R03. 37 Interview R60. 38 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, pp. 117-118. 39 Interview R23. 40 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & 10 LATVIA: AN OVERVIEW

Thirdly, the reestablishment of Soviet dominance over Latvia after 1944 again influenced the demographic composition of the country. Fairly soon after reoccupation, the Latvian Communist Party was reestablished. Since the ethnic Latvian population was not willing to participate in the Party, approximately 9 000 communists were imported from various destinations into Latvia to join the Communist Party.41 Next to this political change, the introduction of industrialisation also had major implications for the country in terms of population: it led to a wave of immigrants coming from the Soviet Union to Latvia, where they were being employed in the newly created factories.42 In the period between 1968 and 1980, labour shortages resulted in more massive immigration waves from Russia to Latvia, which increased Soviet demographic control over the country even more.43 Over time, the population balance in Latvia shifted considerably, and by 1979 just 38.3 % of all people living in Latvia’s capital were ethnic Latvians.44 In addition, an increasing number of Jewish Latvians decided to emigrate; in the period from 1970 to 1989 approximately one third of Jewish citizens emigrated. From 1989 to 2000, another third of the remaining Jewish citizens emigrated.45 Depending on the data used, the current number of Jewish citizens in Latvia varies from 6 500 to 15 000.46 Another historic development that heavily impacted Latvian demographics is related to housing. Throughout the late 1960s and 1970s, Latvia was faced with a lack of living space and therefore housing accommodations formed a substantial problem.47 This housing problem led to a large number of abortions, as women believed that there was insufficient space to raise their children: in 1973 alone, 60 000 abortions took place in Latvia; mostly due to ‘inadequate housing’.48 Finally, Latvia’s independence in 1991 resulted in emigration waves by citizens who opposed the drastic change to independence. As a result, thousands of citizens emigrated to Rus- sia.49 Moreover, a relatively small number of Latvians, who had left the country or were forced to leave during and after the Second World War, returned after independence.50 Even- tually, the country was left with a substantial number of ethnic Russians who did not have Latvian citizenship, the so-called non-citizens.51 For an extensive look at the citizenship issue, please refer to section 5.10.2 on page 133.

Company 1993, p. 56. 41 Ibid., p. 80 42 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, pp. 126-127. 43 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 204 and pp. 214-216. 44 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 131. 45 Interview R23. 46 Ibid. 47 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 222-224. 48 Ibid., p. 224. 49 A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, p. 405. 50 Ibid., p. 409. 51 Ibid., pp. 444-445. LATVIA AND THE EUROPEAN UNION 11

2.3.2 Current population Latvia is a country with a relatively small population. The country covers an area of around 64 600 km" and currently has 2 229 641 inhabitants.52 According to 2011 Eurostat data, Lat- via’s population can be divided by age as shown in Table 2.1.

Age Share in the total population in percentages (%) 0-14 years 13.7 15-24 years 13.9 25-49 years 35.9 50-64 years 19.1 65-79 years 13.3 80 years and over 4.1 Table 2.1: Distribution of the population by age group. 53

Another important demographic indicator is the division between men and women. In 2010 the number of women per 100 men was 116.7.54 The EU-27 average was 104.8 women per 100 men. Furthermore, Latvia has a low population density. In 2010, there were 36.0 inhabitants per km", while for the EU-27 the estimated average was 116.6 inhabitants per km".55

2.3.3 Ethnic composition Nowadays, Latvia can be seen as an ethnically diverse country. Table 2.2 below shows the ethnic composition of the Latvian population according to 2011 Latvijas Statistika data.

Ethnicity Share in the total population in percentages (%) All population 100 Latvians 62.1 Russians 26.9 Belarusians 3.3 Ukrainians 2.2 Poles 2.2 Lithuanians 1.2

52 Eurostat, ‘Population at 1 January, persons’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tps00001&plugin=1, consulted on 4 June 2012. 53 Eurostat, ‘People by age group, Share of total population (%)’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/refreshTableAction.do?tab=table&plugin=1&pcode=tps00010&language=e n, consulted on 4 June 2012. 54 Eurostat, ‘Women per 100 men’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tps00011&plugin=1, consulted on 4 June 2012. 55 Eurostat, ‘Population Density, inhabitants per km"’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tps00003&plugin=1, consulted on 4 June 2012. 12 LATVIA: AN OVERVIEW

Romanies 0.3 Jews 0.3 Germans 0.1 Estonians 0.1 other 1.3 Table 2.2: Distribution of the population by ethnicity. 56

2.3.4 Life expectancy of new-borns The life expectancy of new-borns lags behind the EU average. Although both male and female life expectancy show an increasing trend, they are still among the lowest in the EU.57 ‘In 2009 the average life expectancy of new-borns in the EU was 79.65 years, but in Latvia it was 73.28 years.’58 This means that the life expectancy of new-borns in the EU was about 6.4 years higher than that of new-borns in Latvia. According to data of Eurostat of 2010, the life expectancy of Latvian women was 78.4 years and of Latvian men only 68.6 years.59 This means that there is a gap between men and women of 9.8 years. Within the EU this gap exists as well, but the gender gap is approximately 6 years.60 The low life expectancy as well as the difference between men and women can be linked to an unhealthy lifestyle. Especially persons with a low income and low education have an unhealthy lifestyle (with smoking and alcohol consumption, low physical activity and unhealthy nutrition).61 Generally, Latvian men drink and smoke more than women, more of them commit suicide62 and they are harder to reach by public health promotion campaigns.63

56 Latvijas Statistika, ‘Population Census 2011 Key indicators’, retrieved from: http://www.csb.gov.lv/en/statistikas-temas/population-census-2011-key-indicators-33613.html,consulted on 18 March 2012 57 Z. Jakab (WHO), ‘Better Health for All in Latvia: The health strategy for the European Region (Health 2020) and the Latvian Public Health Strategy 2011–2017’, retrieved from: http://www.euro.who.int/__data/assets/pdf_file/0006/140496/Pres_better_health_Latvia_2011.pdf, consulted on 18 March 2012 58 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p.12, retrieved from http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 4 June 2012. 59 Eurostat, ‘Healthy life years and life expectancy at birth, by gender’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/refreshTableAction.do;jsessionid=9ea7d07d30f09116e0c59ac94c81bfd78a5 576ebc053.e34OaN8PchaTby0Lc3aNchuMbxiNe0?tab=table&plugin=1&pcode=tsdph100&language=en, consulted on 18 March 2012. 60 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p.12, retrieved from http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 4 June 2012. 61 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 13, retrieved from http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 18 March 2012. 62 Interview R15; interview R48. 63 Interview R15. LATVIA AND THE EUROPEAN UNION 13

2.3.5 Mortality rate In 2010 there were 13.4 deaths per 1 000 births.64 There is a relatively high mortality rate in Latvia. Of all Latvian men, 48 % dies before the age of 65, while the average morality rate at this age for the EU is 29 %.65 Next to diseases and unhealthy lifestyles, the high mortality rate can be explained by the economic recession, which caused stress and depressions, which in turn led to an increased number of suicides.66 The Latvian suicide rate is high. For Latvia, the death rate due to suicide per 100 000 inhabitants is 20.7, while for the EU-27 it is 10.3 (2009 figures).67 Latvia’s situation with regard to infant mortality is also bleak compared to other EU countries. According to Eurostat, the ratio of the number of deaths of children under one year compared to the number of births in 2009 was 7.8 deaths per 1 000 births. Compared to the EU-27 average of 4.2 deaths per 1 000 births in 2009, Latvia falls behind dramatically. The situation in 2010 showed a significant improvement, however: in that year there were 5.7 deaths of infants per 1 000 births.68

2.3.6 Fertility rate In 2009, the number of children per woman in Latvia was 1.31, compared to an EU-27 average of 1.59. A downward trend can be observed, and in 2010 the fertility rate dropped to 1.17 children per Latvian woman.69

2.3.7 Changes in population

Changes in population can occur due to natural changes70 and migration. With regard to the natural population change, Latvia’s ratio in 2010 was -4.833 per 1 000 inhabitants; a negative ratio, which indicates that there were more deaths than live births. For the EU-27 however,

64 National Health Service Latvia, ‘Iedz!vot#ji/Population’, 2010, p. 10, retrieved from: http://vec.gov.lv/uploads/files/4eaabcb92e89e.pdf, consulted on 11 June 2012. 65 Interview R48. 66 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 23, retrieved from http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 18 March 2012.; interview R48. 67 Eurostat, ‘Death due to suicide, by gender’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tps00122&plugin=1, consulted on 18 March 2012. 68 Eurostat, ‘Infant mortality per 1000 live births’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tps00027&plugin=1, consulted on 4 June 2012. 69 Eurostat, ‘Total fertility rate, number of children per women’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tsdde220&plugin=1, consulted on 4 June 2012. 1.1 70 Eurostat, ‘[tps00007] - Natural population change - Per 1 000 inhabitants’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/web/table/description.jsp, consulted on 4 June 2012. 14 LATVIA: AN OVERVIEW

there was a positive ratio in 2010, namely +1.029.71 Additionally, data have shown that in 2009, 2 688 persons immigrated to Latvia.72 How- ever, more people left the country: to be precise 7 388 Latvians migrated to other countries.73 More people leaving than entering the country, is a trend that is already on-going since the independence of 1991.74 Because of the recent economic crisis, up to 10 % of the Latvian labour force migrated to Great Britain, Ireland, Spain, and the United States.75

2.4 The European Latvian

The Latvians sometimes feel they can only rely on themselves, as if they stand alone in the world. They do not have tight connections with the Scandinavian countries, like Estonia has. Nor do they have a strong relationship with Poland, like the Lithuanians have, and they do not want to be associated with Russia. But what do they feel besides being just Latvian? Now they are a member of the European Union, do the Latvian people feel European? What is the biggest change resulting from Latvia's accession to the EU? What do they think of Latvia’s EU membership? And does the EU affect people’s daily life? These are the questions that we asked to all interviewees we spoke during our fieldwork in Latvia. The answers to these questions reflect what the impact of joining the EU has been on the lives of the Latvian people. This section presents some of the most poignant remarks expressed by our interviewees, and our general analysis of the total set of answers we received.

‘Of course we are European, we are not Chinese.’76 First of all, most Latvians feel primarily Latvian. Being Latvian may be their first and foremost identity, but this does not exclude them from having alternative identities. There is the general believe of having multiple identities as a Latvian citizen, because of the mixed population resulting from Latvia’s history. On a day-to-day basis, living in Latvia, they feel more Latvian than European. But when they travel, they feel more European. Referring back to the statement above, the Latvians do not see any other alternative of feeling something else. Geo- graphically, mentally and culturally they are in Europe.

1.2 71 Eurostat, ‘Natural population change, per 1 000 inhabitants’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tps00007&plugin=1, consulted on 4 June 2012. 72 Eurostat, ‘Immigration, persons’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tps00176&plugin=1, consulted on 4 June 2012. 73 Eurostat, ‘Emigration, persons’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tps00177&plugin=1, consulted on 4 June 2012. 74 T. Heleniak, ‘Country profile: Latvia Looks West, But Legacy of Soviets Remains’, retrieved from: http://www.migrationinformation.org/USfocus/display.cfm?ID=375, consulted on 11 June 2012. 75 Interview R52. 76 Interview D01. LATVIA AND THE EUROPEAN UNION 15

‘I am proud to be a European’77 Being part of Europe also feels like a confirmation of believing in the ethnic Latvian culture and identity, because being part of Europe means no suppression of the Latvian identity by Russia. Although feeling European, it is difficult to speak of one European culture as such. European countries are all so diverse. Therefore, the perspective on what is ‘European’ might differ from each member state. This does not mean they are referring to one European culture and identity, because ‘real Europe’, according to Latvians, is primarily perceived as the old European countries. It would be easier to feel European if people did not know to which country they belonged. But most Latvians are happy to feel connected with Europe.

‘If you are not free in your mind, you are not free within Europe, so let’s say I feel like a world citizen.’78 Besides the Latvian and European identity, many of our interviewees feel global. They feel comfortable as Latvians, Europeans and world citizens in a multicultural environment. They feel at ease with all these different identities, living happily in a borderless society. Our interviewees do not feel geographically restricted within the borders of Latvia. They realise that in a globalising world it is very important for the Latvians to understand that they belong to some bigger group of people. So our interviewees feel Latvian, European and global, and are at ease with having all these different identities.

‘We had the freedom to run away for the first time.’79 Besides gaining a stronger European identity, the biggest change resulting from Latvia's accession to the EU, according to the interviewees, is the freedom of movement. EU membership opened up Latvia’s borders, which is an especially great advantage for the younger generation. It is an opportunity to travel, study and work abroad and experience cultural exchange programmes. Approximately 250 000 Latvians (out of 2.2 million inhabitants) emigrated since Latvia joined the EU. This is a great challenge for Latvia in the long term. Especially young people study and work elsewhere in the EU now, which is seen as a major problem for Latvia’s future, as the population is ageing. A positive thing about the movement of so many Latvians is that during the economic crisis the unemployment rate decreased.

‘Hey, we just got out of the Soviet Union, what is going to happen now?’80 Another aspect after EU accession for Latvia was the availability of funds. Because Latvia is

77 Interview R25. 78 Interview R05. 79 Interview R03. 80 Interview R15. 16 LATVIA: AN OVERVIEW

part of the common market now, private investments and private capital are attracted. This has facilitated economic growth. European structural funds have also helped to develop Lat- via. But the economic situation is not just positive. Especially the older generation is concerned: prices are high and pensions are low. They do not really experience the advantages of membership because they do not have the opportunity to travel anymore. They feel like being part of a bigger system again can be a threat to the Latvian society. Being part of the EU means that having to compromise and sticking to EU directives. This is difficult for the older generation to accept.

‘Peace and security has sometimes been taken for granted and it is important that we realise that those things are wonderful and should never been forgotten. Only within a united Europe this can survive.’81 However, these same EU directives have brought greater stability and sustainability. The existence of an independent Latvian state, for example, has not been questioned since EU membership. This means a lot: safety and being a part of bigger structures. It is a way to ensure the survival of the Latvian state.

‘I don’t think that we could survive isolated.’82 It became clear to Latvian society that the EU is not just in Brussels but also in Riga. Plans can be initiated on a national level. The liberal way of thinking that comes with being a Mem- ber State is slowly finding its way into Latvia. Not just the way of thinking is an exchange between EU countries, but also an exchange of culture, knowledge, experience, transition, networks and information. The EU opened up the minds of the Latvian people to a broader perspective.

‘As many things done in Latvia, it was a good idea, badly implemented.’83 Most changes in Latvia relating to EU membership are perceived very positively. Most Latvi- ans see membership of the EU as a great benefit for the Latvian people because it brings more understanding about legal as well as economic issues. Besides, it brings a European way of thinking and attitude related to democracy, which has showed to achieve a lot in Western societies. Without the EU directives, Latvia wouldn’t be as far as it is, as it wouldn’t have had enough pressure to move in certain directions. Although sometimes these same directives and other conditions and regulations are seen as a bad thing about Latvia’s EU membership, this can also be ascribed to the wrong implementation of EU regulations.

81 Interview R12. 82 Interview R55. 83 Interview R19. LATVIA AND THE EUROPEAN UNION 17

‘EU membership was our only way, there is no other possibility.’84 EU membership is also perceived as a ‘brand’. Being part of the ‘brand’ Europe is like being part of the European family, which brings recognition and safety. It was the logic next step in the development of Latvia; the only right thing to do. It was also seen as the last hope for a bright future without Russia’s threats. 85

‘The impact of the EU is that I eat Dutch potatoes and watch Euronews every morn- ing.’86 For most Latvians, the effect of Latvia’s membership of the EU is not clearly visible in their daily life. They all notice the free movement without visa when they travel abroad, but otherwise it is difficult to notice on a day-to-day basis. Only people working for the EU or projects that receive EU funds give notice that they need to follow certain rules and directions. The impact of the EU is in this case mostly negative, because of the new bureaucracy and paperwork – which for some NGOs even leads to a loss of funds. The fact that the EU is not noticed does not necessarily mean it does not affect people’s daily life, as many rules and regulations are probably not generally known. However, almost all products in the supermarket are imported from other European countries, so the impact has been bigger than thought at first. The impact of the EU will be more visible when Latvia will introduce the euro, because then people will hold it in their hands every day.

In sum, EU membership is perceived very positively by our interviewees. Although there are some shortcomings and negative sides, most Latvians felt like there was no other option that would guide them through the transition period and help to further development. The feeling of being European will only get stronger with the introduction of the euro (planned for 2014) and Latvia’s presidency of the EU in 2015.

84 Interview R56. 85 Ibid. 86 Interview D06.

LATVIA AND THE EUROPEAN UNION 19

3. History

3.1 Introduction

Latvia’s history is marked by several dominations by foreign powers. Whether it be the Pope or neighbouring countries; all had some interest in Latvia. Latvia’s history started with the first settlers, who came to the region over eleven millennia ago. In the centuries that followed, several alliances were formed and broken, resulting in a history filled with wars, occupations and struggles for independence. Latvia’s independence was finally awarded in the beginning of the 20th century in 1918. Yet, this period of independence was short-lived and from 1940 until 1991, Latvia again became dominated by foreign powers. In the period between 1940-1941, Latvia was occupied by the Soviet Union, followed by a three year long occupation by Nazi-Germany from 1941-1944. In 1944, Latvia was subjected to the Soviet regime again, which lasted until 1991. Both the German and Soviet occupations had a harsh impact on Latvia and drastic consequences for the Latvian population, which suffered from severe repressions. Many people were killed or deported to Gulags in Siberia, others fled. A considerable number of them never returned. In 1991, Latvia regained its independence and various far-reaching changes followed, among others in Latvia’s economy and population composition.

3.2 Pre-modern history (9000 B.C. – 1200 A.D.)

Little is known of the pre-modern period, that stretches from 9000 B.C. until approximately 1200 A.D. However, some things can be said with certainty. Latvia is known to have been inhabited since 9000 B.C.1 and pre-Baltic tribes were the first to settle in the Baltic region approximately one century later.2 Already in the first centuries A.D., distinctions were made between these tribes. This differentiation led to several smaller regions, amongst them Kurzeme, Zemgale, and Lettgal- lia: regions that still exist in present-day Latvia (see Figure 3.1). Archaeological finds show that these first inhabitants were tall and powerful with light colours of eyes and hair; features that were still clearly visible mid-twentieth century.3 Additionally, the Latvian language and some of Latvia’s customs find their origin in this period.4 For more information about the Latvian language or Latvian customs, please refer to chapter 4. In pre-modern Latvia, agriculture was nearly impossible due to the ‘rocky terminal mo- raines, […] sandy areas, and […] marshes’5 that made up Latvian territory. In the first century

1 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 1. 2 Interview R57. 3 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p, 16. 4 Interview R57. 5 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 9. 20 HISTORY

A.D., amber was discovered in the Latvian swamps. Although in modern-day Latvia amber’s sole function is a symbolic one,6 its discovery was the beginning of a golden period,7 as amber became a valuable currency and created an opportunity to trade with foreign places.8 Until Latvia was recognised as an independent country early in the 20th century, the territory was divided in smaller regions. Some of these regions crossed modern-day borders. To portray Latvia’s history, we use the term ‘Latvia’ to describe the area within the borders of modern-day Latvia, even before it became an (independent) nation. Similarly, the term ‘Lat- vians’ describes the inhabitants of this region.

Figure 3.1: Tribes throughout the Baltic region, ca. 1210.9

3.3 German, Polish and Swedish rule (13th century – 18th century)

By the 12th century German merchants had been making regular stops in Latvia. In 1200 a German bishop attempted to Christianise the Baltic region.10 Although initially met with great opposition he succeeded in his mission.11 He set up a feudal system12 creating a German nobility to rule over the Latvian peasantry.

6 Interview R57. 7 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 6. 8 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, pp. 30-31. 9 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 4. 10 Ibid., p. 15. 11 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 65. 12 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 15. LATVIA AND THE EUROPEAN UNION 21

In the second half of the 12th century an economic agreement was made between the Germanic Hansa and Riga concerning the Baltic trade.13 Through the German nobility and the Hansa the German actors in Latvia gained in power and the German minority was able to make upward mobility impossible for non-Germans.14

3.3.1 Wars in Latvia In 1558 Russia started the Livonian War by invading Latvian territory and marching for Ri- ga.15 With no political leaders to turn to the Latvian inhabitants of the north of Latvia turned to Sweden for help, while the south of Latvia asked help from the Polish-Lithuanian Union.16 With this help Russia was beaten. The peace settlements that followed in 1582 and 1583 awarded northern Latvia to Sweden; southern Latvia would now be part of the Polish- Lithuanian Commonwealth.17 However, in 1600 the Polish-Swedish war over Latvian territory began18 which was won by Sweden in 1626. Sweden received all Latvian territory north of the Daugave river.19

Figure 3.2: Division of Latvian territory, ca. 1680.20

13 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, pp. 97-98. 14 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 19, 25-26. 15 Ibid., p. 36. 16 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 36-37. 17 Ibid., p. 37. 18 Ibid., p. 38. 19 Ibid., p. 45. 20 Ibid., p. 45. 22 HISTORY

The period between 1630 and 1700 was relatively peaceful in the Baltic region.21 At the end of the 17th century however, Poland and Russia became anxious of Swedish presence in the Baltic region.22 In 1700 both Russia, in cooperation with Germany, and Poland attacked Swe- dish territory.23 This war came to an end in 1721 with the Peace of Nystad, where Sweden was forced to cede the Baltic region to Russia.24 In 1772 and 1795 Russia obtained the rest of Latvian territory after an agreement with the Polish king.25 The division of Latvian territory had created a division in religion: in parts of the Polish- Lithuanian territory Catholicism was reintroduced as the state religion.26 In the rest of Latvia Protestantism, which came to the Baltic area in the beginning of the 16th century,27 prevailed. Although the regions were reunited under Russia in 1795, this division is still visible in modern-day Latvia (see also page 76).28 However, it has been asserted that the majority of the peasants stayed ‘pagan at heart’,29 performing non-Christian acts of worship at home.30 The pagan religion continued to play an important role in the lifes of the Latvian peasants.31

3.4 Russian reforms (18th – 20th century)

As Russia’s interest in the Baltic region was mainly directed towards its harbours, it often did not interfere with local or internal politics making it possible for the German Balts to regain control of the region.32 In practice, German law ruled Latvia.33 Towards the end of the 18th century the Latvian population had grown exponentially and had become increasingly dissatisfied with its living situation under the German Balts, leading to an uprising in 1802.34 In 1804 this led to the Agrarian Reform Bill.35 From that moment onwards the peasantry could no longer belong to a lord and therefore could not be sold.36 In further reforms in 1812 ‘peasants were liberated from serfdom but deprived of their farmlands, now declared to be property of the manors’,37 which belonged to the German squires. These squires became the symbol of injustice, an instrument for degradation and the cause of starvation.38 In 1861 the new Tsar Alexander II drafted the Reform Bill in Russia, which originally

21 Ibid., p. 197. 22 Ibid., p. 61. 23 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 199. 24 Ibid., pp. 202-204. 25 Ibid., pp. 210-212. 26 Andrejs Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 38. 27 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 113. 28 Interview R03. 29 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 32. 30 Ibid., p. 32. 31 Interview R57. 32 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, pp. 105-106. 33 Interview R03. 34 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 75-78. 35 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 222. 36 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 78. 37 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 225. 38 Ibid., p. 228. LATVIA AND THE EUROPEAN UNION 23 aimed to liberate the Russian serfs but was also implemented in parts of Latvia.39 With the new bill the gentry were obligated to sell half of their lands to the newly emancipated peasants.40 To make it possible for the peasants to buy land a Farmers’ Mortgage Bank was set up,41 since land could no longer be paid for with labour.42 With this bill, serfdom had officially come to and end in the whole of the Latvian territory.43

3.5 National awakening (1860 – 1920)

3.5.1 The awakening of the Latvian nation In the 1860s, serfdom was officially abolished and peasants were allowed to own land, but in practice, the day-to-day life of the Latvian peasants changed little.44 Dissatisfied, the Latvians challenged the distribution of power and demanded recognition of the Latvian nation.45 It was the beginning of the movement of the ‘National Awakening’.46 Similar movements with similar aims were set up in Estonia and Lithuania.47

3.5.2 The ‘National Awakening’ movement The National Awakening was not a coherent movement with a singular program.48 Its members had Russian, German and Latvian roots, which led to a lack of consensus as to what ‘the Latvian identity’ entailed.49 To create unison within the movement they emphasised the things they had in common and set them apart from others, such as the pagan religion and their ‘ha- tred for the Germans and a deep suspicion of the Russians.’50 As a reaction to the National Awakening the foreign powers increased their attempts to suppress the Latvian nationality. However, this backfired as it only increased the Latvians’ determination for a Latvian nation.51 The rise in Latvian nationalism, which was a result of the National Awakening’s efforts, led to a more self-confident attitude amongst the nationalists. Where assimilation with the Germans was previously seen as ‘climbing the social lad- der’, it now became heavily criticised and seen as abandoning the Latvian nation.52 Although the National Awakening was a small movement with little official power, they

39 Ibid., pp. 228-229. 40 Ibid., pp. 228-229. 41 Ibid., p. 229. 42 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 86. 43 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 229. 44 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 80. 45 Ibid., p. 80. 46 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, pp. 229-230. 47 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 89. 48 Ibid., pp. 91-92. 49 Ibid., pp. 92-94. 50 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 233. 51 Ibid., p. 233. 52 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 99. 24 HISTORY

reached a vast amount of people with their work.53 As a result of the National Awakening the Latvian people stopped ‘thinking of themselves as members of a peasant order […] speaking a peasant language’, and instead started to see ‘themselves as members of a nation that, with effort, could develop along the same lines as other cultures’.54 The Latvian language became an integral part of the Latvian culture and Latvian literature and music became entrenched in nationalism (see also sections 4.2.2 and 4.2.7).55

3.5.3 Radicalisation and politicisation Although the Latvians formed the majority of the inhabitants they had very little power,56 as many of the higher (political) functions were occupied by German Balts or Russians.57 As a sign of protest the Latvian factory workers laid down their tools for a day and joined in a peaceful marching demonstration which was brutally dispersed by the Russian police.58 A further radicalisation of the nationalists followed, which in 1904 led to the first illegal meeting of the Latvian Social Democratic Workers’ Party (LSDWP). The LSDWP called for general strikes, which involved violent actions directed against symbols of Baltic German landowner power.59 In 1905 the Russians, in an attempt to put down the strikes, proclaimed martial law.60 Three Russian army detachments, aided by the German Balts, marched into Latvia. It was the beginning of a ‘reign of terror’, which included the burning down of houses and farms. Sus- pects were hanged without trial and hostages were shot. The majority of the Latvian revolu- tionaries fled the country.61 However, the idea of Latvian self-determination grew amongst the Latvians.62

3.5.4 The First World War

During the First World War the Latvians were rounded up and forced to fight for the Rus- sians,63 composing approximately 80 % of the fighting units in the Baltic region.64 A great number of Latvians fled the war, until more than 27 % of the Latvian population was living in modern-day Russia.65 The Latvians hoped that a victory of the Allied forces, which included Russia, would bring democracy to the Baltic region. However, the Russian forces were

53 Ibid., pp. 92-94. 54 Ibid., pp. 92-94. 55 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 252. 56 Ibid., p. 259. 57 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 104-105. 58 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p 264. 59 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 104-105. 60 Ibid., p. 105. 61 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 268. 62 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 113. 63 Ibid., pp. 113-114. 64 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 276. 65 Ibid., p. 276. LATVIA AND THE EUROPEAN UNION 25 pushed back to Jelgava.66 There the Latvian fighters were able to hold off the German army. As a reward the Latvian forces were officially recognised in 1915, creating an official Latvian army, nicknamed ‘Latvian Rifles’.67 The creation of the Latvian army had far-reaching effects: through the army’s emblems and inscriptions the Latvian language was now officially recognised, as were the official Latvian colours (see also section 4.2.8).68 In 1917, the Latvian army still fought off the Germans in the west. The Russian fighters were hesitant to help as they were unwilling to fight for a country other than their own. The Russian soldiers were further demoralised by the crumbling down of the Tsarist regime. In Latvia a large number of houses, schools, churches and hospitals were burnt to the ground by both the Germans, in an attempt to win the war, and the Russians, so as to leave nothing to gain for the Germans. As a result the Latvian economy plummeted and the Latvian people started to strive for self-determination. 69

3.6 Latvian independence (1917 – 1940)

3.6.1 Latvian self-determination As the First World War continued, Germany conquered Riga, which led to a fragmentation of loyalties among the inhabitants of Latvia: to Germany, to the Russian Bolsheviks, which were very popular amongst the Latvians, and to Latvia. A first step towards Latvian independence was made in November 1917, when a Latvian National Assembly ‘proclaimed [the assembly] a provisional national council and announced that Latvia – consisting of Vidzeme (Livland), Kurzeme (Courland) and Latgale (Lettgallia) – was an autonomous unit in the Russian state, and that Latvia’s future would henceforth be determined by a constitutional assembly elected by the Latvian people.’70 At first the Latvians wanted to be a part of the new, democratic Russia that would arise if the Bolsheviks gained power. However, soon they realised that their own influence would still be minimal as the Bolsheviks did not share the Latvian vision of self-determination.71 There- fore, during the year 1918 the Latvian politicians shifted their support towards an independent Latvia.72 They continued on the road to independence by creating a provisional government, a Constitutional Assembly and local councils.73 On 18 November 1918 the independent State of Latvia was proclaimed while still under German occupation.74

66 Ibid., p. 276. 67 Ibid., pp. 276-277. 68 Ibid., p. 277. 69 Ibid., pp. 278-280. 70 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 115-117. 71 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 285 and p. 288. 72 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 117. 73 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, pp. 308-309. 74 Interview R03. 26 HISTORY

Figure 3.3: ‘Independent Latvia, ca. 1930’.75

3.6.2 Latvian War of Independence Even though the Latvian independence was well underway, the Latvian National Council still relied on the German troops and German Balts to protect them from the Bolsheviks,76 who wished to include the Baltic region in their new Soviet Union.77 In the meantime, Germany wished to create a certain buffer zone between itself and the Bolsheviks in Russia.78 The Latvians were able to fight off both the Germans and the Russians.79 By November 1919 the Germans had withdrawn out of Latvia and in 1920 the Bolsheviks too were forced to withdraw.80 This Latvian-Soviet armistice led to a peace treaty in which the Bolshevik Soviet Union officially recognised the Latvian independence81 and ‘renounced voluntarily and forever all sovereign rights, possessed by Russia, over the Baltic people and their territory.’82

75 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 114. 76 Ibid., pp. 119-120. 77 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p 310. 78 Ibid., p. 318. 79 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 119-120. 80 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, pp. 327-328. 81 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 119-120. 82 H.A. Grant Watson, The Latvian Republic: The Struggle for Freedom, George Allen & Unwin Ltd, London: 1965, p. 87. LATVIA AND THE EUROPEAN UNION 27

3.6.3 Politics The first elections of April 1920 led to a freely elected Latvian Constituent Assembly of 150 members. The president of the Assembly was J#nis $akste, and K#rlis Ulmanis was chosen as prime minister.83 The ‘extreme taste for egalitarianism’ amongst the Latvian population had resulted in an ultra-liberal government.84 The political parties in place were reasonably experienced in debate and were fairly organised.85 Furthermore, they could make use of the gained experience and the political and administrative machinery they had set up in the previous three years while they were paving the way for democracy.86 The four elections that were held in the period of independence generally had high turn- outs, with the voters spread out over the whole political spectrum.87 As no party obtained an absolute majority they were forced to cooperate and form a coalition.88 Since it was hard to achieve common ground,89 these coalitions were often short-term. Therefore, the 16-year period between 1918 and 1934 saw 18 cabinets.90

3.6.4 Rebuilding the country The War of Liberation had left the provisional government with high debts to the Allied forces and had cost the country a great number of people.91 The Latvian industry had become par- alysed, a quarter of the farmland had been destroyed and the Latvian economy had collapsed.92 To rebuild the country the provisional government first ensured a new and secure currency. Second, they solved the landlessness of the majority of the remaining population by issuing the Agrarian Reforms of 1920.93 These reforms included the nationalisation of privately held rural properties, which mostly belonged to the German Balts, and redistribution amongst the Latvian people to increase the political stability in the region.94 The economic problems of the country increased further because the decisions made by the parties only focussed on the short term. Consumer goods were often too expensive for the majority of the population and the inefficient agrarian sector worsened the situation.95 On the

83 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 333. 84 Ibid., p. 336. 85 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 122. 86 Ibid., pp. 122-123. 87 Ibid., p. 129. 88 Interview D03. 89 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 127-129. 90 Interview D03. 91 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 330. 92 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 122-123. 93 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 334. 94 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 124-126. 95 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, pp. 353-354. 28 HISTORY

whole, the post-war period in Latvia was characterised by economic depression.96

3.6.5 Authoritarianism As the worldwide economic depression of the early 1930s hit Latvia, many people lost their faith in the parliament which consisted of opposing political parties.97 New elections led to twenty-four political parties in the parliament which could only result in ‘confusion, corruption and compromise’.98 The plethora of political parties and diverging political views in 1934, even within the parliament,99 increased the threat of a civil war considerably. As a response to national unrest Ulmanis launched a peaceful coup on 15 May 1934.100 Although Ulmanis was an authoritarian leader he was considered to be a moderate one101 and he was very popular amongst the Latvian population, who found the political instability ‘unacceptable’.102 In the same period similar political changes took place in the neighbouring countries Estonia and Lithuania.103

3.6.6 Foreign relations of independent Latvia During the first period of independence Latvia’s foreign relations played a major role in its politics. When Latvia joined the League of Nations in 1921 and became internationally recognised as an independent country, the country decided to take a neutral stance in international politics.104 Furthermore, Latvia’s government wished to keep good relations with Russia as they hoped to increase trade with their eastern neighbour. In hopes of becoming a ‘transit state’, the Latvians rebuilt their ports and agreed on favourable taxes with the Russians.105 The relationship between the West and Latvia, however, began strained as many countries in 1918 saw all Latvian political activists as Bolsheviks and the western governments wished for Rus- sia to remain undivided.106

96 Country Watch, ‘Latvia Country Review’, 2011, pp. 8-9, retrieved from: http://web.ebscohost.com/ehost/detail?sid=7813a65d-8ce6-474c-bb88- 9cde0408aa32%40sessionmgr110&vid=1&hid=125&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3D%3D#db=buh& jid=DVX, consulted on 7 February 2012. 97 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 133. 98 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 355. 99 V Stanley Vardys, ‘The Rise of Authoritarian Rule in the Baltic States’, in: V. Stanley Vardys & Romuald J. Misiunas, eds., The Baltic States in Peace and War 1917-1945, The Pennsylvania State University Press, Lon- don: 1978, p. 67. 100 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, p. 133. 101 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 360. 102 Interview D03. 103 V Stanley Vardys, ‘The Rise of Authoritarian Rule in the Baltic States’, in: V. Stanley Vardys & Romuald J. Misiunas, eds., The Baltic States in Peace and War 1917-1945, The Pennsylvania State University Press, London: 1978, pp. 68-74. 104 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 138-139. 105 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 339. 106 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 138-139. LATVIA AND THE EUROPEAN UNION 29

The Baltic states cooperated on several topics such as economy.107 However, no military cooperation was agreed upon. As each country was posed with a different threat of a different magnitude they could not agree upon who would best serve to protect them from invasion: Russia, Germany or Poland. As a result, each country developed its own plan of action in case of an attack. These plans did not complement each other, often leaving gaps in the defence system of the neighbouring countries. This became clear in 1940 when the Baltic leaders could only stand idly by as the Soviet Union invaded their countries.108

3.6.7 Current views on the first independence period After Latvia regained independence in 1991 people reflected upon this first period of independence with great nostalgia.109 It was a period with great equality that granted freedoms to minorities and knew no ethnic conflicts.110 It became an example where institutions were re- established and the constitution of 1922 was put into effect.111 However, the people that re- membered the first period of independence grew up under Ulmanis’ authoritarian regime112 and the memories did not refer to the ‘real historical situation, but some myths and some visions they had about the period’.113 These myths were kept alive due to the censorship under the Soviet regime.114 After 20 years of independence since 1991, the first period of independence has lost its mythical air: people confused the stability of the authoritarian regime for democracy. Today, Latvia faces similar problems as it did in the interwar period such as the financial problems that followed the worldwide economic crisis (see page 246).115 Furthermore, many Latvians are challenged by the fact that they are now responsible for their own happiness: there is free choice in life and the political leaders, whether you agree with them or not, are chosen by the Latvian people. Considering life under the Soviet regime, where one could simply follow orders in return for work, health care, stability and security, many now feel nostalgic towards this period.116

3.7 Soviet occupation (1940 – 1941)

Latvia’s decades of independence came to an end when the Soviet Union took control of the

107 A. Bilmanis, A History of Latvia, Princeton: Princeton University Press 1951, p. 340. 108 Edgar Anderson, ‘The Baltic Entente: Phantom or Reality?’, in: V. Stanley Vardys & Romuald J. Misiunas, eds., The Baltic States in Peace and War 1917-1945, The Pennsylvania State University Press, London: 1978, pp. 129-135. 109 Interview D03. 110 Ibid. 111 Interview R03. 112 Ibid. 113 Interview R23. 114 Interview D03. 115 Interview R03. 116 Interview D03. 30 HISTORY

country in 1940.117 The intention of the Soviet Union to occupy Latvia was secretly expressed one year earlier, in 1939, when the Molotov-Ribbentrop agreement was signed.118 This agreement was reached between the Soviet Union and Nazi Germany119 and essentially entailed that the two powers would not proceed to mutual violent acts.120 In addition, the agreement also contained secret arrangements concerning the territorial division of the Baltic countries. According to these arrangements Nazi Germany would occupy Lithuania, and Latvia and Estonia would be placed under Soviet dominance.121 Alterations in the agreement slightly changed this division and later Lithuania was also ‘assigned’ to the Soviet Union.122 This Pact was very decisive for the future of Latvia and Europe as a whole, as it disrupted Latvia’s independence for five decades and allowed Hitler to freely march into Europe without the threat of being attacked from the east.123 Latvia as well as the other Baltic states had stated to be neutral in the Second World War,124 yet the so-called ‘Pact of Defence and Mutual Assistance’, which Latvia ‘agreed’ upon with the Soviet Union in 1939, undid this neutrality.125 It has been established that the aforementioned Pact was signed under pressure exerted by the Soviet Union.126 In essence, this Pact recognised Latvia’s independence, but it did enhance Soviet control in the country by allowing for a considerable Soviet military deployment127 of approximately 25 000 Soviet soldiers128 as well as the creation of various Soviet marine headquarters in Latvia.129 Soviet influence in Latvia increased even more after the Soviet Union accused Latvia and the other Baltic states of not acting in line with the aforementioned Pact. To reduce the tensions and avoid a military confrontation, Latvia and the other Baltic states accepted the additional demands made by the Soviet Union in June 1940, such as ‘the formation of govern-

117 Country Watch, ‘Latvia Country Review’, 2011, p. 9, retrieved from: http://web.ebscohost.com/ehost/detail?sid=7813a65d-8ce6-474c-bb88- 9cde0408aa32%40sessionmgr110&vid=1&hid=125&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3D%3D#db=buh& jid=DVX. 118 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 15. 119 Ibid., p. 15. 120 A. Plakans, A Concise History of the Baltic States, Cambridge: Cambridge University Press 2011, p. 336. 121 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 15. 122 A. E. Senn, ‘Perestroika in Lithuanian Historiography: The Molotov-Ribbentrop Pact’, the Russia Review, no. 1 (1990), p. 43. 123 Interview R60. 124 Ibid. 125 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 15. 126 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, pp. 110-111. 127 Ungarisches Institut, ‘Pact of Mutual assistance between the Republic of Latvia and the Union of Soviet So- cialist Republics. Signed at Moscow, October 5th, 1939’, Year unknown, pp. 1-2, retrieved from: http://www.forost.ungarisches-institut.de/pdf/19391005-1.pdf. 128 Interview R60. 129 Ungarisches Institut, ‘Pact of Mutual assistance between the Republic of Latvia and the Union of Soviet So- cialist Republics. Signed at Moscow, October 5th, 1939’. Year unknown, pp. 1-2, retrieved from: http://www.forost.ungarisches-institut.de/pdf/19391005-1.pdf. LATVIA AND THE EUROPEAN UNION 31 ments capable of carrying out the pacts with the USSR and the introduction of unlimited additional Soviet military and naval units.’130 These additional demands drastically increased So- viet influence and control in Latvia.131 Soviet dominance in Latvia soon led to the imposition of changes in various governmental, political, and administrative segments of society.132 For instance, a Soviet-oriented ‘people’s government’ was formed133 and a substantial number of mayors and prominent com- manding officers of the police forces were fired and replaced.134 The Soviet-imposed changes are also referred to as Sovietisation.135 The Sovietisation of Latvia was soon followed by Lat- via officially becoming a republic of the Soviet Union on 5 August 1940.136 Apart from the governmental and political changes, the Sovietisation process also influenced Latvia’s economy. Expropriation and confiscation of private property such as factories, restaurants and houses became very common.137 The Russian currency, the ruble, was introduced in Latvia, and agriculture was increasingly collectivised.138 In addition, the educational system was placed under Soviet control, leading to the inclusion and exclusion of certain nationalist books and writers.139 History courses and historiography as such were placed under state control and censorship.140 One interesting example of this control is the description of the events surrounding the occupation of Latvia in 1940. According to the Soviet version of history, this occupation was described as a socialist revolution after which the Latvian citizens wanted to join the Soviet Union and supported the communist regime that followed.141 The Soviet regime in Latvia was soon accompanied by violence. Secret instructions were published concerning the ‘expulsion of Anti-Soviet Elements from Lithuania, Latvia and Es- tonia’. These instructions envisaged the removal of all ‘alien elements – members of non- communist organisations, policemen, owners of plants, officers, government employees and their families’142 from Latvia and the other Baltic states. In June 1941, the Soviet regime began deporting Baltic citizens on a large scale.143 On 14

130 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 19. 131 Ibid., pp. 19-20. 132 Ibid., pp. 20-30. 133 L. Mcdowell, ‘Cultural memory, gender and age: young Latvian woman’s narrative memories of war-time Europe, 1944-1947’, Journal of Historical Geography, no. 4 (2004), p. 709. 134 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 24-25. 135 Ibid., p. 25 and p. 28. 136 Ibid., p. 29. 137 Ibid., pp. 31-33. 138 Ibid., p. 32 and p. 36. 139 Ibid., pp. 36-37. 140 Interview R23. 141 Interview R46. 142 R. Munz and Rainer Ohliger, Diasporas and Ethnic Migrants: Germany, Israel and Russia in Comparative Perspective, London: Frank Cass Publishers 2003, p. 207. 143 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 39-40. 32 HISTORY

June 1941 for example, over 15 000 Latvians became the victim of deportations144 to Gulags (‘prison camps’ and ‘forced settlements’),145 located mainly in Siberia.146 This deportation in 1941 is the first of the two mass deportations that took place under the Soviet regime. During the first mass deportation families were separated and men were sent to the prison camps. The women, children and the elderly were sent to so-called ‘special’ or ‘forced settlements’,147 which were located at farms in Siberia.148 In general the main group that was targeted was Latvia’s social elite, such as writers or publishers.149 During the short period of Soviet dominance from 1940 to 1941, approximately 35 000 Latvians lost their lives due to, among others, deportation and execution. These violent acts caused fear and increased detestation and popular opposition to the Soviet regime.150

3.8 German occupation (1941 – 1944)

Despite the Molotov-Ribbentrop Pact, Nazi Germany attacked the Soviet Union in June 1941. Although the German army was confronted with a massive Soviet army, the Soviet army hardly counterattacked the Germans and as a result Nazi Germany was able to quite easily take over Latvia. During this attack, only a minimal number of Latvian victims were made.151 In the Baltics, a large proportion of the citizens sided with Nazi Germany and established guerrilla movements to fight the Soviet soldiers as well.152 Eventually, in July 1941, Nazi- Germany managed to occupy Latvia.153 Initially, the Baltic citizens did not oppose the German occupation. On the one hand, this attitude was caused by the harsh experiences the citizens had had with the Soviet regime in the years before. On the other hand, there was a believe that German ‘liberation’ from the Soviet Union would allow an opportunity for Latvia’s re-establishment of independence.154 However, this optimism was soon tampered by the awareness that Nazi Germany had other plans for the Baltic region, not including independence: ‘It is quite clear from the documents in German archives that the long-range goal of the Nazi leadership was to annex the Baltic region to the Reich, to expel two-thirds of the population,

144 Interview D03. 145 V. Nollendorfs, Museum of the occupation of Latvia, Latvia: Latvijas Okupacijas muzeja biedriba 2008, p. 57. 146 Interview R03. 147 Ibid. 148 V. Nollendorfs, Museum of the occupation of Latvia, Latvia: Latvijas Okupacijas muzeja biedriba 2008, p. 107. 149 Interview D03. 150 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 42-43. 151 Interview R03. 152 A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, p. 348. 153 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 45. 154 Ibid., p. 46. LATVIA AND THE EUROPEAN UNION 33 and to fuse the remainder gradually with German immigrants’.155 The dominance of Nazi Germany was gradually becoming more noticeable in various spheres of Latvian society. For instance, Latvia was placed under German governmental rule156 and the education system was also strictly controlled by Germany, as solely German- approved schoolbooks were allowed. Even the Latvian Riga University was closed for a short period of time.157 Furthermore, the concept of ‘German youth labour force’ was introduced in University institutions. Participation in this labour force was compulsory and from 1942 to 1943 over 4 000 Latvian University students were registered to perform various labour activities. Nazi Germany also established quota regarding the number of Latvian citizens who were sent off to Germany, either for military duties or forced employment.158 As in many other countries, Nazi Germany placed a specific focus on the extermination of the Jewish population in the Baltic states, and the so-called German-deployed Einsatzgrup- pen were groups specifically operating to execute the Jews.159 According to the 1935 census, approximately 93 000 Jews were established in Latvia before the Second World War. A large majority of these citizens, approximately 73 000, was killed during the German regime. The other 20 000 managed to survive because they were placed in western European concentration camps or had already been deported to other locations during the Soviet regime. Others survived because they were recruited by the Soviet army or managed to escape by themselves. Within the territory of Latvia, approximately 400 Jewish citizens managed to survive.160 The system that was employed to exterminate the Jews was as follows: a large part of the Jews died through executions on the spot, others were resettled to specific locations. For instance in Riga, Daugavpils and Liepaja, so-called ghettos were created where all the Jews were placed together. Another part of the Jewish population was imprisoned in concentration camps, such as the Kaiserwald concentration camp in Riga. It has been emphasised that the concentration camps and ghettos were ‘tools of slow murder’ for the Jews.161 It must be noted that a part of the Baltic citizens did facilitate the German extermination process, as some cooperated with and in it.162 Multiple historians have stated that a distinction needs to be made between the direct act of killing the Jewish population and assisting the Na- zi German army in general.163 For instance, the Latvian regular police forces collaborated through transporting Jewish citizens to certain extermination places in Latvia. In addition, the Latvian Arajs commando, which consisted of a couple of hundred volunteers, was actively

155 Ibid., p. 49. 156 Ibid., pp. 50-52. 157 Ibid., p. 54. 158 Ibid., pp. 55-56. 159 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, pp. 117-118. 160 Interview R23. 161 Ibid. 162 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, pp. 118. 163 Interview R03; Interview R23. 34 HISTORY

involved in the killing of Jewish citizens.164 The Arajs commando evidently had as their goal to cleanse the Jewish population in Latvia.165 It has been suggested that in total approximately 1 000 Latvians were involved in the direct extermination of Jews.166 In addition to this direct involvement, there was also a large passive part in society who was aware of the events, but kept silent and did not protest against these acts, perhaps out of fear of their own fate or the lack of protesting experiences.167 Finally, an estimate of 200 Latvians participated actively in rescuing the Jewish citizens in Latvia.168 Overall, German occupation of Latvia led to a drastic decrease of the Latvian population. It is estimated that 120 000 Latvians (including the Jewish citizens) became the victims of expulsion or execution.169

3.9 Soviet occupation (1944 – 1991)

3.9.1 Re-occupation and Russification Severe battles between Nazi-Germany and the Soviet Union during the Second World War led to Latvia’s renewed subjection to the Soviet regime on 13 October 1944.170 The reestablishment of Soviet dominance was a so-called ‘nightmare for the Baltic populations’171 as it was soon combined with new repressions of a considerable part of the Latvian population, among others because they were perceived as pro-German172 or ‘enemies of the people’.173 One of the overarching reasons that the Latvian nation as such ‘received the return of the So- viet army as the end of the world’,174 was because the Russian authorities and military were not familiar with laws and legislation, and therefore were more easily inclined to commit crimes against the citizens, even if they were ethnic Russians. The extent to which an act was perceived as punishable changed according to state necessity in those times175 and that made the regime unpredictable. Fairly soon after re-occupation, a Soviet controlled department was placed in Latvia to control the country on a national level176 and the Latvian Communist Party was also re- established. The lack of will of the population to participate in the Party led to the importing

164 Interview R03. 165 Interview R23. 166 Interview R60. 167 Interview D03. 168 Interview R60. 169 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 56. 170 Ibid., p. 71. 171 Ibid., p. 70. 172 Ibid., p. 71 and p. 73. 173 Ibid., p. 78. 174 Interview R03. 175 Ibid. 176 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 76. LATVIA AND THE EUROPEAN UNION 35 of approximately 9 000 Communists from various origins to Latvia in order to join the Com- munist Party.177 Although the Latvian population opposed the Communist Party initially, slowly the support for the Communist Party increased among the Latvians, among other reasons because membership created economic opportunities and decreased the threat of being deported.178 Soviet control over Latvia was also accompanied by drastic economic changes,179 namely modernisation and industrialisation. This process of industrialisation was forced by the Soviet regime, without an actual need for it in the Latvian society.180 These changes had major implications for the country in terms of population and environment. For instance, an immigration wave from the Soviet Union to Latvia commenced and the immigrants were massively employed in the newly created factories.181 Although the industrialisation led to increased production in Latvia and a slight improvement in the general standard of living of the population,182 the immigration waves threatened the future of the ethnic Latvian population as such. By 1979, just 38.3 % of all people living in Latvia’s capital were ethnic Latvians.183 It has been asserted that the increasing presence of immigrants was unfortunate for the population balance and resulted in ‘social pressure’, as there were not enough apartments available. This lack of living space was and continued to be a serious problem in Latvia.184 The transformation of the Baltic states in line with the process of Sovietisation also had a great impact on agriculture. To restrict the possession of large private property, the policy of collectivisation was introduced. Already in 1946, the so-called ‘collective farms’ were established in Latvia and although the process of collectivisation was not welcomed or supported by most farmers, high taxes and the threat of deportation usually forced the farmers to participate in it.185 This collectivisation policy was one of the reasons for the Soviet regime to commence its second mass deportation in 1949, when over 40 000 Latvians were deported to Si- beria within a couple of days. The group that was mainly targeted by this deportation were the farmers, as this was the prime group that objected this policy. Another group that became the victim of this deportation were people who appeared to be disloyal to the Soviet regime in general. In contrast to the first mass deportation, the men, women, children and elderly were

177 Ibid., p. 80. 178 Ibid., p. 83. 179 Country Watch, ‘Latvia Country Review’, 2011, p. 9, retrieved from: http://web.ebscohost.com/ehost/detail?sid=7813a65d-8ce6-474c-bb88- 9cde0408aa32%40sessionmgr110&vid=1&hid=125&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3D%3D#db=buh& jid=DVX. 180 Interview R60. 181 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, pp. 126-127. 182 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 113 and p. 185. 183 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 131. 184 Interview R60. 185 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 98-99. 36 HISTORY

not separated. Also, some of the deported Latvian citizens continued their life quite contently while imprisoned in the Gulags. Some of them were united with their loved ones or met their future partners there. Even children were born sometimes.186 Between 1944 and 1952 approximately 136 000 Latvian farmers were sent to the Siberian camps187 and by the end of 1951 the Latvian agricultural property was almost entirely collectivised.188 The Soviet regime also brought changes to the educational system. Soon after reoccupation, the Baltic schools were opened again. However, to assure that lecturers provided for proper (pro-Soviet) education, teachers were, among others, imported from other Soviet republics or received additional Soviet schooling. Education facilities were expanded as a means to spread the Soviet ideology, and so-called ‘indoctrination courses’ were increasingly common.189 The state control over history once again became apparent in the way in which the Nazi regime was described in history textbooks. For example, in the Soviet version of history there is no mention of the Holocaust. Yet, there is mention of numerous Soviet citizens being murdered during the Nazi regime. It has been asserted that the reason behind this exclusion of the Holocaust was that in the Soviet regime there was no division of people into groups, but all people were simply considered ‘Soviet people’.190 Another reason for this exclusion of the Holocaust might be the fact that the Soviet regime as such was unofficially anti-Semitic as well. For instance, there were unofficial quotas established concerning the number of Jewish students who were to be allowed in universities.191 Overall, the process of Russification (i.e. ‘the process whereby non-Russians are transformed objectively and psychologically into Russians’192) was very much apparent in the description of historical events, where history was reformulated to suit the Soviet system.193 The Soviet occupation and policies caused opposition among the Baltic population, even if opposing the regime could have fatal consequences. One form of resistance were the rebel- lious movements in the Baltic countries, also referred to as the ‘Forest Brothers’.194 These movements were located in the forests throughout the Baltic states and consisted of various people: from those wanting to re-establish national independence to those fleeing as they

186 Interview D03. 187 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, pp. 129-130. 188 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 102-103. 189 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 114-115. 190 Interview R46. 191 Interview R60. 192 P. Dostál and Hans Knippenberg, ‘Russifictation of Soviet nationalities: the importance of territorial autonomy’, History of European Ideas, no. 4-6 (1992) p. 632. 193 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 118-119. 194 Ibid., p. 83. LATVIA AND THE EUROPEAN UNION 37 feared the consequences of being perceived as collaborators during the German occupation. Opposition to the oppressive Soviet regime and ‘patriotic idealism’ were supposedly the main reasons behind the establishment of such movements.195 Their main activities consisted of promoting national symbols or performing violent actions towards Soviet-controlled buildings.196 It is estimated that the Forest Brotherhood of Latvia consisted of approximately 40 000 citizens.197 The existence of this resistance movement was the other main reason behind the mass deportation in 1949. As the Forest Brotherhood was mainly located in the countryside and the farmers were helping the Brotherhood, the regime perceived deportations as an effective means to break (the support for) the resistance movement.198 Eventually, the Latvian Brother- hood and its actions came to an end during the period of 1949 – 1950.199

3.9.2 ‘Thaw’ (1953 – 1964) Stalin’s death in 1953 and consequently the manifestation of the new Soviet leader Khrush- chev resulted in various changes for the Baltic states. Khrushchev’s policy was based on the so-called ‘general relaxation (“Thaw”) in Soviet life’200 and led to, among others, the substitu- tion of Russian highly placed officials by citizens with Baltic origin.201 Moreover, Khrushchev’s relaxation allowed for more national autonomy in the individual Soviet republics. For instance, the Baltic states were allowed to outline ‘their own legal codes within a general all-union framework.’202 Also, special councils were set up in each republic to allow them to make economic plans suiting their national economy.203 In addition, the agricultural laws were also more ‘relaxed’ and, contrary to Stalinist rule, farmers were allowed to, among others, purchase and hold private machines on the communal farms.204 Finally, cultural relaxation was also allowed, i.e. several Latvian writers, who were deported during Stalinist 205 rule, were allowed to return to their home country and publish their work. Generally, this period of Thaw was experienced as ‘promising’206 and ‘liberalisation’.207 However, the wave of autonomy was soon ended when the so-called ‘Latvian purge’ commenced in 1959.208 It has been suggested that the Thaw ended after a visit of Khrushchev

195 Ibid., p. 84. 196 Ibid., p. 90. 197 Ibid., p. 85. 198 Interview R60. 199 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 91-93. 200 Ibid., p. 131. 201 Ibid., pp. 131-132. 202 Ibid., p. 134. 203 Ibid., pp. 134-135. 204 Ibid., p. 139. 205 Ibid., pp. 151-153. 206 Interview R60. 207 Interview R23. 208 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & 38 HISTORY

to Latvia, when he was informed that a number of Latvians who were part of the Communist Party were ‘national’ or ‘ideal’ communists who resisted the Russian influence in Latvia.209 Essentially, the rationale behind such a purge was the ‘appearance’ of nationalistic tendencies among some members of the Latvian Communist Party.210 Therefore, a large number of the Latvian highly placed officials, who had pro-Latvia ideas, were removed from their positions.211 These officials were replaced by e.g. Latvians who were imprisoned or expelled to Russia during Stalin’s leadership and therefore were highly unfamiliar with the Latvian language for instance.212 Following the purge, several projects were organised in the 1960s as part of a larger ‘anti- nationalism campaign’ to stimulate more cooperation between all republics. This cooperation was realised through common road building for instance. The campaign also focused on encouraging the promotion of Russia through a pro-Russian portrayal of the ‘positive’ historical relationship between Russia and the Baltic states.213

3.9.3 Contradicting changes: 1968 – 1980 Khrushchev’s leadership came to an end in 1964.214 Throughout the subsequent period (1968 – 1980) the Baltic states went through various contradicting changes, which illustrated both a firm dominance as well as relaxation of Soviet control over Latvia. On the one hand, the So- viet Union firmly controlled the political and economic systems and policies.215 For instance, Khrushchev’s so-called ‘economic councils’ were closed down immediately after his reign, limiting the sovereignty of the individual republics as regards economy.216 Moreover, Soviet dominance continued to be apparent through the relatively high number of Russian and other non-Latvian citizens who were placed in high-ranking positions throughout the Latvian state structure – outnumbering the ethnic Latvian employees by far.217 In addition, labour shortages resulted in massive immigration waves from Russia to Latvia, which increased Soviet demographic control in the country.218 Also, cultural sovereignty was largely prohibited: in Latvia, several authors were accused for their ‘intolerable’ literature and certain theatre productions were prohibited for the same reason.219 On the other hand, in certain aspects the Soviet control relaxed during this period. One of

Company 1993, pp. 140-145. 209 Interview R60. 210 A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, p. 373. 211 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 140-145 212 Interview R60. 213 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 172-174. 214 Ibid., p. 150. 215 Ibid., p. 204. 216 Ibid., pp. 227-229. 217 Ibid., pp. 206-207. 218 Ibid., p. 204 and pp. 214-216. 219 Ibid., pp. 245-246. LATVIA AND THE EUROPEAN UNION 39 the explanations for the slight relaxation in the oppressive state system was the proliferation of ‘consumerism’ in Latvian society.220 The idea of consumerism and the ‘emphasis on material goods for private use (or even group) consumption went against the official interpretation of Marxism’221 and thus one of the fundaments of the Soviet ideology. However, as the earnings of the Latvian citizens were increasing, they could afford more and various goods, from automobiles to luxurious food products.222 Moreover, a new form of substantial economic independence was established through the introduction of the western concept of ‘self-management’.223 This ‘involved relative administrative autonomy, financial self-dependence (and hence need for profitability), and tying of worker’s incomes to the enterprise’s profits.’224 Agriculture also flourished due to the introduction of the concept of self-management and the decrease of restrictive impositions regarding farmers. In essence the Soviet regime did not favour individual agricultural activities, but in view of the food scarcity so-called ‘private farming’ was increasingly accepted by the system.225 In addition, the influence from the West on Latvian society and culture increased, as well as the communication possibilities with the outside world.226 Travelling outside the Baltics was becoming more common, even though the regime controlled this process by repeatedly denying travel permissions. Furthermore, there was an increase in the number of visitors from the West. The Western influence on Baltic society and culture was further increased through the availability of western literature, movies and radio, which partially substituted the imposed Soviet or Russian culture during the 1970s.227 At the same time, the 1970s also marked a new period of the Russification process in Latvia. The new Russification tendency was mostly focused on firmly embedding and expanding the Russian language in the Baltic society, especially in the educational system and media.228 This was accompanied by the promotion of military activities in school as a means 229 to prepare the male students for their military service. Overall, this Russification policy ‘may have been perceived in the Baltic republics as a threat to the national cultures and thus have contributed a stimulus to their development as well as to dissent’.230 Throughout the 1960s and 1970s minor expressions of resistance to the Soviet regime came to the fore, such as the unwillingness of citizens to express themselves in the Russian

220 Ibid., p. 209. 221 Ibid., p. 210. 222 Ibid., pp. 209-210. 223 Ibid., p. 229. 224 Ibid., p. 229. 225 Ibid., pp. 230-232. 226 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 204. 227 Ibid., pp. 242-244. 228 Ibid., pp. 211-212. 229 Ibid., p. 226. 230 Ibid., p. 211. 40 HISTORY

language or through the placement of flowers at the independence monument in Riga.231 However, as a younger generation was replacing the older Latvian generation, memories of the Latvian independence as well as the oppressive Stalinist regime were slowly fading away. This diminished the fear and submissiveness of the youngsters to the Soviet regime, especially as the ruthless punishments like during the Stalinist regime were less common.232 Also international pressure from, among others, the U.S. had a large impact on the easement of the regime.233 In addition, the relaxation policy of the previous Soviet leader Khrushchev had created room for nationalistic tendencies, which soon resulted in even more massive resistance to the system.234 One form of opposition came by letters. In 1972, a group of ‘long-serving Latvian communists’ demonstrated their opposition to the oppressive regime by sending a letter to Soviet and Western countries in which they openly expressed their disapproval. This letter was particularly important as it managed to escape Soviet censorship and arrive in western Europe.235 Other letters and pamphlets, expressing opposition to the Soviet regime, illustrated the gradual establishment of various dissent movements in Latvia, such as the Latvian Inde- pendence Movement, the Organisation for Latvia’s Independence,236 and NGOs for human rights, for example.237 There was also opposition among the Jewish population in Latvia. The main aim of their opposition was to acquire the right of freedom of emigration, culture and religion.238 These nationalistic tendencies challenged the Soviet regime, which still strived to establish ‘a Soviet national identity’.239 Moreover, holding on to the Baltic region was particularly important for the Soviet Union from a military point of view,240 because Latvia as such continued to be highly militarised with a large presence of Soviet soldiers and military bases on its soil.241 Throughout the late 1960s and 1970s, various problems arose in Latvia. Firstly, the lack of space and therefore housing accommodations formed a substantial problem.242 For instance, the housing problem led to a large number of abortions as women believed that there was insufficient space to raise the children: in 1973 alone, 60 000 abortions had taken place in

231 Ibid., pp. 251-253. 232 Ibid., pp. 208-209. 233 Interview R60. 234 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 135. 235 Ibid., p. 135. 236 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 261-264. 237 Interview R60. 238 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 135. 239 Ibid., p. 138 and p. 143. 240 Ibid., p. 134. 241 Interview R60. 242 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 222-224. LATVIA AND THE EUROPEAN UNION 41

Latvia due to mostly ‘inadequate housing’.243 Secondly, excessive drinking also became an increasing problem in society, and alcohol was at some point even used as a means of payment. Punishments for drinking during work time consisted of losing one’s eligibility for new housing accommodations, among others.244 Thirdly, the fast industrial growth in the Baltic states resulted in environmental problems, especially in Latvia where there was a large growth in the heavy industry sector from the mid-1960s until the late 1970s.245 Finally, the 1970s marked a decrease in the economic prosperity, rising prices and food scarcity,246 which occasionally led to strikes in Latvia.247

3.9.4 Mikhail Gorbachev’s glasnost and perestroika (1985 – 1987) Gorbachev assumed leadership of the Soviet Union in 1985, and the most important changes he introduced to the Soviet regime were the policies of glasnost and perestroika.248 ‘“Glas- nost” meant allowing freedom of expression and political debate. “Perestroika” meant above all reforming the inefficient state-run economy, introducing elements of a free market and free enterprise.’249 Essentially, these two elements were introduced to avoid an economic crisis in the Soviet Union,250 but provided a unique chance for the Latvians to pursue more autonomy.251 In addition to glasnost and perestroika, Gorbachev altered the existing constitution of the Soviet Union by initiating the formation of a ‘Congress of People’s Deputies’. There were various potential candidates for the Congress between which the citizens were even allowed to choose. Furthermore, the so-called ‘Supreme Soviets’ (i.e. the Soviet parliaments in the individual Soviet republics) gained more power.252 Gorbachev also ordered a drastic change in the Latvian state structure, by replacing multiple highly placed officials in Latvia with other people from various origins during 1985 as a means to counter the corruption on those levels.253 During his leadership, Gorbachev addressed various problems that prevailed in Latvia. For instance, to address the shortage of housing accommodations Gorbachev pledged that by

243 Ibid., p. 224. 244 Ibid., pp. 224-225. 245 Ibid., p. 234. 246 Ibid., p. 210. 247 Ibid., pp. 251-253. 248 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 147. 249 R.G. Grant, Communism (Systems of government), London: Evans Brothers 2005, p. 36. 250 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 147. 251 Country Watch, ‘Latvia Country Review’, 2011, p. 9, retrieved from: http://web.ebscohost.com/ehost/detail?sid=7813a65d-8ce6-474c-bb88- 9cde0408aa32%40sessionmgr110&vid=1&hid=125&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3D%3D#db=buh& jid=DVX. 252 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 147. 253 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 276 and p. 280. 42 HISTORY

the year 2000 this problem would be solved.254 Also, the increasing consumption of alcohol in the Baltic states, which was perceived as a threat to the country, resulted in state imposed restrictive measures to counter the alcohol use in 1985.255 However, various serious problems persisted throughout the 1980s. The rapidly growing heavy industry caused severe environmental problems in the Baltic states, such as water contamination, large amounts of industrial waste, air pollution and excess of compost used at farms.256 These environmental problems persisted, although they were increasingly addressed by the Soviet regime in the 1980s through, among others, the establishment of ‘republic committees for protection of the environment’.257 (For an overview of how this pollution was eventually faced, please refer to page 6.) During the 1980s the Baltic states increasingly focused on ‘reasserting their national culture and reclaiming their national identity’.258 As a result, the opposition to the Soviet regime increased. Although the regime intervened heavily against the protest movements in Latvia and various activists were imprisoned in Soviet prison camps in the 1980s, open letters were still frequently distributed concerning, among others, the ending of Soviet suppression or improvement of the environmental conditions.259 Sometimes dissidents were punished by placing them in psychiatric clinics and drugging them. Another form of punishment that was systematically employed throughout the Soviet regime was the punishment of near relatives, through, for example, preventing these relatives from receiving university education.260

3.9.5 Towards independence (1987 – 1990) Various significant events throughout 1987 marked a complete change in the situation of the Latvian nation.261 This change seems to have been caused by glasnost, which gave substantial freedom of expression and allowed for more critical assessment of the system. In practice, this led to activists successfully preventing the establishment of a new ‘hydro electrical power plant’ in Latvia, for example. The effectiveness of the aforementioned opposition changed the attitude of people towards the system and allowed for more confidence to oppose the Soviet dominance as such.262 The successful opposition led to other massive demonstrations in Latvia throughout

254 Ibid., pp. 285-286. 255 Ibid., p. 287. 256 Ibid., pp. 292-293. 257 Ibid., p. 294. 258 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 149. 259 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 299-301. 260 Interview R60. 261 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 303. 262 Ibid., pp. 304-305. LATVIA AND THE EUROPEAN UNION 43

1987,263 which essentially consisted of large meetings to remember certain important historical events. The Freedom Monument in Latvia’s capital seemed to be the heart of many massive gatherings. 23 August 1987 – the date on which the decisive Molotov-Ribbentrop pact was signed years before – saw major demonstrations in Lithuania, Estonia and Latvia. Over 10 000 citizens participated in the demonstration in Riga by placing flowers around the Free- dom Monument.264 To counter the demonstrative activities, the regime forced various main organisers of the demonstrations to leave Latvia. However, the demonstrations continued and in November 1987 another major gathering took place at the Freedom Monument.265 These demonstrations were soon followed by the establishment of large reform-minded associations in the Baltic states in 1988, known as the Popular Fronts. The Latvian Popular Front was created on 9 October 1988266 and its main objective was to acquire economic sovereignty from the Soviet Union.267 Moreover, the traditional national flags were increasingly introduced again and in the late 1980s the Latvian language was re-established as the official language of the country.268 Throughout 1988 and 1989 the demonstrations in Latvia and the other Baltic states continued, resulting in gatherings of tens of thousands of citizens. The most influential demonstration was held on 23 August 1989, again to commemorate the signing of the Molotov- Ribbentrop Pact, 50 years earlier.269 The Baltic states organised a massive peaceful demonstration by holding hands and forming a ‘human chain’ across all three states.270 This demonstration was a means to attract positive attention from the outside world for the Baltic cause, and to distinguish their approach from the ‘criminal and unlawful’ approach the Soviet Union chose in 1939.271 This massive demonstration infuriated Gorbachev, who perceived this as a threat to the Soviet system.272 However, he could no longer ignore the developments and in July 1989 ‘plans for the economic autonomy of the Baltic states’ were approved.273 Moreover, Gorba- chev met with the governments of the Baltic states in September to discuss a possible manner to resolve the tensions.274 Gorbachev’s changed stance towards negotiations with the Baltics was caused, on the one hand, by the potential negative implications these tensions might have

263 Ibid., pp. 304-305. 264 Ibid., pp. 307-308. 265 Ibid., pp. 310-311. 266 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, pp. 149-150. 267 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 318. 268 Ibid., p. 311 and p. 316. 269 Ibid., p. 316 and p. 327. 270 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 154. 271 Ibid., p. 154. 272 Ibid., p. 155. 273 Ibid., pp. 155-156. 274 Ibid., p. 156. 44 HISTORY

on the economy in the Soviet Union, and, on the other hand, by the victory of Boris Yeltsin in the Russian Supreme Soviet.275 It has been suggested that Gorbachev and Yeltsin were enemies and therefore Yeltsin supported all that Gorbachev opposed, one of those things being Latvia’s move towards independence.276 Nonetheless, negotiations with Gorbachev did not encourage the Baltic states to depart from their path to independence.277 As the traditional Soviet regime was losing popular support and its power in the Baltic countries was declining, Latvia declared to be sovereign on 28 July 1989.278 On 11 January 1990 the Supreme Soviet in Latvia officially decided that the Latvian Communist Party no longer was the centre of power in Latvia279 and the old Latvian constitution from 1922 was also restored that year.280 Early January 1990 marked the final attempt of the Soviet regime to regain its dominance over Latvia by trying to ‘overthrow the Latvian authorities by occupying the central publishing house in Riga and establishing a “Committee of National Salvation” to usurp governmental functions.’281 However, this coup d’état was unsuccessful and, following a short period of transition, 282 Latvia officially declared to be independent on August 21st 1991.283 Yet, despite Latvia’s independence, a ‘Soviet’ military presence remained in Latvia until 1994.284

3.10 Independence (1991– present)

Fifty years of Soviet occupation came to an end in 1991, marking a new beginning for Latvia. However, this new beginning was followed by a period of transition, which had various consequences for the country and its citizens.285 Firstly, the transition process led to westernisation, which resulted in the establishment of various cafés and shops that provided supplies from the West.286 Secondly, the country faced changes in terms of population composition. The independence of Latvia resulted in emigration waves by citizens who opposed the drastic change to

275 Ibid., p. 164. 276 Interview R60. 277 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 164. 278 R.J. Misiunas and Rein Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 326-327. 279 J. Hiden and Patrick Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Century, Essex: Longman Group UK 1991, p. 160. 280 Ibid., p. 162. 281 Country Watch, ‘Latvia Country Review’, 2011, p. 10, retrieved from: http://web.ebscohost.com/ehost/detail?sid=7813a65d-8ce6-474c-bb88- 9cde0408aa32%40sessionmgr110&vid=1&hid=125&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3D%3D#db=buh& jid=DVX. 282 Ibid., p. 10. 283 V. Nollendorfs, Museum of the occupation of Latvia, Latvia: Latvijas Okupacijas muzeja biedriba 2008, p. 208. 284 Interview R60. 285 A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, p. 402. 286 Ibid., p. 404. LATVIA AND THE EUROPEAN UNION 45 independence: thousands of citizens emigrated to Russia annually in the first years after independence.287 Moreover, a relatively small number of Latvians who had left Latvia or were forced to leave during and after the Second World War, returned after independence.288 Addi- tionally, the country was left with a substantial number of ethnic Russians who did not have Latvian citizenship, the so-called non-citizens (see section 5.10.2).289 Thirdly, independence was accompanied by drastic economic alterations, such as the shift ‘from a command to a market economy’.290 The Soviet system of assured incomes and set prices was replaced by ‘supply and demand’ and personal inventiveness to earn money, which initially led to high unemployment rates.291 Moreover, the country was hit by inflation, and the introduction of a new legal tender in the period between 1993 – 1995 was also not conducive for the economic situation.292 Furthermore, the lack of governmental rules allowed for criminality in the economic field: the establishment of the so-called ‘pyramid schemes’293 led Latvia to a financial crisis in the mid-1990s.294 Yet, for those who did manage to adapt to the new system, such as entrepreneurs, it brought new economic possibilities and eventually wealth.295 Overall, it has been suggested that the transition to a market economy was the most difficult transition for the Latvian citizens after the 1990s.296 Fourthly, the independence of the Baltic states was accompanied by constitutional changes and the 1922 constitution of Latvia was restored (with minor alterations). According to Latvia’s constitution, the parliament is chosen in a democratic manner by a system of ‘propor- tional representation’. Subsequently, the president of the country is chosen by the parliament.297 Essentially, the period after 1991 marked the rebirth of a parliamentary democracy in Latvia.298 The Latvian constitution is discussed in more detail in section 5.2.1 on page 92. Fifthly, independence led to a ‘return of ownership by Latvians’.299 This resulted in, for example, the removal of the Russian alphabet and other memories to the Soviet ‘occupier’, such as monuments. It also resulted in the implementation of laws concerning the Latvian language and newly written history schoolbooks, which allowed for a restoration of the Latvi- an past and historical events.300 Also, in 1998, the president of Latvia launched a Commission to describe all historical events during Soviet and German dominance in an objective man-

287 Ibid., p. 405. 288 Ibid., p. 409. 289 Ibid., pp. 444-445. 290 Ibid., p. 406. 291 Ibid., pp. 405-406. 292 Ibid., pp. 405-406. 293 Ibid., p. 425. 294 Ibid., p. 425. 295 Ibid., pp. 406-407. 296 Interview R03. 297 A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, p. 412. 298 Ibid., p. 418. 299 Ibid., p. 426. 300 Ibid., p. 426. 46 HISTORY

ner.301 To be able to do this, the Commission included (and still includes) a substantial number of non-Latvian members from Germany, Russia and the United States. To date, the Com- mission has published 27 books concerning Latvia’s history from 1940 onwards.302 Finally, after independence Latvia moved closer to membership of various international and European organisations, such as the United Nations and the OSCE in 1991.303 This process is described in more detail in section 6.3.4 on page 201. In 1995, Latvia acquired the status of ‘associate member’ of the European Union. Such a membership was desirable from the European perspective as it would expand the European (trade and investment) market, while diminishing the Russian influence over the country.304 For the Latvian perspective on EU accession, please refer to page 205. Eventually, the year 2004 marked the accession of Latvia and the other Baltic countries to NATO and the EU. This ‘signified that the post- communist phase of the recent past was being left behind’.305

3.11 Current debate about historical events

3.11.1 Commemoration on March 16th Describing historical events in the post-Soviet era was and currently is a particularly difficult and sensitive matter in Latvia. In fact, it has resulted in several history-oriented debates, one of which concerns the commemoration day on 16 March. Every year on March 16th a commemoration is held in Latvia, initiated by some Latvian veterans of the Second World War.306 These Latvian veterans were part of the so-called Latvian SS volunteer legion, which was established in 1943 by an order of Hitler to fight against the Soviet Union.307 They fought under the command of the German Nazi Waffen SS in Latvia.308 This commemoration day stems from a battle fought on 16 March 1944 between the Latvian legionnaires and the Soviet army, in which a large part of the legionnaires died. Since the early 1950s, every March 16th, this event has been commemorated309 by placing flowers at the Freedom Monument of Lat- via.310 From Latvian perspective, this commemoration is not a demonstration of support for the Nazi ideology, or any pro-Nazi ideas for that matter, but simply a day to honour Latvians who fought against the principal Latvian enemy, namely Russia.311

301 Ibid., pp. 439-440; interview R46. 302 Interview R46. 303 A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, p. 399 and pp. 430-431. 304 Ibid., p. 429. 305 Ibid., p. 435. 306 Interview R03. 307 Valters Nollendorfs, Museum of the occupation of Latvia, Latvia: Latvijas Okupacijas muzeja biedriba 2008, pp. 79-80. 308 Interview R03. 309 Interview R60. 310 Interview R03. 311 Interview R46. LATVIA AND THE EUROPEAN UNION 47

Yet, in recent years there has been opposition to this commemoration by mostly ethnic Russians who perceive the matters differently.312 In their perception, the acts of the Latvian legion were not heroic, but brought damage to their Soviet soldiers. Moreover, this commemoration is partly perceived as an expression of pro-Nazism. As a result, every year this commemoration act results in minor tensions between ethnic Russians and Latvians in Latvia.313 One of the experts in the field has stated that propaganda from ethnic Russians and Latvian local nationalists have turned this event into something political that has nothing to do with Latvia’s history.314 Nevertheless, the 16th of March is perceived as a very controversial event in Latvia,315 which has contributed to a division among ethnic lines in Latvia’s society.316

3.11.2 Celebration on May 9th The same might be true for the celebration on the 9th of May. On 9 May 1945, Nazi Germany signed an agreement with the Soviet Union in which it admitted its defeat in the Second World War. Currently, in Russia and some other former Soviet countries this day is celebrated as a ‘victory day’. The Russian-speaking part of Latvia’s society also celebrates this day. However, from the perspective of ethnic Latvians this day does not mark a victory, but the tragic beginning of the second period of Soviet dominance over Latvia.317

3.11.3 Conflicting memories of the past Another historical debate concerns the division of society according to their memories of the past. The Russian-speaking minority in Latvia perceives the period of Soviet dominance over Latvia as mainly positive.318 The Latvian part of society, on the contrary, perceives the Soviet regime as harsh and negative. This dissimilar understanding of the historical events in Latvia makes it difficult to unite these visions and therefore the citizens.319 It has even been suggested that there are serious concerns about this Russian-speaking part of society who are regarded as a ‘threat’,320 because they might have been manipulated mentally through the pro-Soviet version of historical events.321 One possible way to bring these different perceptions closer together is through the Russian-Latvian history Commission, which was established in 2011. This Commission is responsible for researching historical events, and both Russian and Latvi-

312 Ibid. 313 Ibid. 314 Interview R03. 315 Interview R23. 316 Interview R46. 317 Latvian history website, ‘Why Latvians don’t celebrate Victory day?’, retrieved from: http://latvianhistory.wordpress.com/2010/05/09/why-latvians-dont-celebrate-victory-day/, consulted on 23 May 2012. 318 Interview R46. 319 Ibid. 320 Interview R60. 321 Ibid. 48 HISTORY

an historical experts are participating in researching the common history.322

3.11.4 Terminology discussion Resulting from these two different memories of history is the question surrounding the occupation of Latvia by the Soviet Union in 1940. An interesting discussion, which is still ongoing amongst historians, concerns the question whether Latvia’s annexation by the Soviet Union can be described as an occupation (from a judicial and factual point of view), or as a voluntary act of Latvia to unite with the Soviet Union. However, various experts in the field have confirmed that the submission to the Soviet Union in 1940 was done under force from the Soviet military;323 that it can be considered unlawful according to international law;324 and that due to these two arguments, Latvia’s independence in the 1990s marked the continuation of the first republic that was established in 1918 and not the establishment of a second one.325 The latter point of discussion was particularly important from a political and judicial view- point, as recognising Latvia as a newly established state would mean that the Russian part of the Latvian population would be entitled to acquire citizenship automatically. Also, if this would have been the case, the Russian language might have gained official status in addition to Latvian.326 Overall, the discussion concerning the terminology used to describe these historical events is also referred to as a political debate and not so much a historical debate.327

3.11.5 Discussion concerning compatibility between Soviet and Nazi repression Finally, there is an ongoing debate among historians in Latvia regarding the possibility of comparing the Soviet Gulag camps and the Nazi camps or ghettos for Jews.328 According to one historian, the two are not comparable, since there was hardly any possibility for the Jew- ish citizens to survive; the Jews in general were not meant to survive the Nazi regime.329 In contrast, in the Gulag camps there was a possibility to survive, despite the harsh climate and labour.330 Other historians claim that the differences between the two are relatively small.331

3.12 Conclusion

Latvia is known to be inhabited since 9000 B.C. The first foreign powers to obtain dominance in the region were the Germans, around the year 1200. In the following six centuries, the con-

322 Interview R46. 323 Ibid.; interview R03; interview R60. 324 Interview R03. 325 Interview R60. 326 Interview R57. 327 Interview R23. 328 Interview R23; interview R46; interview R60. 329 Interview R23. 330 Ibid. 331 Interview R60; interview R46. LATVIA AND THE EUROPEAN UNION 49 trol over Latvian territory shifted from the Germans to the Swedes and Poles, and finally the Russians, whom the Latvians eventually fought in their struggle for independence. This independence was proclaimed on 18 November 1918, but was short lived. From 1940 until 1991, Latvia went through periods of Soviet and Nazi-German occupation, and both occupations left severe scars on Latvia and its citizens. Nevertheless, some people still feel nostalgic towards the Soviet times, as life appeared more stable - with a guarantee for work and health care - than it does to date in these times of worldwide economic crisis. The ethnic composition of Latvia’s population, of which the Russian speaking minority forms one third, is a constant reminder of Latvia’s turbulent history. The different historical memories of a large part of the Russian speaking citizens and the ethnic Latvians have led to serious history-oriented debates. These debates have contributed to a division in Latvia’s society along ethnic lines. Efforts have been made to bring these different perceptions closer together, for instance through the establishment of the Russian-Latvian history commission in 2011. However, whether these efforts are sufficient to close the societal gap and avoid another turbulent chapter in Latvia’s history in the future, is too soon to say.

LATVIA AND THE EUROPEAN UNION 51

4. Culture

4.1 Introduction

The culture of Latvia has been heavily influenced by its history. The several occupations of foreign prowers throughout the centuries have left their marks; Swedish, Polish, German and Russian elements can be found in today’s Latvian culture. The occupations formed a major obstacle for developing a unique Latvian culture. During the first period of independence, Latvian culture flourished. This was suppressed by the Russian occupation from 1944 until 1991. Since its independence in 1991, Latvia has pushed for the (re-)flourishment of the unique Latvian culture. Three elements of the Latvian culture will be discussed in particular detail. First, an overview of the artistic elements of cultural expression, e.g. Latvian folklore, music, dance, architecture, painting, literature, and symbols, will be presented. The Latvian language and religion in Latvia will also be thoroughly analysed. It will be shown that the Latvian language, dance and music are the most important components of the Latvian culture, but that religion does not play a large role. Besides these concrete components of culture, the more abstract concept of ‘identity’ will be discussed as well. As shown in section 2.3, a large Russian-speaking minority lives in Latvia. This chapter aims to reflect the cultural view from all angles of the Latvian society. Therefore, the cultural issues of Latvia’s Russian-speaking minority will also be given attention in this chapter. Last- ly, the cultural policy of the Latvian government will be discussed, since it can influence the organisation of cultural life by its policy programme.

4.2 Latvian cultural expression

History has been crucial in the formation of one national culture and identity within Latvia.1 Especially the first period of independence from 1922 until 1940 has been a time in which Latvians could openly express their unique culture without any foreign suppression.2 The day that Latvia proclaimed its independence, 18 November 1918, is still celebrated as a national holiday.3 The years of foreign domination have had their influence on Latvian culture. The most reflected foreign cultural influence in day-to-day life in Latvia is the German culture, as a result of hundreds of years of occupation.4 For example, Latvia’s national food consists mostly of potatoes, pork and sauerkraut.5 Besides the food, German words are still used by Latvi-

1 Interview A01. 2 Interview R42. 3 Ibid. 4 Ibid. 5 Ibid. 52 CULTURE

ans. Remarkably, the German culture became part of Latvian culture, while the other dominations had less influence.6 The Russian domination, which lasted 51 years in the 20th century, resulted in a Russian culture in Latvia that exists separately from the Latvian culture. There is Russian cuisine, dance and art, but it exists next to the Latvian culture and they are not intertwined. The Latvi- an culture contains most influence from Germany and to a lesser extent from Poland, Russia and Sweden.7 Although there have been foreign influences in Latvian culture, the Latvians have always tried to keep a certain part uniquely Latvian.8 This Latvian culture is expressed in many ways, such as dance, music and art. Moreover, this unique Latvian culture can be found within folklore groups and song and dance festivals.9

4.2.1 Latvian folklore and national consciousness Latvia and the Baltic area are known for singing and dancing festivals on a large scale.10At these events, the whole population is dressed up in costumes as an expression of cultural regional identity.11 Almost every town and village has its own folklore association with members of all ages.12 Folklore associations have always been very popular and still are nowadays. Within these associations, intricacies of the local folklore culture are passed on. Folk music is also played by street musicians and in many pubs.13 All these authentic expressions of popular culture are centuries old and were mainly kept alive by the peasants living in the countryside. Despite centuries of domination by foreign elites, folklore music and dance helped the Latvians to preserve their own identity.14 This perception became even stronger during the 19th century, when the expression of folklore culture increased exponentially during the Romantic period.15 In combination with increased education in the local language, the study of culture and history led to the development of a strong national consciousness.16 This national consciousness was mainly expressed in increasingly organised, large-scale song festivals, which eventually grew into important symbols of national unity.17 At the same time, individual Latvian artists started to express themselves, strongly inspired by national

6 Ibid. 7 Ibid. 8 Interview D02; interview R09. 9 Interview R42. 10 Interview R42; interview D02. 11 Ministry of Culture of the Republic of Latvia, ‘Traditional festivities’, retrieved from: http://www.culture.lv/en/heritage/191/, consulted on 17 March 2012. 12 D. Bula, ‘Folk songs’, retrieved from: http://www.latvia.lv/content/folk-songs, consulted on 17 March 2012. 13 Interview R42. 14 Ibid. 15 Ministry of Culture of the Republic of Latvia, ‘Traditional festivities’, retrieved from: http://www.culture.lv/en/heritage/191/, consulted on 17 March 2012. 16 Interview R42. 17 Ibid. LATVIA AND THE EUROPEAN UNION 53 problems.18 Their artwork became a story of the struggle for independence. When independence became a fact after the First World War, Latvian artists tried to break with their regional isolation and joined international art flows.19 During this interwar period folkloristic art, music and dance became a major national yearly event. During the Soviet suppression, only artists who completely worked according to the So- viet art doctrine were allowed. This meant an abrupt end to the flourishing folkloristic art.20 The only expression of non-socialist thoughts that remained were preserved through the song festivals, although later, it was obvious that the repertoires had been adapted to the communist programme.21 This changed under Gorbachev’s policies of glasnost and perestroika (see also section 3.9.4 on page 41). Patriotic songs were heard and important symbols, such as the Lat- vian national flag and coat of arms, were seen again.22 Also, underground artists and writers started to publish forbidden works of writers from the old days who dealt with national themes.23 Since the Latvian independence after 1991 there has been complete artistic freedom in Latvia. Both folkloristic and individual art have flourished since.24 Although the folkloristic art has been a binding factor for the Latvian society, its popularity remains within Latvian borders: writers and musicians are little known internationally. The reason for this may be that folk art looks ‘old-fashioned’ to outsiders.25

4.2.2 Latvian music The Latvians have a rich supply of folksongs, dances and musical instruments, originally used in rituals.26 An example of these rituals is the ensuring of fertility of the Latvian land and population. Singing is seen as part of Latvian survival.27 One of the main reasons why music is highly important to Latvian cultural identity is that Latvian music, as an exception within artistically expressions, has survived the foreign ruling powers rather unscathed.28 The Latvi- an music is seen as something purely Latvian and therefore unique.29 During the ages Latvia was suppressed by the Germans, Swedes, Poles and Russians, the only thing the different cul-

18 Ministry of Culture of the Republic of Latvia, ‘Art’, retrieved from: http://www.culture.lv/en/heritage/9/, consulted on 17 March 2012. 19 M. Lace, LNMM - The Latvian Museum of Art, Latvia: Mc Abols, 2007, p. 5. 20 Ministry of Culture of the Republic of Latvia, ‘Art’, retrieved from: http://www.culture.lv/en/heritage/9/, consulted on 17 March 2012. 21 Ibid. 22 Interview A01. 23 Ibid. 24 Ministry of Culture of the Republic of Latvia, ‘Traditional festivities’, retrieved from: http://www.culture.lv/en/heritage/191/, consulted on 17 March 2012. 25 Interview R42. 26 K. Onwijn, Baltische landen, Amsterdam: KIT publishers 2007, p. 105-120 27 Ibid., p. 105-120 28 Ministry of Culture of the Republic of Latvia, ‘Music’, retrieved from: http://www.culture.lv/en/heritage/1/, consulted on 18 March 2012. 29 Interview R42. 54 CULTURE

tures living within Latvia had similar were the church hymns and school songs.30

Early Latvian music Latvian national music all started with a collection of Latvian folk songs in 1869.31 They were collected, harmonised and arranged for a choir by the German-educated historian and conductor J#nis Cimze.32 Another prominent role in the foundation of Latvian national music is played by the musicians Andrejs Jurj#ns and J#zeps V!tols, educated at St. Petersburg conservatory in 1880.33 They are seen as the founding fathers of Latvian classical music. They created choral songs, cantata and orchestral pieces with folk music as their inspiration. They were the pioneering researchers into Latvian folksongs. 34 J#zeps V!tols also became the first head of Latvia’s conservatory. At the end of the 19th century, many Latvian musicians were ardent collectors of folklore: they arranged and harmonised the traditional songs for choirs and the symphonic orchestra, which was yet to be formed.35 This was also the time in which the first original choir songs were written, including the Latvian national anthem.36 Traditional Latvian music mostly consists of poetic songs called Dainas. Pre-Christian themes, legends and old mythology are favoured topics.37 Dainas are very short, do not rhyme and do not have legendary heroes. Mostly, the life of Latvian peasants as normal human beings is described, especially around important events like birth, marriage and death. The first collection of Dainas was published in 1894 by Kri%j#nis Barons, also known as the founding father of the Dainas. Later, he became an important Latvian hero; his portrait is now printed on the 100 lats banknote.38

Latvian music during independence The development of Latvian music reached a positive turning point with the establishment of the Latvian state in 1918, starting with the opening of the Latvian National Opera and the Latvian State Conservatory in 1919. This way Latvians had their own theatres and operas to express Latvian music. The forerunner of the Latvian National Symphony, the Radio Sym- phony, was founded in 1920. The government played a very supportive role as regards music, especially after 1937 when the T&vzemes Balva foundation, which translates to ‘the Father-

30 Ministry of Culture of the Republic of Latvia, ‘Music’, retrieved from: http://www.culture.lv/en/heritage/1/, consulted on 18 March 2012. 31 Ibid. 32 Ibid. 33 Ibid. 34 R. J#kobsone, ‘Jurj#nu Andrejs, 1856 - 1922’, retrieved from: http://www.music.lv/Composers/J_Andrejs.htm, conducted on 18 March 2012. 35 Ministry of Culture of the Republic of Latvia, ‘Music’, retrieved from: http://www.culture.lv/en/heritage/1/, consulted on 18 March 2012. 36 Ibid. 37 Ministry of Culture of the Republic of Latvia, ‘Music’, retrieved from: http://www.culture.lv/en/heritage/1/, consulted on 18 March 2012. 38 D. Bula, ‘Folk songs’, retrieved from: http://www.latvia.lv/content/folk-songs, consulted on 17 March 2012. LATVIA AND THE EUROPEAN UNION 55 land Award foundation’, was formed, on the initiative of the Culture Foundation. It supported musicians, radio and music recording financially.39

Latvian music after the Second World War In the post-war decades the music scene was ruled by political leaders and only music, orato- rios, cantatas, song cycles and symphonies that were in favour of the government were toler- ated.40 In the 1960s this changed: music performances flourished and classical music became part of everyday life in Latvia: it was played in many district centres, large factories as well as concert halls. In 1967, the State Philharmonic Chamber Orchestra was founded, headed by conductor Tovi Lifshic. P&teris Vasks was one of the first Latvian composers who started to experiment with different forms of music: motifs from folklore and traditional music were mixed in his innovative music.41 The 1980s Latvian music is known for the search for the inner soul. Many of the young Latvian generation of musicians studied at the conservatory and hoped to succeed in life by doing this.42 Music was seen as a way to escape from everyday life during suppression and occupation of communist rule.43 Well-known Latvian musicians are the ‘Kremerata Baltica Youth Orchestra’, led by world-famous violinist Gidon Kremer. He played violin, because his dad forced him and he always felt like the needle and the thread that had to stitch the deep wound of his father’s soul.44 Gidon Kremer himself used to play heavy musical compositions that symbolised his splintered memories of history and childhood Famous choirs in the global music scene are Latvija, Kam&r and Ave Sol. Additionally, several festivals of national as well as international significance are held in Latvia annually. The most well-known events are: the Ar&na International Festival of New Music, Internation- al Festival of Piano Stars in Liep#ja, Kremerata Baltica Festival, International Ballet Festival, and R!gas Ritmi International Jazz Festival.45

4.2.3 Latvian dance Although Latvians have been dancing since mediaeval times, it only became professional in 1870 when the actors of the Riga Latvian Theatre were required to sing and dance.46 The father of the Latvian theatre, 'dolfs Alun#ns, was also Latvia’s first professional dancer. His

39 Ibid. 40 Ministry of Culture of the Republic of Latvia, ‘Music’, retrieved from: http://www.culture.lv/en/heritage/1/, consulted on 18 March 2012. 41 Ibid. 42 Interview R42. 43 J. Brokken, Baltische zielen, Amsterdam: uitgeverij Atlas 2010, p. 89. 44 Ibid., pp. 100-103. 45 Ministry of Culture of the Republic of Latvia, ‘Music’, retrieved from: http://www.culture.lv/en/heritage/1/, consulted on 18 March 2012. 46 Ministry of Culture of the Republic of Latvia, ‘Dance’, retrieved from: http://www.culture.lv/en/heritage/20/’, consulted on 20 March 2012. 56 CULTURE

performances were a combination of traditional dancing with classical positions.47 Before the Latvian Opera was founded in 1918, Latvia did not have its own musical theatre and depended upon Russian and German companies. The first production in Latvia’s own opera also included ballet parts, but it took until 1911 before choreographer M#rti(% Kauli(% started the first professional ballet group. Dancing became more professional and the dances became choreographed productions instead of the traditional folkdances.48 One of Latvia’s greatest dancers of all times is Mikhail Baryshnikov, born in 1948. Gidon Kremer was a fellow student and often accompanied his dancing on the violin.49 Baryshnikov finished his training at the well-known Vaganova Ballet academy in Leningrad. He performed for the Kirov Ballet, the ‘Russian ballet company’ and in New York. He was seen as one of world’s greatest dancers.50 From the 1950s on, professional and amateur folk dance separated and each evolved in their own way.51 Dance festivals are still very popular in Latvia and have become an important aspect of Latvian national identity. Besides the festivals there are more than 800 folk dance groups and many modern dance schools.52

4.2.4 Latvian architecture Latvian architecture reflects Latvia’s history of being dominated by different powers: Germa- ny, Sweden, Poland and Russia. There are German- and Polish-looking baroque style hanseat- ic cities, as well as Scandinavian fishing villages and typical Russian 19th century neoclassical country towns. Architecture is very important to Latvia’s cultural heritage, especially with Riga being called the capital of Art Nouveau.53 Latvia followed the same path of architectural movements as the rest of Europe. Therefore, architecture is sometimes seen as proof of Latvia being European instead of Russian.54 Architecture used to be the primary form of art, expressed in church buildings and therefore linked to Christianity. In Latvia architecture was founded after the spread of Christiani- ty.55 National characteristics were added as features honed by the harsh ages.56 The first Romanesque style church was built in 1186 in Ik%)ile; other examples of the Romanesque style in Latvia are the St. George’s Church and Dome Cathedral’s eastern sec-

47 Ibid. 48 Ibid. 49 J. Brokken, Baltische zielen, Amsterdam: uitgeverij Atlas 2010, pp. 100-103. 50 Ibid., pp. 95-97. 51 Ministry of Culture of the Republic of Latvia, ‘Dance’, retrieved from: http://www.culture.lv/en/heritage/20/’, consulted on 20 March 2012. 52 Interview R42. 53 Ministry of Culture of the Republic of Latvia, ’Architecture’, retrieved from: http://www.culture.lv/en/heritage/38/, consulted on 28 March 2012. 54 Interview R42. 55 Ministry of Culture of the Republic of Latvia, ’Architecture’, retrieved from: http://www.culture.lv/en/heritage/38/, consulted on 28 March 2012. 56 Ibid. LATVIA AND THE EUROPEAN UNION 57 tion.57 The Romanesque architecture is known for its massive quality, piers, vaults, towers, arcading, arches and thick walls. The forms in the buildings are defined clearly and are often very regular and symmetrical.58 During the next 300 years, construction intensified widely in Latvia, but the style changed from the simplicity of the Romanesque style to the Gothic style. Churches were not just seen as places to pray and convert pagans, but also to rise closer to God.59 The Gothic style is known for its point-shaped arches, ribbed vaults and flying buttress. With churches in Gothic style, architects tried to appeal to the emotion.60 The Dome and St. Jacob’s Cathedral in Riga and St. John’s in C&sis clearly show this.61 After this Romanesque style in architecture, Latvia went through a change of perception because of the rationalisation in daily life and reformations in religion.62 This had its influence on styles of architecture. During the Renaissance, Latvians started to realise they did not only exist for spiritual experiences, but also to be a well-mannered citizen. This harmonisation of the Latvian society was also seen in the harmonised and balanced architecture of the town halls and great mansions.63 Symmetry, proportion and regularity of parts were very important. Columns, pilasters, lintels, arches, niches and domes were all arranged orderly. Build- ings looked like they did in medieval times. An example of this style is the St. Catherine’s Church in Kuldiga.64 After the Renaissance, the Baroque style in architecture took over in Latvia. On the one hand, Baroque represented emotions; on the other hand it was a visible statement of the wealth and power of the Church.65 Baroque in Latvia has many decorative elements, is dynamic and has outlandish forms and extravagance. Many manor houses, castles and dwellings are built with this style.66Well-known Latvian architects in this style from the 17th and 18th century are Rupert Bindenschu and Bartolomeo Francesco Rastrelli.67 This period of Latvian extravagance was followed by subtle simplicity and clear forms during the period of Classicism. Famous architects from Latvia like Christof Haberland and

57 Ibid. 58 Unknown, ‘History of Gotic Romanesque’, retrieved from: http://www.architecturecourses.org/romanesque- architecture-style, consulted on 28 May 2012. 59 Ministry of Culture of the Republic of Latvia, ’Architecture’, retrieved from: http://www.culture.lv/en/heritage/38/, consulted on 28 March 2012. 60 Unknown, ‘History of Gotic Romanesque’, retrieved from: http://www.architecturecourses.org/romanesque- architecture-style, consulted on 28 May 2012. 61 Ministry of Culture of the Republic of Latvia, ’Architecture’, retrieved from: http://www.culture.lv/en/heritage/38/, consulted on 28 March 2012. 62 Ibid. 63 Ibid. 64 Ibid. 65 Ibid. 66 Encyclopedia of Art, ‘Baroque Architecture’, retrieved from: http://www.visual-arts-cork.com/history-of- art/baroque-architecture.htm, consulted on 29 March 2012. 67 Ministry of Culture of the Republic of Latvia, ’Architecture’, retrieved from: http://www.culture.lv/en/heritage/38/, consulted on 28 March 2012. 58 CULTURE

Johann Georg Adam Berlitz created many classical style buildings.68 During this same time, Eclecticism was a popular architect style. This style mixed elements of different historical styles to create something new and original. Riga has many buildings designed with this mix- ture, like the University of Latvia, the Academy of Music and the Art Academy.69 At the turn of 19th and 20th century, the most important architectural style for Latvia became common: Art Nouveau. Riga is one of the few European capitals where this style was widely favoured in a very strong and convincing way.70 Art Nouveau tries to harmonise and fit in the natural environment by implementing flowers, plants, curved lines and natural forms in its structures.71 Famous Latvian architects are Mikhail Eisenstein, Konstantins P&k%&ns and Vilhelms Ludvigs Nikolajs Bokslafs.72 For those architects, no boundaries existed and they had a great eye for decorative detail.73 Especially Mikhail Eisenstein is seen as the architect that made Latvia a serious rival of Vienna in the field of architecture.74 By giving Riga a more southern atmosphere, Eisenstein and others gave Riga more warmth.75 Eisenstein designed the most eccentric buildings. Because of the economic and cultural growth between 1890 and 1910, Riga flourished as never before and totally changed face.76 The very detailed and curly Art Nouveau was followed by the counterbalancing Neoclas- sicism. Functionalism was the most important aspect in this pre-World War I period.77 The German Bauhaus school was of great influence in Riga.78 However, during the time of independence, the Latvians also started to realise their own artistic value in all the buildings, bridges and monuments they built in the past.79 Architecture changed again in Latvia when the Russians took over in 1940 with the communist regime, in which propaganda and administration were very important. Administrative buildings and movie theatres – to spread the Communist ideas – became common in the Latvian street view. Also the numbers of the so- called ‘cinderblock apartments’ or ‘Soviet flats’ rose; buildings that were known for their poor quality and construction.80 On the other hand, some structures were of lasting value, like the Occupation Museum, which was used for other purposes during Soviet rule, and Riga’s

68 Ibid. 69 Ibid. 70 J. Krasti(%, ‘Art Nouveau in Riga’, retrieved from: http://www.latvia.lv/content/art-nouveau-riga, consulted on 28 March 2012 71 Ibid. 72 Ministry of Culture of the Republic of Latvia, ’Architecture’, retrieved from: http://www.culture.lv/en/heritage/38/, consulted on 28 March 2012. 73 J. Krasti(%, ‘Art Nouveau in Riga’, retrieved from: http://www.latvia.lv/content/art-nouveau-riga, consulted on 28 March 2012. 74 Ministry of Culture of the Republic of Latvia, ’Architecture’, retrieved from: http://www.culture.lv/en/heritage/38/, consulted on 28 March 2012. 75 J. Brokken, Baltische zielen, Amsterdam: uitgeverij Atlas 2010, p. 57. 76 Ibid., pp. 57-67. 77 Ministry of Culture of the Republic of Latvia, ’Architecture’, retrieved from: http://www.culture.lv/en/heritage/38/, consulted on 28 March 2012. 78 Ibid. 79 Ibid. 80 K. Onwijn, Baltische landen, Amsterdam: KIT publishers 2007, p. 105. LATVIA AND THE EUROPEAN UNION 59

Congress Centre. Since Latvia’s independence, construction boomed and many architectural achievements can be seen, like Riga’s Airport Arrivals Terminal, the reconstruction of the Bank of Latvia, and several libraries and hotels. The New Concert Hall and the Modern Art Museum are also good examples of constructions of high-class architecture. UNESCO named Old Town Riga a state-protected zone in 1967 already, but Riga’s Historic Centre was not included on the World Heritage List until 1997.81

4.2.5 Latvian painting The environment in which Latvian pictorial art developed, is that of Baltic art. The paintings have a twofold connection with the Baltic region – it was either where the work had been produced or it was the artist’s native land. Many paintings have also been inspired by the Bal- tic landscape.82 By the end of the 18th century, in the time of the Enlightment, watercolour artists were inspired by Latvia’s nature and social life. Christoph Brontze (1742 – 1823) is seen as one of Latvia’s greatest artists of that time.83 Due to his work Latvian art started to exist on a small scale.84 In the middle of the 19th century, Latvian artists received training in St. Petersburg and Moscow, and especially in Russia their art became more popular. But also in Latvia self- awareness arose, especially among the Latvian intelligentsia. Visual arts experienced some major changes due to new creative art flows.85 Most artists that were situated in Latvia were only there for a ‘pit stop’ on their way to St. Petersburg. It was seen as a step closer to a professional career in Russia.86 Latvian artists only started to earn a living with painting in the 20th century. The first prominent Latvian artists were Adams Alksnis, Janis Valters, Janis Rozentals and Vilhelms Purvitis. These were men on a mission, working for the benefit of the Latvian nation by founding the Dwarf group, where they debated and worked on the concept of Latvian national art. This way national Latvian art was born.87 This was also the time that people took their treasures out on display and Latvians started to realise how much cultural capital they owned. The first incentive to portray Latvian works was in 1896, when the Exhibition of Latvian Ethnography was held in Riga.88 At the turn of the century paintings showed the signs of academic realism, as well as those of the latest movements, observed in foreign exhibitions and

81 Ministry of Culture of the Republic of Latvia, ’Architecture’, retrieved from: http://www.culture.lv/en/heritage/38/, consulted on 28 March 2012. 82 M. Lace, LNMM - The Latvian Museum of Art, Latvia: Mc Abols, 2007, p. 7. 83 Ministry of Culture of the Republic of Latvia, ‘Art’, retrieved from: http://www.culture.lv/en/heritage/9/, consulted on 4 April 2012. 84 Ibid. 85 M. Lace, LNMM - The Latvian Museum of Art, Latvia: Mc Abols, 2007, p. 5. 86 Interview R69. 87 Ministry of Culture of the Republic of Latvia, ‘Art’, retrieved from: http://www.culture.lv/en/heritage/9/, consulted on 4 April 2012. 88 Ibid. 60 CULTURE

literature, such as impressionism, Art Nouveau, symbolism and post-impressionism.89 The first decades of the 20th century saw searches for new means of expression, influences of Eu- ropean art currents and the emergence of original individual styles.90 This is represented in the works of Voldemars Matvejs, Jazeps Grosvalds, Jekabs Kazaks and many others. They show thematic and stylistic variety as well as the formation and traditions of a national school.91 During the First World War, classical modernism came into Latvia and influences continued to be felt during the 1920s and 1930s, giving rise to bold explorations in the means of expression.92 The Riga group of artists was formed in 1920, to represent their avant garde views in Latvia. Cubism is the most convincing style represented in Latvian paintings in the early 20th century. The style broke with the way of traditional thinking and imitations of nature.93 Famous Cubists in Latvian art are Oto Skulme, Valdemars Tone and Romans Suta.94 During the mid-1920s, Latvian artists followed the western European styles of Neo- Realism as an opposition to Expressionism.95 The accent was on drawing, colours and a thin layer of paint. The most outstanding representatives of this style were Aleksandra Belcova and Uga Skulme.96 This changed in 1930, when the expression of characteristics of Realism took the upper hand again. The Artists group, formed in 1920, had classical European art as their inspirational source. It was a youthful exploration with a more traditional view of the surrounding world. The characteristic colouring, texture and temperament of each artist became more important. Representatives of this style in Latvia were Gederts Eliass, Karlis Miensnieks and Eduard Kalnins.97 One of Latvia’s famous artists is Mark Rothko (1903-1970); one of the world-famous founders of avant garde.98 His paintings do not have an ending, are powerful and disturbing, tranquil and profound.99 Painters show you what has always been there, but what you have never really seen.100 Rothko never forgot the fate of the Jewish people in his place of birth, Daugavpils. Rothko came from a very intellectual family and immediately after the Second World War he started painting his first abstract paintings. The paintings were very threatening and usually the colors red, grey and black dominated. The viewer could decide what to see and what not to see in Rothko’s paintings.101 Rothko is regarded as the greatest Latvian paint-

89 Ibid. 90 M. Lace, LNMM - The Latvian Museum of Art, Latvia: Mc Abols, 2007, p. 5. 91 Ibid., p. 3. 92 Ministry of Culture of the Republic of Latvia, ‘Art’, retrieved from: http://www.culture.lv/en/heritage/9/, consulted on 4 April 2012. 93 K. Onwijn, Baltische landen, Amsterdam: KIT publishers 2007, pp. 105-106 and 118-120. 94 M. Lace, LNMM - The Latvian Museum of Art, Latvia: Mc Abols, 2007, p. 3. 95 K. Onwijn, Baltische landen, Amsterdam: KIT publishers 2007, p. 105. 96 M. Lace, LNMM - The Latvian Museum of Art, Latvia: Mc Abols, 2007, p. 3. 97 Ibid., p. 3. 98 Interview D02. 99 J. Brokken, Baltische zielen, Amsterdam: uitgeverij Atlas 2010, pp. 284-285. 100 Ibid., pp. 284-285. 101 Ibid., pp. 285-305. LATVIA AND THE EUROPEAN UNION 61 er.102 The last decennia, art in Latvia has been used to provoke and shock the viewer and to try to let people break with their traditional boundaries.103 Art is out in public space, instead of just being shown in museums and became an important way for the Latvian youth to express themselves.104

4.2.6 The housing of Latvian art The Latvian National Museum of Art operates in two buildings, both historically important for the history of Riga.105 The first building can be found at K. Valdamara Street and was built during the period 1903 – 1905. The founder of the museum and its first director was the German architect and art historian Wilhelm Neumann (1849 – 1919).106 The museum is housed in one of Riga’s most impressive buildings, which corresponds with the demanding factors an art museum in Europe should possess at the turn of the century.107 The building contains Baroque as well as Classicist styles. The sculptural group on the central pediment is designed by August Volz (1851-1926). He also used the Art Nouveau style in the interior of the museum. It can be found at the entrance hall and the adornment of the banisters. The upper floor is designed by the prominent Latvian painter Vilhelms Purvitis (1872 – 1927). The museum building is an architectural monument of national importance and is awaiting construction and restoration in the near future.108 The second building in which the National Museum of Art is operating can be found at Torna Street 1. In this building, the art collection from the mid-20th century to the present is housed. The architectural monument was built at the beginning of the 19th century, in the late Russian Classicist style. It has been adapted partly to the needs of a museum, as it was a customs warehouse before. The initial project was designed by the architect I.E. de Witte; the final project was led by the St. Petersburg architects A. Nellinger and I.F. Lukini. The building was officially opened in 1832.109 Other than being a warehouse, the building was used as a repository for military equipment in the 1920s and 1930s. After the Second World War it was used by the Soviet army as a warehouse, to store commercial goods, and as a military school.110 In the mid-1980s the building, called Arsenals, was taken over by the Ministry of Culture and it got its purpose as National Museum of Art in 1989.

102 Interview D02. 103 Interview A01. 104 Ibid.; interview R42. 105 Interview R69. 106 M. Lace, LNMM - The Latvian Museum of Art, Latvia: Mc Abols, 2007, p. 3. 107 Interview R69. 108 M. Lace, LNMM - The Latvian Museum of Art, Latvia: Mc Abols, 2007, p. 3. 109 Ibid., p. 4. 110 Ibid., p. 4. 62 CULTURE

4.2.7 Latvian literature

Early Latvian literature Before written language existed in Latvia, traditions were expressed through folksongs. Therefore, songs play an important role in the creation of national self-awareness and the creation of one national culture and identity. The first book ever written in Latvian was a tran- script of sermons by Protestant ministers, and was burnt in 1525.111 Therefore, it never reached the Latvian citizens. The year 1525 was later declared the beginning of Latvian publishing.112 The real upcoming of Latvian literature was closely related to the development of an ethnic language.113 With songs existing way before this time, it can be said that it was prior in spreading the idea of one national identity, to books. After publication, literature was used in education especially about cultural and historical traditions in Latvian.114 One of the first publications that became very well-known and popular among all Latvian citizens was the publication of ‘Songs’ by Juris Alunans, in 1856.115 He wanted to make clear that feelings can also be expressed well in the Latvian language. Many ancient folksongs and stories of great importance for the Latvians were written down. Besides Juris Alunans, Kris- janis Barons played an important role in this.116 The national epic of Latvia, ‘L#*pl&sis’, was published in 1888 and written by Andrejs Pumpurs, who described important historical achievements and national epics.117 It is an ancient mythological story, in which the epic figures can be seen as the first national characters with which the Latvians can identify themselves as one ethnic group.118 In the beginning of the 20th century, many Latvian intellectuals went underground or emigrated because of the repression.119 This time it was more of a necessity to go underground to survive, than during the former occupations. One of the most important poets, playwrights, translators and politicians that emigrated was J#nis Pliek%#ns, better known as‘Rainis’.120 He had great influence on the Latvian literary language and the new symbolism he introduced.121 He played a major role in the creation of Latvian nationalism, as he was one of the first who came with the idea of Latvia as an independent sovereign state within his literary work.122

111 Ministry of Culture of the Republic of Latvia, ‘Literature’, retrieved from: http://www.culture.lv/en/heritage/33/, consulted on 4 April 2012. 112 Ibid. 113 Ibid. 114 Ministry of Culture of the Republic of Latvia, ‘Literature’, retrieved from: http://www.culture.lv/en/heritage/33/, consulted on 4 April 2012. 115 Ibid. 116 Ibid. 117 Ministry of Culture of the Republic of Latvia, ‘Art’, retrieved from: http://www.culture.lv/en/heritage/9/, consulted on 4 April 2012. 118 Ibid. 119 Ministry of Culture of the Republic of Latvia, ‘Literature’, retrieved from: http://www.culture.lv/en/heritage/33/, consulted on 4 April 2012. 120 Ibid. 121 Ibid. 122 Ministry of Culture of the Republic of Latvia, ‘Art’, retrieved from: http://www.culture.lv/en/heritage/9/, LATVIA AND THE EUROPEAN UNION 63

Latvian literature during independence Modernistic literature started to exist at the beginning of the first period of independence. Authors such as Cadarainis wrote in a romantic way about everyday life: he romanticised the poor street life of prostitutes for example.123 Later, under suppression of the Soviet Union, he was accused of writing ‘incorrect’ work.124 The first popular Latvian novels had national problems as their main topics. They formed an important stimulus for the development of national consciousness among the population. This all came to an end with the start of the Second World War. 125

Latvian literature after the Second World War After the Second World War, some Latvian writers were still in Latvia, whereas others were in the gulags or had emigrated to the West, mostly to Sweden.126 Because of this mass emigration during the Second World War, many Latvian writers published their works in other cities, like Stockholm or London. In these works, Stalin’s crimes against humanity were also published. In literature this led to the ‘56 generation’ in which Latvia also had representatives, such as Ojars Vacietis, Imants Ziedonis and Vizma Belsevica.127 Also, other atrocities like the labour camps in Siberia hit the streets via published books about the victims’ experiences. Janis Roze and his sons played an important role in this, being booksellers in Riga.128 Real nationalistic themes were only back in literature after Gorbachev introduced the glasnost and perestroika policies. After 1991, free writing and publishing fully existed again.129 Under the Ministry of Culture, the Latvian Literature Centre and the Latvian Litera- ture and Authors’ Associations were established.130

4.2.8 Latvian symbols

The Latvian flag One of the most important symbols of Latvia is its national flag.131 The Latvian flag was al-

consulted on 4 April 2012. 123 Ministry of Culture of the Republic of Latvia, ‘Literature’, retrieved from: http://www.culture.lv/en/heritage/33/, consulted on 4 April 2012. 124 Ibid. 125 Ministry of Culture of the Republic of Latvia, ‘Art’, retrieved from: http://www.culture.lv/en/heritage/9/, consulted on 4 April 2012. 126 Ministry of Culture of the Republic of Latvia, ‘Literature’, retrieved from: http://www.culture.lv/en/heritage/33/, consulted on 4 April 2012. 127 Ministry of Culture of the Republic of Latvia, ‘Art’, retrieved from: http://www.culture.lv/en/heritage/9/, consulted on 4 April 2012. 128 J. Brokken, Baltische zielen, Amsterdam: uitgeverij Atlas 2010, p. 20 and p.52. 129 K. Onwijn, Baltische landen, Amsterdam: KIT publishers 2007, p. 58-62. 130 Ministry of Culture of the Republic of Latvia, ‘Art’, retrieved from: http://www.culture.lv/en/heritage/9/, consulted on 4 April 2012. 131 Interview A01. 64 CULTURE

ready used in the 13th century, but the national flag was only officially adopted and used during the first period of independence from 1920 until 1940. During the Russian occupation, use of the national flag was forbidden, but after regaining independence, Latvia introduced the red-white-red flag again on 27 February 1990.132 There are different interpretations as to what the colours of the flag represent. The red colour would symbolise the willingness of the Latvians to give their lives to defend their freedom and liberty.133 The most common interpretation is that the flag represents a Latvian leader that was wrapped in a white sheet after getting wounded in a battle around 1280.134 The part of the sheet on which he was lying remained white and the edges turned red because of his blood loss. In the next battle, the same sheet was used as a flag and since then these colours have always been used by the Latvian tribes.135 The red colour of the flag is not the same red as used in the Russian flag; it is the colour maroon. Maroon is composed out of brown and purple. In the beginning of independence, it was very hard to get this colour of fabric in the Baltic states and therefore it now sometimes gets the name ‘Latvian Red’.136 Latvian law states that the Latvian flag should be used and treated as a highly respected ornament.137

Figure 4.1: The flag of Latvia.138

Coat of arms of Latvia The Latvian national coat of arms was created for Latvia’s independence and officially adopt-

132 Unknown, ‘Latvian flag’, retrieved from: http://www.worldatlas.com/webimage/flags/countrys/europe/latvia.htm, consulted on 28 May 2012. 133 Interview A01. 134 The Latvian Institute, ‘Latvian flag’, retrieved from: http://www.latvia.lv/content/national-symbols-latvia, consulted on 28 May 2012. 135 Interview A01. 136 Interview A02. 137 The Latvian Institute, ‘Latvian flag’, retrieved from: http://www.latvia.lv/content/national-symbols-latvia, consulted on 28 May 2012. 138 Wikimedia Commons, ‘Flag of Latvia’, retrieved from: http://upload.wikimedia.org/wikipedia/commons/thumb/8/84/Flag_of_Latvia.svg/500px-Flag_of_Latvia.svg.png, consulted on 10 June 2012. LATVIA AND THE EUROPEAN UNION 65 ed on 16 June 1921. It was designed by the Latvian artist Rihards Zari(%.139 Rihards Zari(% painted many illustrations for books and designed banknotes and stamps for Russia, the Sovi- et-Union, Belarus and the independent Latvia. Aside from the coat of arms, he also designed the new Latvian coins in 1922.140 In the coat of arms, national symbols of statehood and ancient historical districts are combined. The symbol for the Latvian statehood is the sun with the outgoing rays, symbolis- ing the 17 Latvian inhabited districts.141 The 3 stars stand for the 3 districts, Vidzeme, Latgale and Kurland-Semigallia, that were historically included into the united Latvia. Kurland- Semigallia, the western part of Latvia, is symbolised by the lion; Vidzeme and Latgale, the eastern part of Latvia, are symbolised by the griffin. The coat of arms of Latvia is surrounded by branches of an oak tree, one of Latvia’s national symbols, which shows how important nature is for Latvia.142 Also, the same maroon red as of the Latvian flag is used in the ribbon of the coat of arms. There are three types of the coat of arms: the large one, the small enhanced one and the small one. The three of them are used on different occasions.143 The large Coat of Arms of Latvia can be used by the State President, parliament, prime minister, Cabi- net of Ministers, government ministries, the Supreme Court and Prosecutor-General and diplomatic and consular missions. 144 The small Enhanced Coat of Arms of Latvia can be used by agencies of the Parliament, Cabinet of Ministers and institutions under (in)direct supervision of the government ministries.145 The small Coat of Arms can be used by other government institutions, municipal authorities and educational institutions on official documents.146

Figure 4.2: The large, small enhanced and small coat of arms of Latvia.147

139 The Latvian Institute, ‘Latvian coat of arms’, retrieved from: http://www.latvia.lv/content/national-symbols- latvia, consulted on 28 May 2012. 140 Encyclopedia, ‘Rihards Zari(%’ retrieved from: http://www.encyclo.co.uk/define/Rihards%20Zari%C5%86%C5%A1, consulted on 28 May 2012. 141 Interview A01. 142 K. Onwijn, Baltische landen, Amsterdam: KIT publishers 2007, pp. 40-42. 143 The Latvian Institute, ‘Latvian coat of arms’, retrieved from: http://www.latvia.lv/content/national-symbols- latvia, consulted on 28 May 2012. 144 Honorary consulate of the Republic of Latvia in Sri Lanka, ‘Coat of Arms of Latvia’, retrieved from: http://www.latvia.lk/Coat_of_Arms.html, consulted on 10 June 2012. 145 Ibid. 146 Ibid. 147 Ibid. 66 CULTURE

4.2.9 Latvian holidays

National holidays Latvian holidays play an important role in the search for Latvian culture and tradition.148 In their search for identity, the Latvians are an intermediate between the Estonians, with a clearer Finnish-Ugric identity, and the Lithuanians, with a history which involves close cooperation with Poland.149 The Latvians look back on a past of Indo-European cultures, with oppression of its own identity during Soviet occupation. Latvia has up to 12 special commemorative days, 5 of which celebrate a memorable historical fact.150 Latvia knows 35 holidays which follow a national historic event. It distinguishes 14 public holidays, when people receive days off from work, 12 commemorative days and 9 (inter)national holidays, with Christmas and Midsummer festival as the annual highlights.151 The illusion of a time when the Latvian culture was fresh and unspoiled is cherished, The influence of pre-Christian traditions in Latvian culture is conspicuously present. An incredibly high number of traditional songs, called ‘Dainas’, existfor every occasion.152 During these celebrations, the whole environment and the Latvian people themselves are decorated with flowers, plants and traditional costumes. Candles, campfire and light pit create a peaceful atmosphere for the Latvians. When offering flowers at ceremonies and celebrations, it is important to give an odd number of flowers.153 Latvian holidays are also influenced by the different countries that have occupied Latvia in the past, and therefore have different origins: Christian, pagan, nationalist, as well as communist. The most important holiday by far is the Christian Christmas celebration, that starts on the 24th of December and continues the day after.154 Because expression of religion was forbidden during the Russian domination, Christmas became part of the New Year celebration, including the Slavic ‘Santa Claus’, ‘Djed Moroz’. Another very important Christian celebration for Latvia is Easter, during which painting eggs is an important activity.155 The most important holiday with pagan origin is the Midsummer Festival, which is celebrated on the night between the 24th and 25th of June. Especially the younger generation goes deep into the forests in search of a mythical fern that can make wishes come true.156 There are

148 Ministry of Culture of the Republic of Latvia, ‘Heritage’, retrieved from: http://www.culture.lv/en/heritage/150/, consulted on 4 April 2012. 149 Interview B02. 150 Ministry of Culture of the Republic of Latvia, ‘Heritage’, retrieved from: http://www.culture.lv/en/heritage/150/, consulted on 4 April 2012. 151 Ibid. 152 Interview A01. 153 Interview B01. 154 Ministry of Culture of the Republic of Latvia, ‘Heritage’, retrieved from: http://www.culture.lv/en/heritage/150/, consulted on 4 April 2012. 155 Ibid. 156 Interview A01. LATVIA AND THE EUROPEAN UNION 67 also holidays that exist in honour of the national independence of Latvia.157 Furthermore, the Soviet deportations and the Holocaust are commemorated on fixed days. Lastly, the former Soviet holiday, ‘Labour day’, was renamed to ‘Day of spring’; only the Russian minority celebrates that day, according to old Russian traditions.158

Personal celebrations Latvians celebrate their birthday and their ‘Name Day’.159 They have a name day calendar with an average of three names for each day. Name days are celebrated especially at school or work and guests often arrive uninvited.160 This differs from birthdays, where guests are invited. At both parties the house is decorated, snacks and drinks are prepared and flowers and gifts are brought.161 Wedding traditions can contain some Christian elements, especially in the south-eastern coastal region and Letgale.162 Spring is seen as the best time to choose a partner and autumn as the most suitable time to marry.163 The wedding takes three days to a week and often includes rituals. The replacement of the crown of the bride by a scarf or other head-covering materials, called ‘mi*o%ana’, is a highlight.164 According to pre-Christian tradition, the goddess Laima determines people’s destiny, regarding age, instead of happiness or success.165 Rituals surrounding death are very important in Latvia, as they are supposed to make the transition to the other world more acceptable and also support the relatives.166 Great value is attached to respect for the deceased; the coffin should contain personal items and beautiful clothing, and be placed in a well-kept grave. Again, the traditional songs are very important during the rituals.167

4.3 Language

4.3.1 The Latvian language The official state language of Latvia is Latvian;168 a rare language that is part of the Indo- European language family and which, together with Lithuanian, forms the Baltic branch. The

157 Interview B01. 158 Ministry of Culture of the Republic of Latvia, ‘Herritage’, retrieved from: http://www.culture.lv/en/heritage/150/, consulted on 4 April 2012. 159 Interview A01. 160 Ibid. 161 Interview B01. 162 Interview B02. 163 Interview A01. 164 Ministry of Culture of the Republic of Latvia, ‘Heritage’, retrieved from: http://www.culture.lv/en/heritage/150/, consulted on 4 April 2012. 165 Ibid. 166 Ibid. 167 Ibid. 168 ‘Constitution of the Republic of Latvia’, Article 4, as last amended on 8 April 2009, retrieved from: http://www.saeima.lv/en/legislation/constitution/, consulted on 4 March 2012. 68 CULTURE

Latvian language began to emerge in the seventh century when the languages of the ancient Latvian tribes fused, thereby incorporating many borrowed words from the language of the Livonians, a Finno-Ugric tribe living in Latvia.169 Also, loanwords from German, Scandinavi- an, Old Russian and Romance languages entered the Latvian language in the course of the centuries.170 Nowadays, the Latvian language knows three dialects, namely Livonian, Latgali- an and the Middle Dialect. The three main dialects in their turn are divided in regional dialects as well. The Middle Dialect forms the basis of today’s standard Latvian.171 Due to the country’s ethnic diversity, Latvia is characterised by a large presence of minority languages.172 The ethno-demographic population includes only 62.1 % ethnic Latvians. The rest of the population consists of 26.9 % Russians, 3.3 % Belarusians, 2.2 % Ukrainians, 2.2 % Poles and 3.3 % of other ethnic groups.173 The largest percentage of minority groups in Latvian society speaks Russian as their first language, together they make up 32.4 % of the population. Especially in the east of Latvia a large portion of the population is Russian- speaking.174 Among the ethnic Latvians, the Latvian language is considered to be the most important aspect of Latvian culture and identity.175 Worldwide, around 1.5 million people consider Latvian to be their native language, of whom around 1.4 million people live in Latvia. Latvia’s total population is around 2.23 million inhabitants, which means that only 63 % of the Latvian population considers Latvian to be their mother tongue.176 1.9 million people in Latvia speak the official state language, which accounts for 79 % of the population.177 The fact that a significant number of people living in Latvia do not speak the Latvian language is considered a ‘generation problem’.178 Only the people aged 40 and above, who received education in the Soviet Union, might not speak Lat- vian. Among the younger generation, almost all Latvian inhabitants speak Latvian.179 There- fore, it is expected that in the future the Russian-Latvian language dichotomy might resolve itself.180

169 O. Dahl and M. Koptjevskaja-Tamm, The Circum-Baltic languages: past en present, Philadelphia: John Be- jamins B.V. 2001, pp 3-9. 170 Ibid., pp 3-20. 171 Ibid., pp 20-40. 172 A. Inder Singh, Democracy, ethnic diversity and security in post-communist Europe, Westport: Greenwood Publishing Group 2001, pp. 101-102. 173 CIA The World Factbook, ‘Latvia’, people and society, https://www.cia.gov/library/publications/the-world- factbook/geos/lg.html 174 A. Inder Singh, Democracy, ethnic diversity and security in post-communist Europe, Westport: Greenwood Publishing Group 2001, pp. 101-102. 175 Interview R18. 176 M. Lewis (ed.), Ethnologue: Languages of the World, Dallas, Tex.: SIL International 2009, retrieved from: http://www.ethnologue.com/, consulted on 4 March 2012. 177 O. Dahl en M. Koptjevskaja-Tamm, The Circum-Baltic languages: past en present, Philadelphia: John Beja- mins B.V. 2001, pp 3-40. 178 Interview D05. 179 Ibid. 180 Interview R41. LATVIA AND THE EUROPEAN UNION 69

4.3.2 Language policy National Language Law Since 1988, Latvian is proclaimed as the official language of Latvia, although it was not yet formalised by law.181 Already in 1989 Latvia tried to institute Latvian as the official state language, but it was not until 1992 that the first Language Law was adopted.182 The 1992 Lan- guage Law was inspired by two sources. Firstly, language legislation of the first period of Latvian independence (1918-1940) was well developed and thus served as a sound basis.183 Secondly, language legislation in other states were models for the Latvian law. Especially the language laws of Canada (as regards the French language minority in Québec) were taken as an example for the language laws in Latvia.184 The purpose of the Latvian language law was described as ‘the integration of national minorities into Latvian society while respecting their right to use their mother tongue or any other language’.185 Since 1998, the official status of the Language Law has been included in the constitution under Article 4.186 On 9 December 1999, a new Language Law was adopted by the parliament and it has not been amended since then.187 The 1999 law is more liberal than its predecessor of 1992. The more liberal character of the 1999 law was partly stimulated by the anticipated members of the EU and NATO.188 It pays more attention to respect for the regional and minority languages in Latvia. The goal of the 1999 law is described in article 1 as follows:189

‘The purpose of this Law shall be to ensure: 1) the preservation, protection and development of the Latvian language; 2) the preservation of the cultural and historical heritage of the Latvian nation; 3) the right to use the Latvian language freely in any sphere of life in the whole territory of Lat- via; 4) the integration of national minorities into Latvian society while respecting their right to use their mother tongue or any other language; 5) the increase of the influence of the Latvian language in the cultural environment of Latvia by

181 Decision on status of the Latvian language (Supreme Council of Latvian SSR, 06.10.1988.) 182 I. Druviete, ‘Language Policy and Protection of the State Language in Latvia’, Sociolingüística internacional, winter 2001, retrieved from: http://www.linguapax.org/congres/taller/taller3/Druviete.html, consulted on 4 March 2012. 183 Ibid. 184 Ibid. 185 ‘State Language Law 1992’, Article 1, as last amended on 31 March 1992 , retrieved from: http://www.vvk.lv/index.php?sadala=135&id=165, consulted on 4 March 2012. 186 ‘Constitution of the Republic of Latvia’, Article 4, as last amended on 8 April 2009, retrieved from: http://www.saeima.lv/en/legislation/constitution/, consulted on 4 March 2012. 187 R. Phillipson, Right to language: equity, power and education, Mahawah: Lwarence Elbraum Publishers 2000, pp. 83-91. 188 Ibid., pp. 83-91. 189 ‘State Language Law 1999’, Article 1, as last amended on 9 December 1999, retrieved from: http://www.cilevics.eu/minelres/NationalLegislation/Latvia/Latvia_Language_English.htm, consulted on 4 March 2012. 70 CULTURE

promoting a faster integration of society’.

The language law has consequences for the educational system. Regarding education, the language law stipulates that a minimum of 60 % of primary and secondary education should be in Latvian, and a maximum of 40 % can be in another language. (‘the 40/60 rule’). Higher education should be in Latvian.190 To control this rule, there is a so-called State Language Inspectorate, which monitors whether schools live up to the 40/60 rule.191 According to opponents of the 40/60 rule, children should get the opportunity to receive education in their mother tongue, because that would increase the school performances of the Russian-speaking children.192 Others fear that the Latvian language-rule in higher education will keep foreign students away.193 Supporters of the 40/60 rule state that the achievements of the national minority schoolchildren have not deteriorated as a result of the norm.194 More on this topic can be found in section 8.2.6, page 324.

4.3.3 International perspective regarding language In the 1990s, Latvia was preparing for membership of the EU and NATO. Acquiring membership of these organisations was a great stimulus for adopting international conventions and amending national laws, also regarding language policy.195 In 1995, Latvia signed the Council of Europe’s Framework Convention for the Protection of National Minorities.196 The reaction of the OSCE High Commissioner on National Minorities to the new Language Law in 1999 was that it is ‘essentially in conformity with Latvia's international obligations and commitments’.197 In 2000, he stated that the government regulations were ‘essentially in conformity with both the law and Latvia's international obligations, but that specific matters [would] have to be reviewed upon Latvia's anticipated ratification of the Framework Convention for the Protection of National Minorities’.198 The actual ratification took place in 2005. However, Latvia did not sign the European Charter for Regional or Minority Languages and does not plan to so.199 In 2003, international organisations and NGOs provided a list of recommendations to

190 Interview D05. 191 Interview D02. 192 Ibid. 193 Interview D05. 194 B. Zepa, How integrated is Latvia society?, Riga: The Academic Press of the UoL 2010, pp.193-224. 195 R. Phillipson, Right to language: equity, power and education, Mahawah: Lwarence Elbraum Publishers 2000, pp. 83-91. 196 Ministry of Foreign Affairs of the Republic of Latvia, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/4649/framework/ , consulted on 4 March 2012. 197 OSCE Press Statement, ‘High Commissioner welcomes State Language Law in Latvia’, retrieved from: http://www.osce.org/item/4702.html., consulted on 18 Mach 2012 198 OSCE, ‘Human Rights in Latvia in 2000’ p. 40, retrieved from: http://www.humanrights.org.lv/upload_file/Cilvektiesibas%20Latvija%202000.pdf , consulted on 18 March 2012. 199 Council of Europe, Third report on Latvia by ECRI, 2008, Paragraph 4. LATVIA AND THE EUROPEAN UNION 71

Latvia regarding the rights of national minorities. Participants included the Parliamentary As- sembly of the Council of Europe (PACE), the UN Committee on the Rights of the Child, the Open Society Institute, and the Human Rights Committee. One of the recommendations was to be more flexible in the introduction of bilingual education.200 As Latvia did little with the given advice, more recommendations followed during the following years. In 2007, the Council of Europe recommended to ‘facilitate use of minority languages in written correspondence between people belonging to the national minorities and authorities’.201 In 2008, the UN Special Rapporteur on contemporary forms of racism, racial discrimination, xenophobia and related intolerance recommended Latvia to ‘revisit language policy, aiming to better reflect the multilingual character of society’.202 In their Third Report on Latvia, the European Commission against Racism and Intolerance recommended to ‘give priority to constructive and non-obligatory measures, encouraging the Russian-speaking population to learn and use Latvian’, but also to ‘preserve and encourage the use of minority languages without infringing on the status and teaching of the official language’.203 Despite the numerous recommendations and claims given by international organisations, the Language Law has not been amended since its adoption in 1999.

4.3.4 Referendum Background On 18 February 2012 a referendum took place in Latvia on making Russian the second official language of Latvia.204 The referendum was initiated by the Russian-speaking minority in the country and was a reaction, protesting against an earlier initiative of National Alliance. In this earlier initiative, National Alliance proposed that all publicly financed schools would have to use Latvian exclusively. In 2010 National Alliance started to collect signatures to force a referendum on this question. By 9 June 2011, they had gathered 120 433 signatures. Because a minimum of 153 232 signatures was required to hold a referendum, the initiators failed to force a referendum.205 On 15 February 2011 the youth movement United Latvia initiated a protest action against the initiative of National Alliance. The movement announced the idea of making Russian an

200 Ministry of Foreign Affairs of the Russian Federation, ‘List of recommendations and claims to Latvia as regards rights of national minorities’, 17 December 2003, retrieved from: http://www.mid.ru/bdomp/ns- dgpch.nsf/05a95604fc81125843256da400378f3b/432569ee00522d3c43256e0000316b43!OpenDocument, , consulted on 18 March 2012. 201 Council of Europe, ‘Assessment of the progress made in implementing the 2003 recommendations of the Council of Europe Commissioner for Human Rights’, Strasbourg: 16 May 2007, CommDH(2007)9. 202 UN Special Rapporteur on contemporary forms of racism, racial discrimination, xenophobia and related intolerance, ‘Report on mission to Latvia 2008’. 203 ECRI, ‘Third report on Latvia’, CRI(2008)2, adopted on 29 June 2007, article 126 and 127. 204 Central Election Commission of Latvia, ‘referendum on the Draft Law "Amendments to the Constitution of the Republic of Latvia"’, http://web.cvk.lv/pub/public/28361.html 205 K.S., ‘Latvia’s referendum: what’s my language?’, The Economist, 14 February 2012 . 72 CULTURE

official language alongside Latvian.206 On 4 March 2011, United Latvia, together with the newly created organisation Mother Tongue, started to collect signatures for a referendum petition. The signature collection was led by activists Vladimir Linderman (former leader of the Latvian branch of the Russian National Bolshevik Party), Yevgeny Osipov (leader of ‘Osipov Party’) and Aleksandrs Gaponenko (director of the Institute of European Studies, economist).207 It has been suggested that the initiative for the referendum was born as a provocation from Moscow; it would be a move by the Kremlin to make Latvia more ‘pro-Russian’.208 The organisations gathered 187 378 signatures, which was well above the minimum threshold of 154 379 signatures. The number of signatures was therefore enough to trigger a referendum.209 See Figure 4.3 below for the numbers of collected signatures. On 18 February 2012 the question of the referendum was: ‘Do you support the adoption of the Draft Law “Amendments to the Constitution of the Republic of Latvia” that provides for the Russian language the status of the second official language?’210 In order to have the referendum result in a decision, at least 771 893 Latvian citizens (half of the eligible voters) had to cast a vote. From those, half them had to approve the initiative for Russian to become the second state language.211 In the weeks leading up to the referendum, Latvian politicians enounced their advice to the electorate. President Berzins, Prime Minister Dombrovskis, and Speaker of the parliament 'bolti(a called on their electorate to vote against the adoption of the Russian language.

206 The Voice of Russia, ‘Activists want Russian to be Latvia’s second language’, 16 February 2011, retrieved from: http://english.ruvr.ru/2011/02/16/44711142.html, consulted on 16 March 2012. 207 EuroTopics, ‘Don’t panic at Russian referendum in Latvia’, 9 February 2012, retrieved from: http://www.eurotopics.net/en/home/presseschau/archiv/article/ARTICLE100367-Don-t-panic-at-Russian- referendum-in-Latvia, consulted on 8 April 2012. 208 Interview R41. 209 Central Election Commission of Latvia, ‘Collection of signatures for initiation of the Draft law “Amendments to the Constitution of the Republic of Latvia"’, retrieved from: http://web.cvk.lv/pub/public/30189.html, consulted on 9 April 2012. 210 Central Election Commission of Latvia, ‘referendum on the Draft Law "Amendments to the Constitution of the Republic of Latvia"’, retrieved from: http://web.cvk.lv/pub/public/28361.html, consulted on 9 April 2012. 211 RIA Novosti, ‘Latvia to hold referendum on Russian as second language, 18 February 2012, retrieved from: http://en.rian.ru/world/20120218/171373362.html, consulted on 8 April 2012. LATVIA AND THE EUROPEAN UNION 73

Figure 4.3: Number of collected signatures per 1 000 people for organising the Russian Language Referen- dum.212

In contrast to this position, Mayor Nils U%akovs of Riga (an ethnic Russian) called on his electorate for a ‘Yes’ vote.213 Most political parties also expressed their advice. For example, the Union of Greens and Farmers strongly recommended their supporters to vote against the referendum.214 Concord Centre (CC) was the only political party that did not enounce a concrete advice on behalf of the whole party, because the party was internally divided about the question. CC only called on their supporters to vote, in their own interests.215

Outcome The referendum showed a high turnout of 71.12 %. Among these voters, 74.80 % voted against the proposal, 24.88 % voted for the proposal and 0.32 % of the votes were invalid.216 While the results provide a clear rejection of the proposal, there were great differences in the outcome among the different cities and regions in Latvia. Figure 4.4 below shows a geographical pattern in the referendum outcome.217 The geographical differences in voting are visual- ised by the use of the colour patterns in the figure. Figure 4.4 clearly shows that the south- eastern part of Latvia, where most members of the Russian-speaking minority live, supported the idea of introducing Russian as second official state language. Voters in the middle and far

212 Electoral Geography, ‘Latvia, Russian language status referendum 2012’, retrieved from: http://www.electoralgeography.com/new/en/countries/l/latvia/latvia-russian-language-status-referendum- 2012.html, consulted on 9 April 2012. 213 RIA Novosti, ‘Latvia to hold referendum on Russian as second language, 18 February 2012, retrieved from: http://en.rian.ru/world/20120218/171373362.html, consulted on 8 April 2012. 214 Interview R63. 215 Interview R06. 216 Central Election Commission of Latvia, ‘referendum on the Draft Law "Amendments to the Constitution of the Republic of Latvia"’, retrieved from: http://web.cvk.lv/pub/public/28361.html, consulted on 9 April 2012. 217 A. Kireev, Latvia: Russian Language status referendum’, Electoral Geography 2.0, http://www.electoralgeography.com/new/en/countries/l/latvia/latvia-russian-language-status-referendum- 2012.html, consulted on 9 April 2012. 74 CULTURE

west of the country mainly rejected the referendum’s proposal. For example in Daugavpils, Latvia’s second-largest city located in the southeast with a large Russian-speaking majority, 85.18 % of the voters voted ‘Yes’, while only 14.39 % of them voted ‘No’ to the referendum.218 Alsungas Novads, a city in the west of Latvia, shows an opposite outcome. Here, a majority of 99,23% voted against the proposal, while only 0.55 % said ‘Yes’ to Russian as second official state language.219

Figure 4.4: Outcome of the Latvian Russian Language Referendum 2012 in percentages.220

Reactions and analysis The strong ‘No’ of the Latvian voters is seen as a form of revenge against the Soviet Union’s forced Russification of Latvia.221 Analysts state that the turnout of over 70 % indicates the strong ‘feeling among many ordinary Latvians, who are keen to distance themselves culturally from their former Soviet rulers’.222 For many voters, the Latvian language symbolises Lat- vian independence. Therefore, supporting Russian as the second official state language would be at odds with Latvia’s gained independence.223 According to the Central Election Commission, the Latvians themselves considered the referendum ‘a storm in a teacup’, because neither the Latvian-speakers nor the Russian-

218 Ibid. 219 Ibid. 220 Ibid. 221 Euronews, ‘Latvians say ‘no’ in Russian language vote’, 19 February 2012, retrieved from: http://www.euronews.com/2012/02/19/latvians-say-no-in-russian-language-vote, consulted on 8 April 2012; Europa.Nu, ‘Letland verwerpt Russisch als tweede taal’, retrieved from: http://www.europa- nu.nl/id/vix4jotj09zc/nieuws/letland_verwerpt_russisch_als_tweede?ctx=vh7douknndsz, consulted on 6 March 2012. 222 Euronews, ‘Latvians say ‘no’ in Russian language vote’, 19 February 2012, retrieved from: http://www.euronews.com/2012/02/19/latvians-say-no-in-russian-language-vote, consulted on 8 April 2012. 223 Europa.Nu, ‘Letland verwerpt Russisch als tweede taal’, retrieved from: http://www.europa- nu.nl/id/vix4jotj09zc/nieuws/letland_verwerpt_russisch_als_tweede?ctx=vh7douknndsz, consulted on 6 March 2012. LATVIA AND THE EUROPEAN UNION 75 speakers in Latvia encounter language troubles in daily life.224 Some Latvians see the outcome of the referendum as a positive sign for Latvian identity. According to them, Latvian people became more self-confident after the referendum about how to defend the national interests against the Kremlin in Moscow.225 Critics of the referendum stated that a large part of the Russian-speaking community in Latvia could not vote in this referendum, because they hold a non-citizen status.226 290 660 Russian-speaking inhabitants, who account for 14.1 % of the population, currently hold the non-citizen status and thus have no right to vote.227 Vladimir Putin, then-prime minister of Russia, commented on the results in a statement released on 27 February 2012.228 Putin was scornful of the results and addressed the fact that almost 300 000 non-citizens, most of them ethnic Russians, were not allowed to participate in the referendum. In response to the referendum, Putin stated that the status of non-citizens in Latvia and Estonia is ‘shameful’.229 If Russian had become the second official language of Latvia, it might have become an official language of the European Union as well, with all the consequences this entails. One option would be to ask the other 26 EU Member States to make Russian a fully-fledged official EU language, with EU funds used to translate all EU documents and to provide interpretation at all meetings. Another option would be to make it a ‘co-official’ EU tongue, with Latvia paying the EU to use Russian on selected papers and events.230 Because the referendum has been rejected, the need for making Russian an official language of the EU is no longer an urgent topic. However, the rejection did not make the question irrelevant. Tatjana +danoka, a Russophone Latvian Green MEP, stated that the EU should make Russian an official language anyway because it is the mother tongue of 9 million EU citizens in the Baltic countries and south-eastern Europe.231 Others propose to make Rus- sian a ‘supportive’ language or a ‘language of communication’ in some Latvian districts.232 All in all, the language referendum has brought up a sensible and controversial topic in Lat- via, on which the discussion might be continued in the future.

224 Andrew Rettman, ‘Latvia vote poses question on Russian as EU language’, EU Observer, 15 February 2012, retrieved from: http://euobserver.com/851/115269, consulted on 6 March 2012. 225 Interview R41. 226 Natalya Kovalenko, ‘Russian speaking people in Latvia glad about referendum results’, The Voice of Russia, 19 February 2012. 227 Register of Office of Citizenship and Migration Affairs, 2011. 228 The Baltic Times, Putin: Status of non-citizens in Latvia and Estonia is "shameful", 27 February 2012, retrieved from: http://www.baltictimes.com/news/articles/30668/, consulted on 27 February 2012. 229 Ibid. 230 Andrew Rettman, ‘Latvia vote poses question on Russian as EU language’, EU Observer, 15 February 2012, retrieved from: http://euobserver.com/851/115269, consulted on 6 March 2012. 231 Ibid. 232 Interview D05. 76 CULTURE

4.4 Religion

4.4.1 Historical development In the Middle Ages, the Baltic region was the last pagan bulwark of Europe, while the Chris- tianisation of the Baltics proceeded laboriously.233 In fact, Latvia was one of the last regions in Europe to be Christianised. It was not until the coming of the Germans in the thirteenth century that the Latvians were successfully subjected to Christianity. Although the Christian leaders tried to incorporate the new Christian norms, some pagan rituals continued to exist persistently.234 During the first period of independency and again in the years after regaining independence in 1991, the importance of the pagan religion expanded, as part of the re- invented Latvian identity.235 After the Russians took control over Latvia in 1795, a process of Russification took off. Part of the Russification was the spread of the Russian-Orthodox religion.236 The independent period of Latvia from 1918 until 1940 was characterised by religious relaxation. Official statistics indicated a fairly broad spectrum of religious traditions. In 1935 however, Evangelical Lutheranism was the most widespread belief, claiming the attachment of 55.2 % of the population. Roman Catholicism was the second most popular Church, attached by 24.5 % of the population.237 When the Soviet Union captured the Baltic states in 1940, the Soviets immediately introduced their atheist state politics. In accordance with the communist rule, every effort was made to curtail the influence of religion.238 Churches, cathedrals, monasteries and other religious buildings were nationalised or destroyed, and clerics were prosecuted, exiled or killed. Only the Russian-orthodox church had an exceptional position and acquired some privileges, albeit under the control of the state security service KGB.239 With the coming of the ‘glasnost politics’ of Soviet leader Gorbachev in 1986, a more liberal religious climate dawned.240 In 1990, the Law on Freedom of Conscience was adopted in the entire Soviet Union, which provided religious freedom.241 After the declaration of independence in 1991, religious freedom was included in Lat- via’s constitution. Orthodox churches declared themselves independent from the Russian-

233 Interview R36. 234 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 15-22. 235 M. Tomka, Expanding religion. Religious revival in post-communist Central and Eastern Europe, Berlin: Walter de Gruyter GmbH&Co 2011, p. 212. 236 Interview R36. 237 M. Tomka, Expanding religion. Religious revival in post-communist Central and Eastern Europe, Berlin: Walter de Gruyter GmbH&Co 2011, pp. 212-214. 238 J. Hiden and P. Salmon, The Baltic Nations and Europe: Estonia, Latvia and Lithuania in the Twentieth Cen- tury, Essex: Longman Group UK 1991, p. 135. 239 Ibid., p. 135. 240 J. Romuald, Misiunas and R. Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, p. 289-291. 241 Ibid., p. 291. LATVIA AND THE EUROPEAN UNION 77

Orthodox church, which removed them from the Moscow patriarchy. Possessions of the church were restored to religious authorities.242 In the first years of sovereignty a religious réveil took place.243 Firstly, religions that were present in earlier periods gained ground again, for example Evangelical Lutheranism and Roman Catholicism. Secondly, new religious groups took the opportunity to proselytise and recruit members in Latvia. Baptists, Pentecos- tals, Seventh-Day Adventists, animists, Hare Krishna and the Salvation Army have all attempted to fill the void in Latvia's spiritual life since 1990.244 However, the initial revival of religions seems to have died down. Recent numbers show low percentages of religiously active citizens: only 36.3 % of Latvian inhabitants are registered adherents.245

4.4.2 Religion breakdown Nowadays, religion breakdown is highly diversified among Latvian inhabitants. Most religious Latvians follow Lutheranism, Roman Catholicism or Latvian Orthodoxy. Religious minority groups in Latvia include Baptists, Evangelic Christians, Jews, Muslims, Hare Krish- nas and Jehovah Witnesses. In addition, a large proportion of the country claims to practice no religion, namely 63.7 % of the Latvian population.246

Religion Percentage of popu- Number of congrega- Membership in congre- lation tions gations Roman Catholic 22.7% 250 500 000 Lutheran 19.7% 297 433 000 Orthodox Chris- 16.8% 119 370 000 tian

Table 4.1: Religion breakdown of Latvia in 2010.247

The main religion traditionally practiced in Latvia is Christianity, without any church pre- dominating. As can be read from Table 4.1, the Roman Catholic Church is followed by the largest part of Latvian Christians, with 500 000 members. Roman Catholic belief has been present in the area that now constitutes Latvia since the mid-11th century; the first Christian church was built in 1048 in Courland.248 The Roman Catholic Church of Latvia is divided

242 M. Tomka, Expanding religion. Religious revival in post-communist Central and Eastern Europe, Berlin: Walter de Gruyter GmbH&Co 2011, pp. 212-214. 243 Ibid., p. 61. 244 Interview R36. 245 CIA World Factbook, ‘Latvia’, ‘religion’, retrieved from: https://www.cia.gov/library/publications/the-world- factbook/geos/lg.html, consulted on 18 March 2012. 246 Religious Encyclopedia, retrieved from:http://www.bibelesbiedriba.lv/religiju-enciklopedija/statistika.html, consulted on 9 April 2012. 247 Ibid. 248 A.Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 15-22. 78 CULTURE

into one archdiocese (Archdiocese of Riga) and three dioceses (Diocese of Jelgava, Diocese of Liep#ja and Diocese of R&zekne-Aglona). Historically, there has been an obvious geographical pattern in the religion breakdown in Latvia. For centuries, the east of Latvia, particularly the Latgale region, has been predominantly Catholic.249 The reason for this is the fact that the eastern part of Latvia, which is now called Latgale, was part of the Catholic Poland from 1583 until 1629. The Evangelical Lutheran Church is the second largest church in Latvia and counted 433 000 members in2010.250 Latvia's Lutheran heritage dates back to the Reformation. The Evan- gelical Lutheran Church of Latvia is divided in one archdiocese (archdiocese of Riga) and two dioceses (diocese of Liep#ja and diocese of Daugavpils).251 The third largest Christian Church in Latvia is the Orthodox Church. It had 370 000 members in 2010. The Latvian Orthodox Church is a self-governing Eastern Orthodox Church, but falls under the jurisdiction of the Patriarchate of Moscow. Orthodoxy was founded in Latvia in the 11th century, but the country remained mostly pagan until the 13th century.252 After Latvia was annexed to the Russian Empire in the 18th century, Orthodox presence increased substantially.253 The Orthodox Church initially remained foreign to the Latvians. It was not until the 1840 that the Latvian Orthodox Church as a body started to include ethnic Latvians as well as Russians.254 In modern Latvia, there are 350 000 Orthodox Church members. The vast majority of them are ethnic Russians and other immigrants living in Latvia.255 Besides these three forms of Christianity, there are some religious minority groups in Latvia. The total Muslim population in Latvia in 2010 was estimated at about 2000 people. In the same year, 9 915 persons identified themselves as ethnically Jewish. Table 4.2 shows the number of congregations and membership of congregations of the religious minority groups in Latvia in 2010.256

Religion Number of congregations Membership in congregation Buddhist 3 110 Baptists 93 6 874 Jehovah’s Witnesses 14 156

249 M. Tomka, Expanding religion. Religious revival in post-communist Central and Eastern Europe, Berlin: Walter de Gruyter GmbH&Co 2011, pp. 94-100. 250 United States Department of State, ‘2010 Report on International Religious Freedom’ - Latvia, Section I, 17November2010, retrieved from: http://www.state.gov/j/drl/rls/irf/2010/148951.htm, consulted on 10 April 2012. 251 M. Tomka, Expanding religion. Religious revival in post-communist Central and Eastern Europe, Berlin: Walter de Gruyter GmbH&Co 2011, pp. 94-100. 252 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 15-22. 253 Ibid., pp. 15-22. 254 A. Plakans, The Latvians, Stanford: Hoover Institution Press 1995, pp. 15-22. 255 United States Department of State, ‘2010 Report on International Religious Freedom – Latvia’, Section I,17 November 2010, retrieved from: http://www.state.gov/j/drl/rls/irf/2010/148951.htm, consulted on 10 April 2012. 256 Ibid. LATVIA AND THE EUROPEAN UNION 79

Hare Krishna 11 133 Methodists 13 685 Seventh-Day Adventist 51 3 977

Table 4.2: Religious minority groups in Latvia by number of congregations and membership of congregations in 2012.257 A small but remarkable phenomenon in modern-day Latvia is the revived interest in medieval, pagan rituals.258 The biggest neopagan movement in modern Latvia is Dievtur!ba. Adherents call themselves Dievtu,i, which literally means ‘Dievs keepers’ or ‘people who live in harmony with Dievs’. Dievtur!ba claims to be a modern revival of the folk religion of the Latvians before Christianisation in the 13th century. The Dievtu,i movement was founded in 1925 by Ernests Brasti(% and symbolised the reinvention of Latvian identity.259 The religion is primarily based on Latvian folklore, old folk songs (‘Dainas’, see section 4.2.2) and mythology.260 During the Soviet time from 1940 onwards, it was forcibly suppressed by Russian communists.261 Since Latvia’s independence in 1991, the religion has revived.262 Nowadays, approximately 600 persons are officially active members.263 Because the religious breakdown is so diversified in Latvia, religion is not considered as a nationally binding factor of Latvian culture.264

4.4.3 Religion in Latvian law There is no state religion in Latvia. However, the Latvian government makes a legal distinction between traditional religious groups and new religious groups.265 Traditional groups include the Lutherans, Catholics, Orthodox Christians, Old Believers, Baptists, Methodists, Ad- ventists, and Jews. All other religious groups belong to the new groups. By the 1995 Law on Religious Organisations, traditional religious groups enjoy certain rights and privileges that non-traditional groups do not enjoy.266 So far, there has not been much protest against this legal distinction from the side of the new religious groups in Latvia.267 Religion-specific laws have been established that define relations between the state and

257 Ibid. 258 Interview R36. 259 J.Tupesu, ‘The ancient Latvian religion – Dievtu,i’, Lithuanian Quarterly Journal of arts and sciences, Vol- ume 33, No.3 (1987). 260 Ibid. 261 M. Tomka, Expanding religion. Religious revival in post-communist Central and Eastern Europe, Berlin: Walter de Gruyter GmbH&Co 2011, pp. 94-100. 262 Ibid., pp. 94-100. 263 United States Department of State, ‘2010 Report on International Religious Freedom – Latvia’, Section I, 17 November 2010, retrieved from: http://www.state.gov/j/drl/rls/irf/2010/148951.htm, consulted on 10 April 2012. 264 Interview R18; interview R36. 265 Interview R36. 266 United States Department of State, ‘2010 Report on International Religious Freedom – Latvia’, Section II, 17 November 2010, retrieved from: http://www.state.gov/j/drl/rls/irf/2010/148951.htm, consulted on 10 April 2012; interview R36. 267 Interview R36. 80 CULTURE

each of the traditional religious groups.268 Firstly, there are differences in rights in the Eccle- siastical Council (EC).269 The EC is an advisory body that comments on religious issues to the government. Only traditional religious groups are represented in the Ecclesiastical Council. This limits the input of other religious organisations with regard to government decisions about religious matters.270 Secondly, the Law on Religious Organisations stipulates that only representatives of traditional churches may teach religion in public schools. The government provides funds for this education. Other religious groups may provide religious education only in private schools.271 The Latvian law does not require any registration of religious groups.272 However, the 1995 Law on Religious Organisations accords religious organisations certain rights and privileges if they register. Examples of these privileges are status as a separate legal entity for owning property or for financial transactions; tax benefits for donors; and easing of the rules for holding public gatherings.273

4.4.4 Report on religious freedom The U.S. Department of State annually publishes the International Religious Freedom Report of all countries in the world. In their International Religious Freedom Report 2010 on Latvia, the U.S. Department of State came to the following conclusions:274 In section II, the report analyses the status of government respect for religious freedom. Firstly, it states that the Latvian constitution provides for freedom of religion, and that other laws and policies contributed to the generally free practice of religion. Secondly, the report states that the Latvian government generally respects religious freedom in practice. However, bureaucratic problems persist for some minority religious groups. According to the 2010 report, the distinction in traditional and new religious groups results in increased bureaucratic regulations and requirements for new religious groups. These regulations and requirements are not applicable to traditional ones. Furthermore, the report states that there were no reports of religious prisoners or detainees in the country, nor were there reports of forced religious conversion.275 In section III, the report analyses the status of societal respect for religious freedom. It concludes that anti-Semitic sentiments persist in some segments of the Latvian society. These were manifested in occasional public comments and resistance to laws and memorials de-

268 United States Department of State, ‘2010 Report on International Religious Freedom – Latvia’, Section II, 17 November 2010, retrieved from: http://www.state.gov/j/drl/rls/irf/2010/148951.htm, consulted on 10 April 2012. 269 Interview R36. 270 United States Department of State, ‘2010 Report on International Religious Freedom – Latvia’, Section II, 17 November 2010, retrieved from: http://www.state.gov/j/drl/rls/irf/2010/148951.htm, consulted on 10 April 2012. 271 Ibid. 272 Interview R36. 273 United States Department of State, ‘2010 Report on International Religious Freedom – Latvia’, Section II, 17 November 2010, retrieved from: http://www.state.gov/j/drl/rls/irf/2010/148951.htm, consulted on 10 April 2012. 274 Ibid. 275 Ibid. LATVIA AND THE EUROPEAN UNION 81 signed to foster Holocaust remembrance. Moreover, the U.S. Department of State discovered a suspicious attitude of Latvian inhabitants toward Ecumenism. Particularly the traditional religious groups have adopted a distinctly reserved attitude towards this relatively new concept.276 4.5 Building Latvian identity

After 50 years of Russian occupation, Latvia regained independence in 1991.277 The relatively late formation of a Latvian nation, together with several dominations by foreign powers, have formed a major obstacle for the development and formation of Latvian culture and identity.278 Considering the weakly developed Latvian culture, Latvia was looking for ways to build a strong ‘Latvian identity’.279 Building Latvian identity can be analysed on a national, European and Baltic level.

4.5.1 National identity Firstly, the building and protection of Latvian identity can be approached from a national perspective. Immediately after regaining independence on 6 September 1991, a quick process of ‘de-Sovietisation’ took off. While all forms of Soviet symbolism were being removed, Latvi- an national symbols were increasingly introduced.280 The first period of Latvian independence (1918-1940) became a prime inspiration and source for the present independence. The Latvi- ans fell back on the national culture and identity of 1918-1940, as the ideal example for the coming era of Latvian independence. The Russian and Soviet culture had to make way for the Latvian culture and identity.281 A first expression of de-Russification was the elimination of all Russian symbols and replacing them with Latvian ones. Part of this process was the restoration of old statues and monuments dating from the first period of Latvia’s independency. Monuments of triumph and statues of Latvian war heroes were honoured in particular.282 Moreover, the Latvian flag was re-introduced. Just like in 1922, the red-and-white flag was adopted in 1991 as the national flag of the Republic of Latvia (see also page 64).283 The Bank of Latvia began introducing the ‘Latvian ruble’ as a parallel currency to the Russian ruble in September 1991. From the second half of 1992 onwards, the National Bank prepared to replace the Latvian ruble with the Latvian lats, the currency of the first independence period.284 Aside from the material sym-

276 Ibid., Section III. 277 A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, p. 402. 278 M. Solska, ‘Citizenship, collective identity and the international impact on integration policy in Estonia, Lat- via and Lithuania’, Europe-Asia Studies 63 (3), 2011, p. 1089. 279 Ibid., p. 1090. 280 G. Smith, Nation-building in the post-Soviet borderlands: The politics of national identities, Cambridge: Cambridge University Press 1998, p.100. 281 Ibid., pp.93-103. 282 A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, p.425 283 A. Plakans, The Latvians: A short history, Stanford: Hoover Press 1995, pp. 172-173. 284 Ibid., p. 191 82 CULTURE

bols, all immaterial symbols of the Latvian nation were restored after 1991: the Latvian language was re-introduced by law as the only official language of the state and the national anthem and popular songs were restored.285 Latvian symbolism, material as well as immaterial, slowly eliminated all Russian traces. Aside from the emphasis on Latvian culture, a similar pattern can be seen in Latvia concerning the emphasis on keeping the Latvian national identity alive. The Latvian language is considered as the most important part of the Latvian national identity. In addition, Latvian identity is formed by folklore, singing and dancing festivals, and valuing nature.286

4.5.2 European identity Secondly, the protection of Latvian culture and Latvian identity can be approached from an international level. After the declaration of independence in 1991, a move away from Russia and towards Europe could be observed. Latvia was clearly aiming for a so-called ‘return to Europe’.287 On the one hand, the return to Europe was disadvantageous for Latvia, because it would place the country at the bottom of European states in terms of its socioeconomic position. This would be a degrading position. On the other hand, the move towards a prosperous Europe would ensure progress. In the end, the latter vision on the move towards Europe dominated.288 In Latvia, this was more and more often called the ‘move towards normality’ and ‘away from a “deformed” state’.289 In these terms, ‘normality’ stood for Western European, while the ‘deformed state’ was a metaphor for the situation in the former Soviet states. Now, after Latvia’s declaration of independence, ‘normal’ development could finally start, it was said by the political elites.290 This image resulted in a temporary idealisation of the West. Latvians of all classes started to believe that Latvia should become ‘European’ as part of its identity.291 This Europeanisation was visible on two levels: among the population and in politics. On the citizen level, the people in Latvia were experiencing ‘hunger’ for Western consumer goods and food products.292 Scandinavian, German and Polish companies responded to this need by establishing stores, restaurants and other firms in Latvia. It was a popular, easy and quick form of westernisation in Latvia.293 On the political level, the return to Europe and idealisation of the West was also visible. Political elites in Latvia pushed for accession to NATO

285 Decision on status of the Latvian language (Supreme Council of Latvian SSR, 06.10.1988.) ; A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, p. 426. 286 Interview R18. 287 M. Solska, ‘Citizenship, collective identity and the international impact on integration policy in Estonia, Lat- via and Lithuania’, Europe-Asia Studies 63 (3), 2011, p. 1089. 288 Ibid., p. 1089. 289 A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, pp. 402- 403 290 Ibid., p. 402 291 Ibid., pp. 403. 292 Ibid., pp. 402-404. 293 Ibid., pp. 402-404. LATVIA AND THE EUROPEAN UNION 83 and the EU. Membership of these international organisations made the concept of a ‘return to Europe’ the main political goal of Latvia. The ‘return to Europe’ concept would offer protection against Russia and could guarantee a long-lasting independency. Only in this way would the Latvian nation be able to develop a European identity.294 Today, this tendency towards a European identity is still visible in Latvia. This European focus exists among the citizens as well as in political and diplomatic life. Among citizens however, there is a clear division between ethnic Latvians and Latvian minorities. Ethnic Lat- vians tend to feel more European than Russian-speaking Latvians.295 In Latvian politics, pro- European as well as nationalist parties exist, a phenomenon that is visible in all EU countries.296 Overall, the Latvian state presents itself as a European country.297

4.5.3 Baltic identity Latvian culture and identity can also be approached from a regional perspective. Latvia is one of the three Baltic states, together with Estonia and Lithuania. During foreign occupations, but also during the first and second periods of independence, Latvia was and is known as part of the Baltic region. The independence declaration of 1991 did not change this view of a Baltic identity.298 However, during the building of a Latvian identity in the first years after 1991, there was a bothersome element in this externally existing ‘Baltic identity’. The West tended to see the three states as one region or as a ‘region-in-the-making’.299 Western countries referred to the states as ‘the Baltics’ and approached the states as a region instead of approaching them individually. The idea of the Baltic states as a region was mainly fed by European media images of the fight for independence. Particularly the ‘Baltic Way’ of 1991, a line of one million people with linked hands that stretched from Tallinn to Vilnius, contributed to the image of a single Baltic region.300 This externally existing image of a Baltic identity was contrary to the wish for a Latvian identity, because some political elites thought that a regional identity could be an obstacle to the building of a national identity.301 Each Baltic state, including Latvia, desired to establish national uniqueness in a cultural, political and economic way; each country was willing to ‘return to Europe’ in its own way, instead of as a region.302 Therefore, it can be concluded that

294 M. Solska, ‘Citizenship, collective identity and the international impact on integration policy in Estonia, Lat- via and Lithuania’, Europe-Asia Studies 63 (3), 2011, p. 1089-1108. 295 Interview D02. 296 Interview R30. 297 Interview R06. 298 C. Yndigegn, in Mai-Brith Schartau, Political culture: values and identities in the Baltic Sea Region, Berlin: BWV Verlag 2007, pp.59-60. 299 A. Plakans, A Concise History of The Baltic States, Cambridge: Cambridge University Press 2011, p.404. 300 Ibid., p.404. 301 M. Solska, ‘Citizenship, collective identity and the international impact on integration policy in Estonia, Lat- via and Lithuania’, Europe-Asia Studies 63 (3), 2011, p. 1089-1090. 302 Ibid., p. 1089-1090. 84 CULTURE

a ‘Baltic identity’ was mainly an externally created identity until the first years of Latvia’s independence. The Latvians themselves concentrated mostly on creating a national and Euro- pean identity. Presently, after Latvia’s accession to Western organisations such as the EU and NATO, it is still highly doubtful whether a Baltic identity and Baltic culture exist in the eyes of Latvi- ans. In 2003, Carsten Yndigegn investigated the prevalence of a common Baltic identity among the Baltic youth.303 Yndigegn concluded that ‘the notion of a common Baltic identity has low priority and it does not seem likely to become widespread any time soon’.304 The Bal- tic identity seems of little importance to the young people in the Baltic states.305 Contrary to this conclusion, the Baltic identity does seem to exist in the political field of Latvia. Several ministries tend to work closely together with the other Baltic states. In this sense, ‘Baltic’ can be defined and understood on several levels. A first level of cooperation is among the three Baltic states, which is institutionalised in the Baltic Assembly. This form of cooperation is considered as historically and traditionally important.306 The next level is the Baltic-Nordic cooperation, which includes the Scandinavian countries as well. The third level is that of the Baltic Sea Region, formally in existence since 2008. The Baltic Sea Region consists of the Baltic-Nordic countries together with Germany, Poland and Russia.307 In Latvian business life, the Baltic identity is mostly used as a brand, because it is considered a name that is more known than Latvia.308 In conclusion, a tendency towards the profiling of a Baltic identity can be discovered to a greater extent in the political and business field, and to a lesser extent among Latvian citizens.

4.6 Russian-speaking minority

The Russian-speaking minority and the related language policy issues in Latvia are sensitive issues. In this section, the views of parts of the Russian-speaking community will be discussed. The biggest problem, according to some members the Russian-speaking minority in Lat- via, is the refusal of the Latvian state to think of Latvia as a multi-ethnic and therefore multicultural state.309 After Latvia’s independence in 1991, the Latvians tried to build an ethnic Latvian state and started to see communism as something bad. Therefore, some of the Rus- sian-speaking minority started to feel like they were being perceived as strangers and ene-

303 C. Yndigegn, in: Mai-Brith Schartau, Political culture: values and identities in the Baltic Sea Region, Berlin: BWV Verlag 2007. 304 Ibid., p. 57. 305 Ibid., p.78. 306 Interview R70. 307 Ibid. 308 Interview D02. 309 Ibid.; interview R09; interview R17. LATVIA AND THE EUROPEAN UNION 85 mies.310 After Latvia regained independence, the Russian-speaking minority became foreigners in Latvia, with a passport of the Soviet Union, a country that did not exist anymore. Latvia’s culture also does not reflect anything Russian, even though it has been part of the Soviet Union for a long time. The anthem, flag and coat of arms of Latvia speak more for ethnic Latvians than the other citizens of Latvia, because it is very nationalistic.311 Some of the Russian-speaking minority feel like the Latvian culture should be more mingled to reflect the fact that the country has been occupied by different countries for centuries. This resulted in a multicultural state, which cannot be ignored by the Latvian government, according to a part of the Russian-speaking minority.312 Some see no future for Latvia when it stays as ‘eth- nocratic’ as it is, because this way the government allegedly shows it does not believe in multi-ethnic countries.313 Another opinion that came to light is that the Latvian culture, which is based on folklore, is old-fashioned.314 The Latvians miss the urban culture that many cities in Europe and Russia do have. Some think that the Latvians are stuck in history by singing about it; that they still reflect German traditions with folklore costumes and singing that even Germans have forgotten about.315 Therefore, the Russian-speaking minority does not necessarily want to relate themselves to the Latvian identity. This, however, does not necessarily make them feel connected to Russia instead. Some Russian-speakers within Latvia gave themselves the ‘Riga identity’, described as ‘Western- ised Russians’.316 Regional identity is more important than national, Latvian, identity.317 Membership of the EU brought an extra identity: the European one. Although at first Russian- speakers within Latvia were pessimistic about a European identity, now they feel at ease with this European identity. The EU is a multi-ethnic Union in which it does not matter which cultural background people have.318 Some in the Russian-speaking minority see the emphasis on the Latvian language as an exaggerated measure by the Latvian state.319 In some occupations it is not necessary to speak Latvian fluently and therefore should not be obliged by the state. For instance cleaners or personal trainers can easily survive with just a small knowledge of the Latvian language.320 Be- sides, from an economical point of view it would be better to be multilingual and thus speak Latvian as well as Russian. From a cultural point of view, it is good to have knowledge of the Latvian language as it represents the Latvian culture, but this does not mean other languages

310 Interview R09. 311 Interview D02. 312 Interview R09; interview R17; interview D02. 313 Interview R09. 314 Ibid. 315 Ibid. 316 Ibid. 317 Ibid.; interview D02. 318 Interview R09. 319 Interview R17. 320 Interview R42. 86 CULTURE

have to be excluded.321 There is a role in this case for the Latvian government to instigate contact between Russian-speaking Latvians and ethnic Latvians at the state level. If there is a good leading example of the two populations working together on state level, this will have a great influence on the whole population, according to some interviewees. 322 The differences between the two populations should not lead to conflicts within higher levels of society, as it is not a problem on citizen level. The state and the media should not make the situation worse, but help it to become better.323 Latvia’s national identity might develop into something new: a new identity in which both the Latvian and Russian culture and language will be reflected and exist together. Be- cause Latvia is a relatively young state, it is difficult to understand or accept multiculturalism; old nations are more flexible to accept global changes.324 The issues that the ethnic Latvians have with the Russian-speaking minority are most difficult for the older generation, as they have lived during Soviet times and perceived it as occupation.325 It will likely help that new generations are growing up without the baggage of the communist era. According to one observer, the new way of thinking might help to develop a European identity, in which it is no longer important from what nation people originally are .326 Within this European identity one can be either Latvian, Russian or multi-ethnic.

4.7 National cultural policy

4.7.1 Cultural policy Latvian cultural policy is executed and coordinated by the Ministry of Culture.327 The following fields are under the jurisdiction of the ministry: copyrights and neighbouring rights, libraries, museums, music, fine art, amateur and folk art, theatre, literature, film art, cultural education, protection of monuments, archives and architecture.328 The central apparatus of the Min- istry of Culture consists of two departments: the Cultural Policy Department and the Europe- an Union Funds Department.329

Cooperation with advisory bodies The Ministry of Culture works closely together with advisory bodies and councils that involve culture operators, culture experts and representatives of culture-related NGOs. These external

321 Interview R09, interview D02. 322 Interview R42, interview D02. 323 Interview D02; interview R09; interview R17. 324 Interview D02. 325 Ibid. 326 Ibid. 327 Interview R70. 328 Ministry of Culture of the Republic of Latvia, retrieved from: http://www.km.gov.lv/en/, consulted on 4 June 2012 329 Interview R70. LATVIA AND THE EUROPEAN UNION 87 advisors actively participate in the policymaking process.330 This cooperation exists for two main reasons. Firstly, the human resources available in the ministry are limited. Involvement of civil society and NGOs gives more information and views on the cultural issues and is value-adding in the policy making process.331 Secondly, civil society and NGOs are seen as a ‘friendly way’ to unite society. For the ministry, they are important partners to culturally engage society and to make people active participators and creators in cultural life.332 The most important advisory body to the Latvian Ministry of Culture was established in 1995 in the form of the National Board of Culture. The main tasks of the National Board are to promote public participation in cultural life and to enhance cooperation between the state, public institutions and individuals.333 Several other advisory councils preside over a specific field of the Ministry of Culture, such as literature, music, theatre, film, visual arts, museums, cultural heritage and property rights.334

State Cultural Capital Foundation A special body was created in 1998 with the establishment of the State Culture Capital Foun- dation (SCCF). The SCCF was designed to function as an ‘arm’s length body’, a semi-public administrative body. 335 The aim of the SCCF is ‘to provide financial support for all sectors of culture and art and for the preservation of cultural heritage’.336 It also aims to promote Latvian art and culture worldwide and to facilitate the development of international relations in the cultural sector.337 The government finances the body and appoints its members.338 The establishment of the Foundation completely changed the funding patterns in the cultural sector of Latvia at the time. Before, a body that was totally financed by the government could only have civil servants working for it. The SCCF’s staff consist of civil servants as well as experts from outside, while the body is still totally financed by the government.339

Public expenditures Since the economic crisis hit Europe, funding of the cultural sector in Latvia has decreased significantly.340 This had great impact on the budget of the SCCF as well, which is fully financed by the Latvian Ministry of Culture. In 2009, there was a dramatic drop in the SCCF

330 Ibid. 331 Ibid. 332 Ibid. 333 Minerva EC, State Agency Culture Information Systems, ‘Latvia’, p. 87, retrieved from: http://www.minervaeurope.org/publications/globalreport/globalrepdf06/Latvia.pdf, consulted on 11 March 2012. 334 Minerva EC, State Agency Culture Information Systems, ‘Latvia’, p. 87. 335 Ministry of Culture of the Republic of Latvia, retrieved from: http://www.km.gov.lv/en/, consulted on 11 March 2012. 336 Ibid. 337 Ibid. 338 Law on State Cultural Capital, Article 2, section 2. 339 Interview R18. 340 Interview R70. 88 CULTURE

budget from 7.6 million lats in 2008 to 4.1 million lats in 2009. An even larger decrease followed in 2010 when the budget of the Ministry of Culture was reduced by 43 % compared to 2008.341 In 2010, the SCCF budget was reduced to 2.3 million lats, which is 72 % less than in 2008. The majority of cultural operators were concerned by this harsh reduction of the SCCF budget.342 In 2011 however, the budget of the Ministry of Culture increased due to the additional funding for the construction of the National Library. When these costs are not taken into account, the budget for 2011 would be equal to the level of 2010.343 Nonetheless, the budget of the SCCF in 2011 even increased slightly from 2.3 million lats in 2010 to 2.4 million lats in 2011.344

4.7.2 Cultural policy documents There are two main documents covering Latvian cultural policy. The first is the ‘National Programme Culture’, the second is the ‘Cultural Policy Guidelines (Postulates)’.

National Programme Culture In 2000, the National Programme Culture was developed; the most important cultural policy document.345 The creation of this document was the result of a cooperation between the Min- istry of Culture and independent experts from the advisory councils.346 It aims to represent the continuation and execution mechanism of the principal provisions of Latvian state culture policy, which were approved by the parliament in 1995.347 The goal of the programme is ‘to appoint aims and priorities of the cultural policy for subsequent periods, to elaborate a detailed plan of arrangement for achieving these aims and assuring the priorities, and to implement this plan’.348 The National Programme Culture consists of long-term target-programmes for periods of five to ten years. Each programme must include defined perspective targets and sub-targets of cultural development, and specified ways of achieving this target, particular arrangements and their financing.349 The long-term target-programmes consist of ten sub-programmes.350 The first long-term target-programme was established in 1996 under the name ‘Cultural Policy Postulates of Latvia (1996 – 2005)’. Currently, the second long-term programme is in effect,

341 Interview R18. 342 Ibid. 343 Council of Europe/ERICarts, ‘Compendium of Cultural Policies and Trends in Europe’, 13th edition 2012, p. 43, retrieved from: http:// www.culturalpolicies.net, consulted on: 11 March 2012. 344 Interview R42. 345 Ibid. 346 Ministry of Culture of the Republic of Latvia, retrieved from: http://www.km.gov.lv/en/, consulted on 11 March 2012. 347 Ministry of Culture of the Republic of Latvia, retrieved from: http://www.km.gov.lv/en/documents/documents.html, consulted on 11 March 2012. 348 Ibid. 349 Ibid. 350 Ibid. LATVIA AND THE EUROPEAN UNION 89 called the New Cultural Policy Guidelines (2006 – 2015).351

4.7.3 Cultural Policy Guidelines In 1996, the Ministry of Culture published the Cultural Policy Postulates of Latvia for the first time. This document outlined the most important tasks of state cultural policy for the decade from 1996 to 2005.352 In 2005, the New Cultural Policy Guidelines for the period of 2006 – 2015 followed.353 The main difference between the previous and the current policy guidelines is the change of the paradigm: to analyse cultural policy with a ‘horizontal view’. This means that culture must not be analysed as a separate sector, as was done before, but must be considered in relation to other sectors in society.354 Furthermore, while drafting the new guidelines, three additional factors were taken into account: the increasing globalisation, the increasing impact of new information technologies, and the accession to the EU.355 The 2006-2015 guidelines set out seven strategic directions for the cultural development in the future.356 The most important ones include:

1. to strengthen the national identity and unity of Latvian civil society by supporting and creating national cultural values. 2. to create a favourable environment for the diversity of creative process and to support the aspiration for excellence.

At the moment, the Ministry of Cultural is working on the Cultural policy Guidelines for the period 2015 – 2020. The title and theme of these new guidelines will be ‘Creative Latvia’.357

4.8 Conclusion

Despite of the occupations of foreign powers throughout the centuries, a characteristic Latvi- an culture has developed. Today’s Latvian culture contains traces from former rulers; the most reflected influence comes from the German culture, which has actually integrated in the Latvian culture. The influence of the Russian culture is also present, but exists separetly from the Latvian one. From the side of the ethnic Latvian population, the Latvian language is considered as the

351 Interview R70. 352 I. Ziedonis and J. Treile, Ministry of Culture of the Republic of Latvia, Main cultural policy postulates of Latvia, Madison: University of Wisconsin 1996. 353 Council of Europe/ERICarts, ‘Compendium of Cultural Policies and Trends in Europe’, 13th edition 2012, retrieved from: http://www.culturalpolicies.net, consulted on 11 March 2012. 354 Interview R70. 355 Ibid. 356 Council of Europe/ERICarts, ‘Compendium of Cultural Policies and Trends in Europe’, 13th edition 2012, retrieved from: http://www.culturalpolicies.net, consulted on 11 March 2012. 357 Interview R70. 90 CULTURE

most important component of Latvian culture. Also Latvian dance, music and folkore are important, because these have survived the years of foreign occupations and are therefore perceived as uniquely Latvian. In contrast to that, religion does not form an important component of Latvian culture, because there is no state religion and the religious composition is highly diversified. Architecture and art flows in Latvia have been represented as in other European countries, while Latvian literature does not play as important a role as in it does in other Eu- ropean countries. However, these cultural components are mainly a reflection of the ethnically Latvian part of the population. The presence of a large Russian-speaking minority in the country makes culture a controversial topic in Latvian society. Proof of this controversy is the referendum of February 2012 about making the Russian language the second official state language. En- hanced emphasis on the multi-cultural character of the Latvian society is required. The signing of the European Charter for Regional or Minority Languages would be a signal of approach towards the Russian-speaking minority. While the multicultural situation in Latvia causes frictions nowadays, there is also perspective on relaxation in the near future. Perhaps the best indication for more relaxation is the fact that the next generations of Latvia grew and grow up in independent Latvia. The next generations are all Latvian-speaking, so the problem that some Russian-speakers do not speak Latvian will resolve itself. We conclude that Latvia lacks a full acceptation of the multicultural situation in the country. Too much emphasis on assimilation of the Russian-speaking community seems to polarise the society and does not have the desirable effect. Nevertheless, optimistic prospects for the furure can be recognised; probably the younger generation will reduce the gap between different cultural identities within the Republic of Latvia. LATVIA AND THE EUROPEAN UNION 91

5. Law

5.1 Introduction

After Latvia’s independence in 1991, many laws that dated from the time of the first independence (1918-1940) were reinstated, including the constitution of 1922. After independence and towards EU membership, the main focus in the judiciary was on understanding the reasoning behind legislation, something which was not usual in Soviet times. This aspect was and still is a problem for a considerable part of the judges. Furthermore, access to justice is quite good in Latvia and therefore people tend to appeal everything up to the highest level, resulting in massive backlogs at certain courts. Another issue concerns the funding of the courts, which is dependent on the Ministry of Justice; this might clash with the separation of powers principle. Low public trust regarding the government, parliament and the legal system, results from a lack of confidence of Latvian people that they can affect the processes ‘up there’. The lack of popular trust might also be due to the presence of corruption, which has been and continues to be a problematic matter in Latvia. Some experts claim that corruption has increased due to the financial crisis; others claim the opposite and perceive a gradually decreasing level of corruption. To date, various forms seem to be present to a greater or lesser extent, such as ‘petty corruption’, judicial corruption, high level corruption (i.e. embezzle- ment of money) and state capture. To address corruption, Latvia has extensive anti-corruption legislation, a remarkably effective anti-corruption organisation (KNAB), and a capable civil society, which plays a pivotal role in combating corruption. Parallel to increased respect for rule of law, Latvia’s independence also resulted in a larger focus on human rights in general. During the process towards independence and once independence was officially established, the country acceded to numerous international instruments related to human rights, such as the European Convention on Human Rights in 1997. Also, a human rights catalogue was added to the Latvian constitution. However, little consideration was given to legal and practical aspects of the implementation of these instruments, as could be witnessed in the field of criminal procedural law and the poor conditions of Latvian prisons. As far as minority rights are concerned, national minorities are recognised and protected by Latvian legislation. Yet, Latvian national minorities enjoy a lower status of protection compared to national minorities living in other countries of the EU. In this respect, the language constraints as well the issue of non-citizenship among the Russian-speaking minority (11% of the Latvian population) are particularly problematic. Nonetheless, non-citizens can undergo a naturalisation process to obtain Latvian citizenship. Sexual minorities (LGBTs) also enjoy a lower status of protection in Latvia compared to certain other EU countries, as same-sex couples cannot marry nor register for a legal partnership. Furthermore, hate-crimes 92 LAW

against LGBT people are merely considered an act of hooliganism and their freedom of assembly has been endangered by the Riga City Council several times. Also, Latvian women seem to face various problematic issues to date, such as gender stereotyping, prostitution, human trafficking and inequality as regards salaries. This all signals that discrimination is present in Latvia, and the fact that some fields are still not legally covered, as well as a low level of public awareness of discrimination among the Latvian population, could be seen as worrying.

5.2 Applicable law and government

Latvian legislation has the following hierarchy of sources of law:1 1. The constitution (satversme) of the Republic of Latvia; 2. Laws adopted by the parliament (Saeima), international legal norms and laws on the approval of international agreements; 3. Cabinet regulations effective as acts; 4. Cabinet regulations and international legal norms approved by the cabinet; 5. Compulsory local authority regulations.

5.2.1 The Latvian constitution The Latvian constitution (satversme) was adopted by the constitutional assembly (the first elected legislative body) of the Republic of Latvia on 15 February 1922.2 The first parliamentary elections were held on 7 and 8 October 1922, and on 7 November 1922 the first parliament elected under the new constitution started its work, continuing the legislative work of the constitutional assembly.3 After the Soviet occupation, the Supreme Council, which func- tioned as an interim parliament,4 adopted the Declaration on the Renewal of the Independence of the Republic of Latvia on 4 May 1990, reinforcing the constitution.5 The constitution consists of eight chapters and 116 articles, arranged as follows:6

• Chapter I (articles 1-4): General provisions;

1 European Commission, ‘Applicable law – Latvia’, retrieved from: http://ec.europa.eu/civiljustice/applicable_law/applicable_law_lat_en.htm, consulted on 1 April 2012. 2 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans, eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, p. V-4. 3 Ibid., p. V-4. 4 Latvijas Republikas Saeima, ‘History of legislature’, retrieved from: http://www.saeima.lv/en/about- saeima/history-of-the-legislature, consulted on 31 March 2012. 5 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans, eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, p. V-5. 6 Constitutional Assembly of Latvia, ‘The Constitution of the Republic of Latvia’, retrieved from: http://www.saeima.lv/en/legislation/constitution/, consulted on 31 March 2012. LATVIA AND THE EUROPEAN UNION 93

• Chapter II (articles 5-34): The Saeima; • Chapter III (articles 35-54): The president; • Chapter IV (articles 55-63): The cabinet; • Chapter V (articles 64-81): Legislation; • Chapter VI (articles 82-86): Courts; • Chapter VII (articles 87-88): The state audit office; • Chapter VIII (articles 89-116): Fundamental human rights.

The constitution opens with the phrase: ‘The people of Latvia, in freely elected Constitutional Assembly, have adopted the following State Constitution’.7 Furthermore, the general provisions include the declaration that Latvia is an independent democratic republic (article 1) and that the sovereign power of the state of Latvia is vested in the people of Latvia (article 2). The following section will give a short overview of chapters II – VI.

5.2.2 The Saeima The Saeima is the parliament of Latvia. As laid down in articles 5-10 of the constitution, it is elected by the citizens of Latvia of 18 years and older by secret ballot and based on propor- tional representation. The parliament is elected for a term of four years and is composed of 100 representatives. Following article 16 of the constitution, the parliament elects a presidium that shall be composed of a chairperson, two deputies and secretaries. Following articles 19 and 20, the presidium shall convene sessions of the parliament and schedule regular and extraordinary sittings, and it shall convene these sittings if requested by the president, the prime minister or more than one third of the members of the parliament. The parliament is represented by the chairperson. The chairperson assumes the duties of the state president if he is abroad, removed from office or otherwise unable to fulfil his duties (article 52). The parliament establishes committees which have the power to require individual ministers or local government authorities to give information and explanations (article 25). The parliament can also appoint parliamentary investigation committees (article 26). Members of the parliament are guaranteed parliamentary immunity by articles 28-31 of the constitution. Consent of the parliament is needed for arrest, search of premises or restriction of personal liberties of one of its members (article 29). Members of the parliament may be arrested if they are suspected of committing a crime (article 29). Consent of the parliament is needed for criminal prosecution and the levy of administrative fines of its members (article 30). In certain cases, a member of the parliament may refuse to give evidence (article 31).

7 Ibid. 94 LAW

Figure 5.1: Overview of the structure of the Saeima.8

The powers of the parliament are:9 (articles refer to the constitution) - constitutional: amending of the constitution (article 76); - legislative: process of legislation (article 64 and 68); - administrative-economic: determination of the state revenues and expenditures budget (article 66); - control: question the prime minister or an individual minister (article 27). The parliament can also express a vote of no confidence in the prime minister, resulting in the entire cabinet to resign, or a vote of no confidence in a particular minister, who is then forced to resign (article 59); - elective: elect or remove the state president (article 35 and 50), approve or remove judges (article 85 and article 84), elect Auditors General (article 88); - defence: determination of the size of the armed forces during peacetime (article 67); - procedural: review of qualification of its own members (article 18) and consent to criminal prosecution of its members (article 30); - regulatory: establish rules of order for its own internal operations and order (article 21).

5.2.3 The president Following article 35 of the constitution, the parliament will elect a president for a term of four years. There are discussions to change this system and have the president elected directly by the people.10 The role of the president is primarily representative. The president is the head of

8 Latvijas Republikas Saeima, ‘Structure of the Saeima’, retrieved from: http://www.saeima.lv/en/structure-of- the-saeima, consulted on 17 March 2012. 9 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans, eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, pp. V-27 - V- 29. 10 Interview R56. LATVIA AND THE EUROPEAN UNION 95 state and his tasks are laid down in articles 41-54. The president has the following powers:

- To represent the state in international relations, receive diplomatic representatives of other states, and implement the decisions of the parliament concerning the ratification of international agreements (article 41); - To be the Commander-in-Chief of the armed forces of Latvia (article 42), to declare war based on a decision of the parliament (article 43) and to ensure military defence in case another state declares war on Latvia or when an enemy invades Latvia’s borders (article 44); - The right to initiate legislation (article 47); - The right to convene and preside over extraordinary meetings of the cabinet (article 46); - To proclaim laws that have been passed by the parliament (article 69). This means that he confirms the law, or he can decide to use his veto.11 Within 10 days after the proclamation of a law by the parliament, the president may require it to be reconsidered. However, when after this reconsideration the law is not amended by the parliament, the president may not raise objections again (article 71). The president uses his veto on average two to five times a year, and the parliament usually agrees with the president and amends the law;12 - To suspend the proclamation of a law for a period of two months. It can then be put to national referendum if requested by one-tenth of the electorate, unless three-quarters of the parliament votes in favour of the law in second instance (article 72).

The president is not politically responsible for the presidential duties, because all orders are signed jointly by the prime minister or appropriate minister who does carry the responsibility (article 53). However, it has still been argued that despite of this co-signing procedure, the state president actually is politically responsible.13 The president is subject to criminal liability after consent of two-thirds of the parliament (article 54). It has been argued that the president only gains powers in extraordinary situations, and when everything goes normally, he actually has no power.14

5.2.4 The government: the prime minister and the cabinet The state president invites a person (the prime minister) to form a cabinet (article 56). Usually the prime minister will be a person selected from the ruling coalition in parliament.15 The

11 Ibid. 12 Ibid. 13 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans, eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, p. V-35. 14 Interview R56. 15 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans, eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, p. V-37. 96 LAW

prime minister and ministers together form the cabinet (article 55). The prime minister choos- es his ministers, who have to be confirmed by the parliament. The prime minister and the ministers are responsible for the actions of the cabinet, and the ministers are individually responsible for their activities. A minister’s function is to manage the work of a ministry. The cabinet is the highest executive body of the state.16 The composition and activities of the cabinet are regulated by the Cabinet Structure Act. Meetings of the cabinet are closed. The constitution determines that the number of ministers will be provided for by law (article 57). The cabinet currently consists of 13 ministers: De- fence, Foreign Affairs, Economics, Finance, Education and Science, Culture, Welfare, Envi- ronmental Protection and Regional Development, Transport, Justice, Interior, Health, and Agriculture.17 The prime minister can also appoint a deputy prime minister, ministers with special assignments, and state ministers. State ministers manage a sector within the ministry independently, but in consultation with the minister. The powers of the cabinet are:18

- to consider bills prepared by the ministers and other issues raised by members of the cabinet; - to proclaim a state of emergency; - to set up the annual state revenues and expenditures budget and submit it to the parliament; - in a limited number of cases (following Section 14 of the Cabinet Structure Act: when the cabinet is specifically assigned to do so by statute or when the issue is not regulated by statute), to issue ‘regulatory enactments’ (regulations).

There has been criticism on this last procedure concerning the separation of powers, because ‘where matters are not regulated by the statute, the cabinet may be entering into fields of legislative competence when it passes regulations’.19 The state chancellery is directly subordinated to the prime minister.20 The state chancellery has the task to ensure and control compliance of policy documents and draft legal acts of the cabinet with the effective requirements, develop and implement policy action plans in various areas and present opinion on policy documents and legal acts, and technically arrange activities of the cabinet of ministers.21

16 Ibid., p. V-37. 17 The Cabinet of Ministers of the Republic of Latvia, ‘Composition of the Cabinet of Ministers of Valdis Dom- brovkis’, retrieved from: http://www.mk.gov.lv/en/mk/sastavs/, consulted on 17 March 2012. 18 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans, eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, p. V-38. 19 Ibid., p. V-39. 20 The Cabinet of Ministers of the Republic of Latvia , ‘State Chancellery’, retrieved from: http://www.mk.gov.lv/en/vk/, consulted on 10 April 2012. 21 Ibid. LATVIA AND THE EUROPEAN UNION 97

Figure 5.2: Overview of the procedure for adopting laws.22

5.2.5 Legislative procedure Following from article 64 of the constitution, the parliament and the people, have the right to legislate in accordance with the procedures and to the extent provided for by the constitution. The people legislate by referendum and legislative initiative (see below). The legislative process is laid down in the Rules of Procedure of the Parliament.23 The right of initiative to submit draft laws lies with the president, the cabinet, parliamentary committees (a group of five or more members of the parliament), and one tenth of the electorate (article 65 Constitution and article 79.1 Rules of Procedure). The president can also submit legislative initiatives that do not have the form of draft laws (article 79.2 Rules of Procedure). The legislative procedure is clearly described by Daiga Iljanova in her overview of Latvi- an constitutional law.24 The standard process of legislation consists of three readings. Howev- er, when at least a two-thirds majority of the parliament decides the law is urgent, the bill can

22 Latvijas Republikas Saeima,‘Procedure for adopting laws’, retrieved from: http://www.saeima.lv/en/legislation/procedure-for-adopting-laws, consulted on 10 April 2012. 23 Latvijas Republikas Saeima, ‘Rules of Procedure of the Saeima’, retrieved from: http://www.saeima.lv/en/legislation/rules-of-procedure, consulted on 17 March 2012. 24 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans,eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, pp. V-30 - V- 31. 98 LAW

be adopted in two readings. Two readings are also required for the adoption of a budget bill, amendments to the state budget and bills for the ratification of international agreements. Amending the constitution requires three readings. In the first reading, it must be expressed why the law is necessary. In the second reading, the different sections of the law are drafted. In the third reading, the bill is finalised. When the bill passes the vote in the third reading, the presidium forwards the law to the state president who publishes it in the official newspaper (Latvijas V&stnesis), which means the legal act or official announcement is official.25

5.2.6 Referendum The Latvian citizens have the right to legislate through a referendum. All citizens of Latvia who have the right to vote in parliamentary elections also have the right to vote in a national referendum (article 80 Constitution). Some issues will not be submitted to a referendum (article 73), namely the budget and laws concerning loans, taxes, customs duties, railroad tariffs, military conscription, declaration and commencement of war, peace treaties, declaration of a state of emergency and its termination, mobilisation and demobilisation, and agreements with other nations. Following the constitution, a national referendum is compulsory when:

- the state president proposes to dissolve the parliament (article 48); - substantial changes in the terms regarding the membership of Latvia to the EU are due, if requested by at least half of the parliament (article 68); - the state president has suspended the proclamation of a law for a period of two months (article 72); - amendment of articles 1, 2, 3, 4, 6 or 77 of the constitution are being proposed (article 77); - at least one tenth of the electorate requests a draft amendment of the constitution which is not adopted by the parliament (article 78).

Regulations for national referendums are further specified in the Law on National Referen- dums and Legislative Initiatives of 1994.26 This determines that national referendums must be prepared and organised by the Central Election Commission (article 3). (For further information on elections in Latvia, see section 5.2.8, page 99, and section 5.2.9, page 100.) In practice, referendums happen, but referendums rarely result in a decision to change the law.27

25 LatvijasV&stnesis ‘Official publisher “LatvijasV&stnesis”’, retrieved from: http://lv.lv/?menu=en, consulted on 31 March 2012. 26 Law on National Referendums and Legislative Initiatives, 31 March 1994, as last amended on 26 February 2009, retrieved from: http://web.cvk.lv/pub/public/28862.html, consulted on 9 April 2012. 27 Interview R56. LATVIA AND THE EUROPEAN UNION 99

5.2.7 Legislative initiative The people also have the right to legislate by legislative initiative. This means that at least 10 000 Latvian citizens who are eligible to vote can submit a draft law or draft amendment to the constitution to the Central Election Commission (article 22 Law on National Referendums and Legislative Initiatives). After verification of the signatures, a collection of signatures for support will be carried out in the same way as described before (article 23-24). If at least one tenth of the voters signed the proposed draft law or draft amendment of the constitution, the president will submit it to the parliament, which must consider it (article 25).

5.2.8 Saeima elections Other than the constitution, the Saeima election law, adopted on 25 May 1995, further regulates elections of the parliament.28 There are five constituencies (electoral districts) for the parliament: Riga, Vidzeme, Latgale, Kurzeme and Zemgale (article 7). The number of members of parliament elected from each constituency is proportionate to the number of voters from that constituency.29 This is known as the Saint-Laguë method.30 A candidate can only run for one constituency (article 10.3). Elections normally take place on the first Saturday of October, unless the parliament is dissolved early, then the Central Election Commission decides when elections will take place (article 17). All citizens of Latvia of 18 years or older are eligible to vote, except for persons who have been adjudged incompetent by a court (article 2). Originally, people suspected or accused of a crime were deprived of their voting right. However, a petition against this was submitted to the constitutional court in 2002. The accused person argued this was incompatible with the constitution. The court ruled the norm invalid not based on ECHR law, which the court considered not to say anything about restricting voting rights, but based on a lack of justification of a legitimate aim.31 Article 5 of the Saeima election law lists people who are excluded from being elected to the parliament. These include, among others, people who have belonged to the salaried staff of the USSR, the Latvian SSR state security, intelligence or counterintelligence services (article 5.5). Furthermore, people excluded from being elected to parliament include people who after 13 January 1991 have been active in the CPSU (the Communist Party of the Soviet Un- ion) and the Working People’s International Front of the Latvian SSR, among others (article 5.6).

28 Saeima Election Law, 25 May 1995,as last amended on 31 March 2010, retrieved from: http://web.cvk.lv/pub/public/28126.html, consulted on 21 February 2012. 29 Central Election Commission, ‘Q&A’, retrieved from: http://web.cvk.lv/pub/public/28764.html, consulted on 6 June 2012. 30 European Parliament, Office for Promotion of Parliamentary Democracy, ‘Electoral Systems: The Link Be- tween Governance, Elected Members and Voters’, October 2011, p. 22, retrieved from: http://www.europarl.europa.eu/pdf/oppd/Page_8/Electoral-systems-LR-for-WEB.pdf, consulted on 6 June 2012. 31 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans,eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, p. V-22. 100 LAW

On 30 August 2000, the constitutional court passed a judgment on former communists to stand for the parliament, arguing that ‘the state should be protected from persons who have worked in the apparatus implementing occupation and repression and persons who, after the restoration of independence in the Republic of Latvia, attempted to restore the anti- democratic totalitarian regime and resisted the legitimate state power’.32 However, the constitutional court judged that the political situation in the state had to be periodically evaluated, as well as that such restrictions should only last for a settled period of time.33 Elections are prepared and conducted by the Central Election Commission (Cen- tr#l#v&l&%anukomisija),34 which was established in 1992.35 The Central Election Commission consists of nine members who are eligible to vote, including one chairperson and seven members elected by the parliament and one member elected by the supreme court among its judges (article 2).36 The Central Election Commission is established by the parliament within six months after its first convening, and has a term of four years (article 2).37 Its obligations and rights are further specified in the Law on the Central Election Commission, and include tasks such as properly applying the election and referendum laws (article 4), distributing financial resources among other election commissions (article 6.1), providing samples of election documents (article 6.3), determining procedures (article 6.4 and 6.5), checking election results (article 6.7.1), and informing voters about the election procedures (article 6.7.2). Local government election commissions are elected after the local government elections every four years by the 118 municipalities.38 These local government election commissions help prepare and carry out elections and referendums.39 Reports from the OSCE show that elections in Latvia take place democratically. Latvia respects the rule of law and fundamental freedoms, and a choice exists between substantially different political parties.40

5.2.9 Local elections As determined by the Regional Development law, at the regional level there are five so-called

32 Ibid., p. V-23. 33 Ibid., p. V-23. 34 Central Election Commission, ‘About CEC: Central Election Commission of Latvia’, retrieved from: http://web.cvk.lv/pub/public/28018.html, consulted on 9 April 2012. 35 Ibid. 36 Law on the Central Election Commission, 13 January 1994, as last amended on 6 May 2010, retrieved from: http://web.cvk.lv/pub/public/28127.html, consulted on 9 April 2012. 37 Ibid.; Central Election Commission, ‘About CEC: Central Election Commission of Latvia’, retrieved from: http://web.cvk.lv/pub/public/28018.html, consulted on 9 April 2012. 38 Central Election Commission, ‘Election Commissions in Latvia’, retrieved from: http://web.cvk.lv/pub/public/28337.html, consulted on 9 April 2012. 39 Ibid. 40 OSCE, Office for Democratic Institutions and Human Rights, ‘The Republic of Latvia: Early Parliamentary Elections 17 September 2011’, 19 December 2011, p. 1, retrieved from: http://www.osce.org/odihr/elections/Latvia/86363, consulted on 15 May 2012. LATVIA AND THE EUROPEAN UNION 101 planning regions: Latgale, Kurzeme, Riga, Vidzeme and Zemgale (Section 5.3).41 The competences of planning regions include planning and coordinating regional development, and cooperating between local government and other state administrative institutions (Section 16). They represent the regional interests on the national level, each representing the municipalities in their region.42 At the local administrative level, as of 2009, there are 118 municipalities in Latvia.43 Among these, there are 109 amalgamated municipalities and 9 republican cities.44 This was reformed by amending the Law on Local Government. However, less than one third of the population has experienced any changes after this major reform.45 The reforms were mainly aimed at reducing the numbers of districts. Local government councilors are elected locally by the people.46 Local government shows higher popular trust than the national government.47 It has been argued that one of the main reasons for this is better communication on the local government level. Also, local governments are less associated with corruption because less money is involved.48 All municipalities are members of the Latvian Association of Local and Regional Governments (LALRG), which represents the municipalities in negotiations with the cabinet.49 Local authorities have the following competences:50

- organisation of public utilities (public lightening, heating, water supply51); - maintenance of administrative territory of local authority; - provision of pre-school and secondary education; - organisation of cultural activities, such as libraries and public internet access; - social assistance; - help in housing affairs.

41 Regional Development Law, 21 March 2002, as last amended on 26 April 2007, retrieved from: https://wcd.coe.int/ViewDoc.jsp?id=1470433&Site=COE, consulted on 1 April 2012. 42 Interview D09. 43 Latvian association of Local and Regional Governments, ‘Latvian association of Local and Regional Govern- ments – about us’, retrieved from: http://www.lps.lv/LARLG/, consulted on 1 April 2012. 44 Ministry of Regional Development and Local Government of the Republic in Latvia, ‘History and Progress of Territorial Reform in Latvia’, Riga, 2009, retrieved from: http://www.raplm.gov.lv/uploads/filedir/History%20and%20progress%20of%20territorial%20reform%20in%20 Latvia_web.pdf, consulted on 1 April 2012. 45 J. Dreifelds, ‘Latvia’, Nations in Transit 2011, Freedom House report, p. 3, retrieved from: http://www.freedomhouse.org/sites/default/files/inline_images/NIT-2011-Latvia.pdf, consulted on 10 April 2012. 46 Interview R09; interview J01. 47 European Commission, ´Eurobarometer 72: Public Opinion in the European Union’, National report, Execu- tive Summary, Latvia’, Autumn 2009, p. 6, retrieved from: http://ec.europa.eu/public_opinion/archives/eb/eb72/eb72_lv_en_exec.pdf, consulted on 3 June 2012. 48 Interview D09. 49 Latvian association of Local and Regional Governments, ‘Latvian association of Local and Regional Govern- ments – about us’, retrieved from: http://www.lps.lv/LARLG/, consulted on 1 April 2012. 50 J. Frécon and P. Leuba (Rapporteurs), Council of Europe, ´Local and Regional Democracy in Latvia´, CG(21)16, 30 September 2011, explanatory memorandum, 3.3, para 45, retrieved from: https://wcd.coe.int/ViewDoc.jsp?id=1844425&Site=COE, consulted on 17 March 2012. 51 Interview D09. 102 LAW

The Congress of Local and Regional Authorities of the Council of Europe has reported on Latvia’s legislation on local government in 2011, after a monitoring visit in November 2010.52 The rapporteurs of the Council of Europe noted that the local government legislation is a good basis for local self-government and that the constitutional court has contributed through its case-law to a stronger position of local authorities.53 However, the rapporteurs also expressed several concerns. These include limited financial resources, partly because of the economic crisis, but also because of a lack of own resources and not having the authority to borrow funds independently.54 Latvia is the only EU Member State that has such a restriction to borrowing funds.55 Moreover, problems include the fact that representative bodies of the regional authorities are not directly elected, including restrictions of participation in elections of non-citizens.56

5.3 Judiciary

After Latvian independence in 1991, the judicial system was partly re-established from the first period of independence, combined with some reforms in the early 1990s.57 Apart from the constitution, the law ‘On Judicial Power’ of 1992 determines the competences of the courts.58 This law was the legal basis for judicial reform after independence.59

5.3.1 District courts and regional courts Article 82 of the constitution lays down that court cases must be heard by district (city)

52 J. Frécon and P. Leuba (Rapporteurs), Council of Europe, ´Local and Regional Democracy in Latvia´, CG(21)16, 30 September 2011, retrieved from: https://wcd.coe.int/ViewDoc.jsp?id=1844425&Site=COE, consulted on 17 March 2012. 53 Council of Europe, The Congress of Local and Regional Authorities, ‘Local and regional democracy in Lat- via’, Recommendation 317 (2011), 30 September 2011, para 3, retrieved from: https://wcd.coe.int/ViewDoc.jsp?Ref=REC317(2011)&Language=lanEnglish&Ver=original&Site=Congress&B ackColorInternet=e0cee1&BackColorIntranet=e0cee1&BackColorLogged=FFC679, consulted on 1 April 2012. 54 Council of Europe, The Congress of Local and Regional Authorities, ‘Local and regional democracy in Lat- via’, Recommendation 317 (2011), 30 September 2011, para 4 a-c, retrieved from: https://wcd.coe.int/ViewDoc.jsp?Ref=REC317(2011)&Language=lanEnglish&Ver=original&Site=Congress&B ackColorInternet=e0cee1&BackColorIntranet=e0cee1&BackColorLogged=FFC679, consulted on 1 April 2012. 55 E. Vanags and I. Vilka, ‘Decentralization’, in: Commission of Strategic Analysis, How Democratic is Latvia: Monitoring of Democracy 2005-2007, Riga: Zin%tne 2007, p. 94. 56 Council of Europe, The Congress of Local and Regional Authorities, ‘Local and regional democracy in Lat- via’, Recommandation 317 (2011), 30 September 2011, para 4 d-f, retrieved from: https://wcd.coe.int/ViewDoc.jsp?Ref=REC317(2011)&Language=lanEnglish&Ver=original&Site=Congress&B ackColorInternet=e0cee1&BackColorIntranet=e0cee1&BackColorLogged=FFC679, consulted on 1 April 2012. 57 Supreme Court, ‘About the Supreme Court – The History – Restoration of Democracy’, retrieved from: http://www.at.gov.lv/en/about/history/democracy/, consulted on 10 June 2012. 58 Law ‘On Judicial Power’, 15 December 1992, as last amended on 11 November 1999, retrieved from: http://unpan1.un.org/intradoc/groups/public/documents/UNTC/UNPAN018383.pdf, consulted on 24 February 2012. 59 Supreme Court, ‘About the Supreme Court – The History – Restoration of Democracy’, retrieved from: http://www.at.gov.lv/en/about/history/democracy/, consulted on 10 June 2012. LATVIA AND THE EUROPEAN UNION 103 courts, regional courts and the Supreme Court, and in the event of war or a state of emergency also by military courts. There are 34 district courts; these are courts of first instance for civil, criminal and administrative cases. The cases are heard by one judge acting alone, with the exception of complex administrative cases, which are heard by three judges.60 There are six regional courts; these are courts of first instance for civil and criminal cases falling under their jurisdiction. They also serve as courts of appeal in civil, criminal and administrative cases following up from a case already heard by one judge in a district court. The cases in regional courts are heard by three judges or one judge and two assessors.

5.3.2 Supreme Court In 1990, the Supreme Court was re-established based on the first independence period.61 It consists of the Senate and two panels: the Civil Matters Panel and the Criminal Matters Panel (Section 43 of the law ‘On Judicial Power’). The Senate is a court of cassation in all cases heard in first instance by regional or district courts (Section 47.1), and established in 1992.62 Furthermore, the Supreme Court is a court of first instance in cases under the decisions of the State Audit Office (Section 47.2). The Senate is made up of one Supreme Court chair and senators (Senate judges), and it consists of three departments: Civil Cases, Criminal Cases and Administrative Cases (Section 47.3 & 47.4). The Supreme Court’s decisions are final and an appeal is not possible.63 In order to achieve the European standards of court practice, the Supreme Court engages in the Network of the Supreme Judicial Courts of the European Union and the Association of the State Councils and Supreme Administrative Courts of the Member States of the European Union, alongside professional development of its judged.64

5.3.3 Constitutional Court Following article 83 of the constitution, the Constitutional Court plays a major role in inter- preting the constitution, reviewing cases of compliance of law with the constitution. The Con- stitutional Court was set up by the passing of the Constitutional Court Law on 28 June 1996.65 However, it was not until the amendment of 30 November 2000 that courts of general jurisdiction and persons whose fundamental rights were violated by the constitution were allowed

60 European Commission, ‘Organisation of justice – Latvia’, retrieved from: http://ec.europa.eu/civiljustice/org_justice/org_justice_lat_en.htm, consulted on 8 February 2012. 61 Supreme Court, ‘About the Supreme Court – The History – Restoration of Democracy’, retrieved from: http://www.at.gov.lv/en/about/history/democracy/, consulted on 10 June 2012. 62 Ibid. 63 Supreme Court, ‘The Scope of Authority’, retrieved from: http://www.at.gov.lv/en/about/operation/goals/, consulted on 17 March 2012. 64 Supreme Court, ‘About the Supreme Court – The History – Restoration of Democracy’, retrieved from: http://www.at.gov.lv/en/about/history/democracy/, consulted on 10 June 2012. 65 Constitutional Court Law, 28 June 1996, as amended latest on 19 May 2011, retrieved from: http://www.satv.tiesa.gov.lv/?lang=2&mid=9, consulted on 24 February 2012. 104 LAW

to submit an application to the Constitutional Court (Section 17 of the Constitutional Court Law). The other courts of Latvia can also refer cases to the Constitutional Court.66 The Con- stitutional Court consists of seven judges, to be confirmed by the parliament. Judgments of the court are final and not subject to appeal (Section 32 of the Constitutional Court Law). During the first years of its existence, this court did not have many applications, and the judges were still following trainings and cooperating with Constitutional Courts of Germany and Lithuania to help developing the doctrines of the first rulings.67 Especially when the economic crisis started, the court became overburdened with work, mainly by cases related to reduction of pensions, family benefits and salary cuts.68 Increasingly complicated cases are also arising in general, even though the competence of the court has not changed substantially since its establishment.69

5.3.4 Administrative courts Administrative courts were put into place by the Administrative Procedure Act of 1 February 2004. Their structure was copied from Germany.70 It has also been argued that administrative courts were already in place in the first period of independence of Latvia, and they returned in a slightly different way.71 The main purpose of administrative courts is to monitor the justice of administrative acts and to hear legal disputes arising from these acts. They handle all different kinds of administrative matters, and also financial cases and tax cases, because there are no specialised financial courts.72 Administrative cases are heard in first instance by district administrative courts (Section 122). A judgment may be appealed by an applicant at a regional administrative court (Section 290). An applicant can ask for a cassation procedure at the Department of Administrative Cases of the Supreme Court Senate.73 One of the reasons behind the establishment of the courts in 2004 was that the transition of law after independence was difficult for the judges, because there were many new principles. With the new courts, new judges and education programmes were introduced, which improved the rulings in administrative cases.74 Furthermore, with the administrative courts, judges became more specialised.75

66 Interview R72. 67 Ibid. 68 Ibid. 69 Ibid. 70 Interview R56. 71 Interview R66. 72 Ibid. 73 European Commission, ‘Organisation of justice – Latvia’, retrieved from: http://ec.europa.eu/civiljustice/org_justice/org_justice_lat_en.htm, consulted on 31 March 2012. 74 Interview R66. 75 Interview R56. LATVIA AND THE EUROPEAN UNION 105

Figure 5.3: Overview of the Latvian court system. 76

It is argued that despite their short existence, administrative courts ‘have become im-

76 Supreme Court, ‘The Supreme Court and the Latvian Court System’, http://www.at.gov.lv/en/about/operation/system/, consulted on 12 April 2012. 106 LAW

portant tools in strengthening the legal system of Latvia’.77 They have asked the Constitution- al Court to review the constitutionality of different legal norms on several occasions.78 Fur- thermore, it has become easier for people to defend their rights in these courts instead of applying to the Constitutional Court directly.79 In general, the administrative courts are perceived as well-functioning courts. This has mainly been ascribed to the relatively young judges working there.80

5.3.5 Restrictions on becoming a judge Section 51 of the Law ‘On Judicial Power’ determines that discrimination on the basis of origin, social and financial status, race or nationality, sex, religion, type and nature of occupation or political or other views is prohibited in selecting judges. However, only Latvian citizens can become a judge, which is not considered to be discrimination. Persons who may not become a judge are laid down in Section 55 of Law ‘On Judicial Power’. These include, amongst others, persons who have been convicted of previously committing a crime, persons against whom a criminal matter has been initiated and against whom an investigation is being conducted, persons who have been employed in staff positions of the State Security Commit- tee of the USSR or the Latvian SSR, the Ministry of Defence of the USSR, or the state security service, army intelligence service, or counter-intelligence service of Russia, and by decisions of the Supreme Council or a court.

5.3.6 Legal aid The State-Ensured Legal Aid Law of 2005 ensures state-guaranteed financial support for the receipt of legal aid in order to promote a fair court protection (section 1).81 This is available for Latvian citizens, non-citizens, stateless persons, EU citizens legally residing in Latvia, third country nationals with a permanent residence permit, other persons with a right to legal aid under one of the international conventions signed by Latvia, asylum seekers, and permanent residents of another EU member state in cross-boundary disputes (section 3.1 State En- sured Legal Aid Law). In addition, this person has to have a status of low-income, and has to be in a situation which prevents them from protecting their own rights (section 3.2). The Le- gal Aid Administration is the body responsible for the provision of legal aid (section 7). The state provides expenses for up to 3 hours of consultation, presentation of up to 3 procedural

77 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans,eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, p. V-55. 78 Ibid., p. V-55. 79 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans,eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, p. V-55. 80 Interview R4; interview R24; interview R66. 81 State Ensured Legal Aid Law, 17 March 2005, as last amended on 21 October 2010, retrieved from: http://www.vvc.gov.lv/advantagecms/LV/meklet/meklet_dokumentus.html?query=legal%20aid&resultsPerPage =10, consulted on 10 April 2012. LATVIA AND THE EUROPEAN UNION 107 documents, and representation in court for up to 40 hours.82 However, less than 20 % of liti- gants act with a lawyer in civil cases.83 It has been argued that in civil cases, the Legal Aid Administration is less willing to help.84 On the other hand, in criminal cases the amount of expenses covered by the state does not cover the full expenditures for a court case.85 Overall, it has been argued that the Legal Aid Administration is not working very efficiently.86

5.4 EU law in Latvia

In the years before Latvia’s accession to the EU in 2004, implementation of EU law had already been taking place. Even in the years before accession talks, Latvia was already working to implement EU rules. For that reason, it has been argued that this has been a gradual change towards full application of EU law.87 As has already been mentioned, after Latvian independence in 1991, the constitution of 1922 was reinstated. In addition, all legislation from before 1939 was reinstated, which resulted in methodological challenges in meeting the dynamic EU style of legislation.88

5.4.1 Application of EU law in Latvia With regard to international law, Latvia has a monistic system.89 International law and international agreements need to be transformed into national law with consent of the parliament before entry into force at the national level.90 This is laid down in article 68 of the constitution, which states: ‘The ratification of the Saeima shall be indispensable to all international agreements dealing with issues to be settled by legislation’. Article 41 of the constitution de- fines that the president shall carry out decisions of the parliament concerning the ratification of international treaties. Until 2001, a hierarchical order of laws, according to which international agreements formally ranked below adopted national laws, was favoured.91 However, now section 15(3) of the Act on Administrative Procedures lies down that when international legislation, regardless of its source, encompasses rules that are different from Latvian legislation, international legislation or agreements have priority.92 Concerning EU law, section 15(4)

82 European Commission, ‘Legal Aid – Latvia’, retrieved from: http://ec.europa.eu/civiljustice/legal_aid/legal_aid_lat_en.htm, consulted on 10 April 2012. 83 J. Dreifelds, ‘Latvia’, Nations in Transit 2011, Freedom House report, p. 11, retrieved from: http://www.freedomhouse.org/sites/default/files/inline_images/NIT-2011-Latvia.pdf, consulted on 10 April 2012. 84 Interview R54. 85Arturs Kucs, ‘The Rule of Law and Access to Justice’, in: Commission of Strategic Analysis, ‘How Democrat- ic is Latvia: Monitoring of Democracy 2005-2007’, p. 24. 86 Interview R54. 87 Interview R04. 88 Interview R11. 89 D. Luters-Thümmel, ‘Latvia’, in: A. Ott and K. Inglis eds., Handbook on European Enlargement: A Commen- tary on the Enlargement Process, The Hague: TMC Asser Press 2002, p. 267. 90 Ibid., p. 267. 91 Ibid., p. 268. 92 Administrative Procedure Law, 25 October 2001,as last amended on 19 January 2004, retrieved from: 108 LAW

of the Act on Administrative Procedures specifies that ‘the legal norms of the European Un- ion (Community) shall be applied in accordance with their place in the hierarchy of legal force of external regulatory enactments. In applying the legal norms of the European Union (Community), institutions and courts shall take into account European Court of Justice case law’. Furthermore, article 5 of the Civil Procedure Law specifies that courts shall adjudge civil matters in accordance with EU law, and Latvian law shall only be applied insofar as it allows the legal norms of the European Union, because they are directly applicable in Latvia (articles 5.1 and 5.3).93 The decision to join the EU was made by national referendum, as provided for by the constitution (article 68). Article 68 also provides for a referendum when substantial changes regarding the membership of Latvia in the EU are intended, if requested by at least half of the members of the parliament. However, a referendum was not called regarding the Lisbon Trea- ty: it was argued that the Constitutional Treaty had already been finalised when Latvia acceded to the EU and thus Latvia had implicitly already approved this treaty.94 Others have suggested that a referendum was not necessary because the Lisbon Treaty did not bring about many changes, and it was just a consolidation of existing powers.95 The Ministry of Justice is in charge of coordination of transposition of EU law in Latvian law. The Ministry of Justice allocates the adopted EU directive to the competent ministry to transpose it into national law.96 Sometimes there are two or more ministries transposing different elements of the same directive.97 The Ministry of Justice gives its opinion on the national draft law that transposes and EU directive, but the responsibility lies with the competent ministry.98 As in normal legislative procedure, the president has to promulgate the transposed national law.99 The 2011 annual governance check-up by the European Commission shows that Latvia is in third place in implementing internal market law with a transposition deficit of only 0.4 % (where the EU allows a transposition deficit of 1 %).100 However, it should be noted that transposition in a fast pace can result in poor quality domestic legislation, partial transposition and scarce language.101 It has been suggested that one of the main problems with transposition

http://unpan1.un.org/intradoc/groups/public/documents/untc/unpan018406.pdf, consulted on 8 February 2012. 93 Civil Procedure Law, 14 October 1998, as last amended on 14 December 2006, retrieved from: http://www.wipo.int/wipolex/en/text.jsp?file_id=191081, consulted on 18 March 2012. 94 G. Zukova, ‘The Application of EU Law in Latvia’, in: A. Lazowski ed., The Application of EU Law in the New Member States: Brave New World, The Hague: TMC Asser Press 2010, p. 249. 95 Interview R11. 96 Interview R38. 97 Ibid. 98 Ibid. 99 Interview R56. 100 European Commission, ‘Making the Single Market Deliver: Annual Governance Check-up 2011’, Luxem- bourg: Publications Office of the European Union 2012, p. 10, retrieved from: http://ec.europa.eu/internal_market/score/docs/relateddocs/single_market_governance_report_2011_en.pdf, consulted on 9April 2012. 101 G. Zukova, ‘The Application of EU Law in Latvia’, in: A. Lazowski ed., The Application of EU Law in the New Member States: Brave New World, The Hague: TMC Asser Press 2010, p. 245. LATVIA AND THE EUROPEAN UNION 109 of EU law is of linguistic kind.102 There are certain EU concepts that were not known in Lat- vian, such as ‘product’, to mean both goods and services, whereas the Latvian word means just goods. This creates a technical problem with the transposition of EU law.103 In general, it can be stated that basic principles on the application of EU law, like direct effect and supremacy, are known and accepted.104 However, there are still some problems with the practical implementation by the Latvian judiciary.105 Judges are not always willing to implement EU law, as can be shown by a ruling of the Riga district court in 2007. In a case in this district, where a claimant based his claim on a directive which was not transposed into Latvian law by the prescribed deadline, a judge ruled that the there is no reason the apply the directive because it is not in force in Latvia legislation, and because directives do not have direct effect.106 Another striking example of the supreme court’s lack of knowledge of EU law is a case in 2005, in which it confused the European Union and the Council of Europe.107 These two cases show that applying EU law has had a difficult start. It has been suggested that the willingness in application and knowledge of EU law by the courts is much higher in the higher courts (supreme court and constitutional court) than in the lower courts (district and regional courts).108 One of the main problems in general with the judges is their inheritance of the Soviet law system.109 In Soviet times everything was specified by law, and there was no need to think behind the reasoning of the law, while with the application of modern Latvian law as well as with EU law, it is necessary to understand the reasoning behind the law.110

5.4.2 Application of EU law by the courts Case law has confirmed the supremacy of international law over conflicting national provisions. In one of its rulings, the constitutional court has stated: ‘if there arises a discrepancy between the international legal norms, ratified by the parliament, and the national legal norms of Latvia, the international legal norms shall be applied’ and ‘the person applying legal norms, also the court, when establishing discrepancy between the international legal norm and the national legal norm of Latvia, shall apply the international legal norm’.111 Even before accession to the EU, domestic courts have referred to EU law and ECJ case

102 Interview R11. 103 Ibid. 104 G. Zukova, ‘The Application of EU Law in Latvia’, in: A. Lazowski,ed., The Application of EU Law in the New Member States: Brave New World, The Hague: TMC Asser Press 2010, p. 246. 105 Ibid., p. 246. 106 Ibid., p. 247. 107 Ibid., p. 247. 108 Interview R11; interview R38. 109 Interview R04. 110 Ibid. 111 Case 2004-01-06 of the Constitutional Court of Latvia, decision of 7 July 2004, para 6. Retrieved from: http://www.satv.tiesa.gov.lv/upload/2004-01-06E.rtf,, consulted on 9 April 2012. 110 LAW

law.112 Although they were not used as a basis for judgments, they were considered ‘as a source of historical and systemic interpretation’.113 In the years following the accession to the European Union, cases before Latvian courts with regard to EU law were mainly cases brought to court after accession, but with facts that took place before accession.114 However, cases being brought before the court have gradually been changing to cases about facts that took place after EU accession.115

5.4.3 Limits to the application of EU law Zukova argues that a decision of the constitutional court of 17 January 2008 marks a turning point in the application of EU law in Latvia.116 Here, the constitutional court ruled that ‘Lat- via is under an obligation to interpret domestic laws in a way that does not contradict the obligations taken vis-à-vis the EU, to the extent that these obligations do not encroach upon main principles of the Latvian constitution’.117 In other words, this means that, even though Latvia is bound by EU law and thus obliged to subordinate national law to EU law, there is a limit when these rules infringe upon the Latvian constitution. Others have argued this is not so much a turning point but rather a warning sign, saying that if the time ever comes a directive is implemented that Latvia does not agree with, they can put a halt to it.118 Furthermore, Zukova brings forward an interesting case on the transposition period of directives. A case before the supreme court that she has mentioned regards Russian citizens who are holders of a Latvian residence permit, for which renewal had been rejected. Under Directive 2003/109/EC they would have the right to have their permits renewed, but its transposition period was still pending. The supreme court ruled that during this transition period, domestic courts are entitled to apply the Directive, but that until the deadline for transposition had passed, it was up to the Office of Citizenship and Migration Affairs to decide whether this would be applicable in the case at hand.119

5.4.4 Latvia at the European Court of Justice (ECJ) Since 2004, Latvia is a member of the European Union. As one of the institutions of the EU,

112 G. Zukova, ‘The Application of EU Law in Latvia’, in: A. Lazowski,ed., The Application of EU Law in the New Member States: Brave New World, The Hague: TMC Asser Press 2010, p. 251. 113 Case SKA-216/2004 of the Administrative Cases Department of the Senate of the Supreme Court, para 10. English translation offered by G. Zukova, ‘The Application of EU Law in Latvia’, in: A. Lazowski (ed.), The Application of EU Law in the New Member States: Brave New World, The Hague: TMC Asser Press 2010: 2010, p. 251. 114 G. Zukova, ‘The Application of EU Law in Latvia’, in: A. Lazowski, ed., The Application of EU Law in the New Member States: Brave New World, The Hague: TMC Asser Press 2010, p. 254. 115 Ibid., p. 254. 116 Ibid., p. 260. 117 Ibid., p. 251. 118 Interview R11. 119 G. Zukova, ‘The Application of EU Law in Latvia’, in: A. Lazowski,ed., The Application of EU Law in the New Member States: Brave New World, The Hague: TMC Asser Press 2010, p. 260. LATVIA AND THE EUROPEAN UNION 111 the Court of Justice of the EU makes sure that EU law is applied in the same way in all EU countries.120 The ECJ rules in cases which are brought before it by the highest national courts where EU law is applicable. The ECJ also acts as a mediator in conflicts between EU institutions. Writing in 2010, Zukova noted that thus far Latvia has preferred to intervene in on-going proceedings from other countries at the ECJ, rather than to file a separate action.121 However, growing awareness and knowledge of the European institutions might result in more action at the ECJ in the near future.122 In the Treaty on the functioning of the European Union (TFEU), there are three articles that mention different procedures before the ECJ. Latvian involvement in procedures stem- ming from these articles will be discussed below.

Article 258 TFEU (infringement procedure) At present, Latvia has not been brought before the ECJ under article 258 TFEU, the infringement procedure. In this sense, it can be argued that Latvia is a ‘good’ Member State because it eliminates problems before they have reached the ECJ.123 Several potential infringement procedures await examination.124 In its most recent report on monitoring the application of EU law, the European Commission mentions Latvia as the country with the third least open infringement cases, with 32 pending cases.125

Article 263 TFEU (direct actions against EU institutions) So far, only one case has been brought before the ECJ regarding article 263 TFEU, challenging the European Commission’s decision to reduce Latvia’s gas emission quotas. Latvia brought this case to court in the General Court case T-369/07, arguing this is a significant restriction of sovereign rights and an infringement of non-discrimination in the calculation of gas emission quotas by the Commission. The General Court decided to annul the contested decision of the Commission. However, the Commission brought the case for appeal before the Court of Justice in case C-267/11 P on 30 May 2011, which is currently in progress. Several other countries with a similar vision as Latvia joined the case and Latvia is confident for an outcome in its favour.126 Latvia has also participated in several article 263 TFEU proceedings as a supporter or

120 European Union, ‘The Court of Justice of the European Union’, retrieved from: http://europa.eu/about- eu/institutions-bodies/court-justice/index_en.htm, consulted on 9 April 2012. 121 G. Zukova, ‘The Application of EU Law in Latvia’, in: A. Lazowski,ed., The Application of EU Law in the New Member States: Brave New World, The Hague: TMC Asser Press 2010, p. 264. 122 Ibid., p. 265. 123 Interview R66. 124 European Commission, ‘Statistical Annex: Accompanying the Document: Report from the Commission, 28th Annual Report on Monitoring the Application of EU Law’, Brussels, 29.9.2011, SEC(2011) 1094 final, p. 7. 125 European Commission, ‘28th Annual Report on Monitoring the Application of EU law (2010)’, Brussels, 29.9.2011, COM(2011)588 final, p. 4. 126 Interview R38. 112 LAW

intervener in ECJ cases, supporting other countries. This is especially done in cases concerning other countries from the 2004 EU enlargement round, such as Poland and Cyprus, and in cases dealing with language policy.127

Article 267 TFEU (preliminary ruling) In preliminary rulings, a national court can ask the ECJ for advice on the application of EU law. On 7 April 2004, article 5 bis was added to the Civil Procedure Law, determining the assigning of cases to the ECJ regarding the interpretation or validity of legal norms for a preliminary ruling. From the year of accession until 1 July 2009, Latvian courts were not frequent users of preliminary rulings, while only six references were submitted.128 However, in 2011 12 preliminary rulings were brought before the ECJ.129 It has been argued that the courts are still becoming aware of the possibility of a preliminary ruling, and that they mostly ask the ECJ in order to feel more confident in their decision.130 Most preliminary rulings have been in tax cases, together with some communication and environment cases.131 What is notable about these preliminary rulings is that the large majority of them are asked by administrative courts, a proportion that is more dramatic than in most other countries of the EU.132

5.5 International law in Latvia

Besides EU law, Latvia is a signatory to multiple international conventions in the human rights field, including the General Pact for Civil and Political Rights of the UN; the Interna- tional Covenant on Economic, Social and Cultural Rights of the UN; and the European Con- vention for the Protection of Human Rights and Fundamental Freedoms.133 As in other EU Member States, UN resolutions are addressed through the EU and transposed into regulations that are directly applied in Member States.134 More information on application of the international conventions on human rights in Latvia can be found in the human rights section. Latvia has a judge at the International Criminal Court, but there are no cases at the court.135 With regard to the International Court of Justice, Latvia is not really involved in this institution; there are no cases and no judges from Latvia there, and its jurisdiction hasnot been ratified.136

127 G. Zukova, ‘The Application of EU Law in Latvia’, in: A. Lazowski,ed., The Application of EU Law in the New Member States: Brave New World, The Hague: TMC Asser Press 2010, pp. 268-269. 128 Ibid., p. 270. 129 Interview R38. 130 Ibid. 131 Interview R38. 132 Interview R66. 133 D. I-janova, ‘V. The Republic of Latvia’, in: C. Kortmann, J. Fleuren and W. Voermans,eds., Constitutional Law of 10 EU Member States: The 2004 Enlargement, Deventer: Kluwer Law International 2006, p. V-15. 134 Interview R66. 135 Ibid. 136 Ibid. LATVIA AND THE EUROPEAN UNION 113

5.6 Private law

5.6.1 The Civil Code The Latvian Civil Code was adopted in 1937, shortly before the Soviet occupation, and reinstated in two steps in 1992 and 1993.137 The Civil Code is based on the Local Law Collection of the Baltic Provinces of the Russian Empire (1864), which was mainly drafted by the Ger- man Friedrich Georg von Bunge.138 As a result, the Latvian Civil Code resembles more to the German code than any of the Russian codes.139 The Civil Code contains 2 400 articles and is divided into four parts: Family Law, Inheritance Law, Property Law and Law on Obliga- tions.140 Prior to Latvia’s accession to the European Union, the Civil Code had to be amended in order to comply with the acquis communautaire. An annex of the Civil Code explicates this by citing the directives and provisions, which have been introduced into the Code.141

5.6.2 Lex specialis The Civil Code does not, however, cover all parts of the civil law. Insolvency law, competition law, copyright law, commercial law, and consumer protection are dealt with by separate laws, the so-called ‘lex specialis’.142 Special attention will be given to competition and commercial laws below, as these laws were fundamental for the creation of a market economy in Latvia.

Competition law Shortly after the independence in 1991, a law on competition and restriction of monopoly was adopted. The law applied to all sectors of the economy and to both public and private enterprises, but did not take fully into account the EU Competition policy.143 As far as anti-trust legislation is concerned, a new competition law came into force in 1998 and was considered by the European Commission as closely aligned with that of the EU.144 However, the proper enforcement of the law required more attention. For instance, the

137 K. Torgans, ‘European Initiatives (PECL, DCFR) and Modernisation of Latvian Civil Law’, Juridica Interna- tional (14), 2008, p. 137. 138 Ibid., p. 137. 139 K. Torgans, ‘European Initiatives (PECL, DCFR) and Modernisation of Latvian Civil Law’, Juridica Interna- tional (14), 2008, p. 137. 140 ‘The Civil Law of Latvia’, retrieved from: http://www.ur.gov.lv/eng/regulative-enactments.html, consulted on 7 April 2012. 141 Ibid. 142 K. Torgans, ‘European Initiatives (PECL, DCFR) and Modernisation of Latvian Civil Law’, Juridica Interna- tional (14), 2008, p. 137. 143 European Commission, ‘Opinion on Latvia’s Application for Membership of the European Union’, DOC/97/14, p. 54. 144 European Commission, ‘Regular Report from the Commission on Latvia’s progress towards accession 114 LAW

authorities lacked experience in undertaking on-the-spot investigations.145 Upon accession, Latvia was meeting the majority of the commitments and requirements in the area of anti- trust, but needed to strengthen the administrative structure required to implement the acquis more effectively.146 In the field of state aid, Latvia adopted a law in 1998, which incorporated basic EU policy principles.147 In the last report before accession the Commission considered Latvia to be ready to implement state-aid acquis. However, major efforts were needed to track record of proper application and enforcement of state-aid legislation.148

Commercial law The Commercial law regulates, among other issues, the establishment of companies and their commercial activities. This law entered into force in 2002 and incorporated various laws adopted at the beginning of the 1990s. There are five forms of business entities, which are recognised in Latvia:

• individual merchant: natural person who is liable for his obligations with all of his assets; • general partnership: company in which two or more partners operate under a common business name and are jointly liable for the obligations of the general partnership with all of their assets; • limited partnership: company in which two or more partners operate under a common business name, and at least one of the partners (limited partner) is liable for the obligations of the limited partnership only to the extent of his contribution, but other partners (general partners) are liable for the obligations of the limited partnership with all of their assets; • private limited liability company: a private limited liability company is a company which has share capital divided into shares. The shareholders are not personally liable for the obligations of the limited liability company, whereas a limited liability company is liable for performance of the obligations with all of its assets; • public limited liability company: company which has share capital divided into shares. Shareholders of the company are not personally liable for the obligations of the limited liability company, whereas the limited liability company is liable for the performance of

(1998)’, p. 26. 145 Ibid., p. 26. 146 European Commission, ‘Comprehensive monitoring report on Latvia’s preparations for membership (2003)’, p. 24. 147 European Commission, ‘Regular Report from the Commission on Latvia’s progress towards accession (1998)’, p. 26. 148 European Commission, ‘Comprehensive monitoring report on Latvia’s preparations for membership (2003)’, p. 24. LATVIA AND THE EUROPEAN UNION 115

its obligations with all of its assets.149

The most popular form of business entity is the private limited liability company, or SIA, which is similar to the Dutch B.V.150 It is the least regulated form, and it is the easiest way to set up a business.151 Globally, Latvia ranks 51th of 183 economies on the ease of starting a business.152 As a comparison, Lithuania and Poland take the 101st and 126th position.153 Furthermore, it is easier to start a business in Latvia than in high-income European countries such as the Nether- lands (79) and Germany (98).154

5.6.3 Labour Law The new Labour Law came into force in 2002. The law regulates mutual relations between the employer and employees, obligations, rights and responsibilities. One of the basic provisions of the law is the obligation for the employer and employee to enter a written contract.155 In the absence of a written contract of employment, the employee cannot receive guarantees that he or she is entitled to according to the labour legislation, like remuneration for the time worked, annual leave, unemployed allowances and compensation for loss of work ability.156 According to a survey conducted among 1058 employers, 96.9 % of companies had entered into written contracts with all their employees in 2007.157 However, it is likely that the data are not objective, as it is likely that employers were not disclosing the real situation.158 In any case, the results show that agriculture, hunting and forestry, manufacture of wood, products of wood and cork and manufacture of furniture, construction, and education belong to sectors in which not all employees had a written contract.159 The Labour Protection law, which was adopted in 2001, aims to guarantee and improve occupational safety and occupational health.160 According to the Section 5, Chapter II of the Labour Protection Law the employer has an obligation to organise an occupational health and

149 Danske Bank, ‘Business Guide Latvia’, retrieved from: http://www.danskebank.com/en- uk/ProdServ/corporate/country-business-guides/Documents/Business_Guide_Latvia.pdf, consulted on 5 June 2012, p. 7. 150 Netherlands-Latvian Chamber of Commerce, ‘Doing business in Latvia’, retrieved from: http://www.nlcc.lv/index.php?option=com_content&view=article&id=74&Itemid=55, consulted on 8 April 2012. 151 Ibid. 152 The World Bank, Doing business 2012 Doing business in a more transparent world Economy profile: Latvia, Washington: The World Bank 2012, p. 16. 153 Ibid., p. 16. 154 The World Bank, ‘Doing business Economic ranking’, retrieved from: http://www.doingbusiness.org/rankings, consulted on 10 April 2012. 155 J. Danusevica, Work conditions and risks in Latvia, Riga: Zemgus LB Ltd 2007, p. 56. 156 Ibid., p. 56. 157 Ibid., p. 56. 158 Ibid., p. 57. 159 Ibid., p. 57. 160 Ibid., p. 42. 116 LAW

safety management system.161 The most important part of the system is the occupational risk assessment. This consists of the identification of risk factors by inspecting workplaces and types of work and in the creation of preventive measures.162 In a survey, three quarters of employers indicated that occupational risk assessment had never or only partly been carried out in their company or institution.163 Only 22 % indicated that occupational risk assessment had been carried out completely.164 According to Section 9 of the Labour Protection Law, the employer can perform the duties of occupational and safety specialist himself, if he underwent a training and the company has less than 10 employees.165 For a company with less than 50 employees but more than 10, an occupational and safety specialist has to be designed.166 For companies with more than 50 employees, the employer is obliged to designate more specialists or to create an organisational unit.167 In a survey a total of 63.4 % of the employers indicated that occupational health and safety tasks in their enterprise are carried out by themselves.168 61.6 % of these employers have not undergone occupational health and safety training.169 This indicates that employers often do not have sufficient knowledge about occupational health and safety issues and that occupational health and safety legislation requirements regarding training and education are not being followed.170 Moreover, employers were performing health and safety tasks even if the number of employees was higher than 10, which is not consented by the law.171 In 22.6 % of the cases occupational health and safety measures were carried out by one occupational health and safety specialist, in 1.9 % of the cases by several specialists or by a special unit.172 The State Labour Inspectorate (SLI) is the state institution responsible for the implementation of policy in the field of labour legal relations and occupational safety and health. The legal status, function, tasks and the operational procedure of the SLI are defined in the State Labour Inspectorate Law, adopted on 19 June 2008.173 The main area of activity of the SLI is inspection. According to section 5 of the law, officials of the SLI have the right to carry out examinations in the workplace without prior notification or without receiving permission.174 For this purpose, they are entitled to question employers and employees, request accounting,

161 Ibid., p. 46. 162 Ibid., p. 46. 163 Ibid., p. 46. 164 Ibid., p. 46. 165 Ibid., p. 49. 166 Ibid., p. 49. 167 Ibid., p. 49. 168 Ibid., p. 49. 169 Ibid., p. 50. 170 Ibid., p. 50. 171 Ibid., p. 50. 172 Ibid., p. 49. 173 State Labour Inspectorate, ‘About us’, retrieved from: http://www.vdi.gov.lv/en/About%20us/state-labour- inspectorate/, consulted on 5 June 2012. 174 Ibid. LATVIA AND THE EUROPEAN UNION 117 registration of other documents and verify that these comply with the requirements imposed by legal acts regulating employment legal relationship and labour protection.175 In the case of violations, the SLI can impose administrative fines on employers and in the most serious cases decide to suspend the activities of a company.176 A second significant area of activity is participation in the improvement of legislation. The SLI cooperates with the Ministry of Wel- fare and Ministry of the Interior in the development and improvement of the normative base for legislation in the fields of employment, health and safety in the workplace.177

5.7 Rule of law

The primary requirement of the rule of law is that the state is governed by the law and acts that are set up by a parliament that has been elected by the people.178 Since Latvia’s independence, the rule of law in Latvia has improved considerably. The rule of law in Latvia is generally considered to be good, because there are courts that have the power to prevent the issuing of unlawful legal acts.179 Furthermore, as has been shown before, there are regular parliamentary elections. Public officials are also increasingly subject to the rule of law after investigations by the courts, prosecutors, and the Corruption Prevention and Combating Bu- reau (KNAB), which even lead to actual imprisonments, and increased interest of mass media and NGOs.180 This section will give an overview of improvements that have been made in recent years, as well as highlight problems that continue to exist today.

5.7.1 Separation of powers Although not explicitly stated in the constitution, there is a separation of power between the legislative, executive and judicial power in Latvia: they are each independent and autonomous institutions.181 Following article 64 of the constitution, the parliament has the legislative power. Draft laws may be submitted to the parliament by the president, the cabinet or committees of the parliament (article 65). The executive power is in the hands of the Cabinet of Ministers; the constitution determines that the cabinet shall discuss all draft laws (article 61), and has the right to declare a state of emergency (article 62). As described in section 5.3, the judicial power lies with the district courts, regional courts, the Supreme Court, the constitutional court and administrative courts.

175 Ibid. 176 Ibid. 177 Eironline, ‘State Labour Inspectorate examined’, retrieved from: http://www.eurofound.europa.eu/eiro/2004/04/feature/lv0404101f.htm, consulted on 5 June 2012. 178 A. Kucs, ‘The Rule of Law and Access to Justice’, in: Commission of Strategic Analysis, How Democratic is Latvia: Monitoring of Democracy 2005-2007, Riga: Zin%tne 2007, pp.19-20. 179 Ibid., p. 20. 180 Ibid., p. 21. 181 A. Usacka, ‘Judicial Independence in Latvia’ in: Open Society Institute, Monitoring the EU Accession Pro- cess: Judicial Independence, Budapest: Central European University Press 2001, p. 237. 118 LAW

5.7.2 Judicial independence In 2001, the Open Society wrote an extensive report on judicial independence in Latvia.182 In this report it is noted that, although Latvia has made substantial changes towards an independent judiciary since the early 1990s, the efforts have stagnated in recent years.183 This is argued to be the result of an unfavourable political and social environment.184 An example is politicians who have publicly given their opinion in order to influence on-going court cases, and another example is the low public confidence in the independence of the courts.185 The separation of powers in Latvia is also considered to be insufficient.186 Particularly the Ministry of Justice and the parliament have too broad discretionary powers.187 As noted before, the separation of powers is not laid down in the constitution, and because it is only laid down in law, it is argued that the protection is insufficient.188 In 2007, several problems were noted with regard to the independence of the courts. One of these is the budget planning of the courts. This is done by the courts’ administration, which is part of the Ministry of Justice, and makes the courts dependent on other branches of state power.189In 2012, there is a case pending before the constitutional court on the budget planning of independent institutions, including the courts, the State Audit Office, the Ombudsman and the chancery of the state president.190 Judicial independence is also threatened by corruption cases with regard to judges; for more information on this, please refer to section 5.14. Another concern in the context of judicial independence is the influence of the legislative and executive branches on the procedure of appointing judges.191 Two specific problems are present; on the one hand, the lack of precise criteria for appointing judges for the constitutional court can cause problems of independence when the candidate is appointed by the other two branches; on the other hand, a lack of limitation to a term of district judges is problematic.192 The parliament has the final vote in the appointment of judges and the voting session is closed, which results in a lack of transparency.193 In 2010, the Law ‘On Judicial Power’ was amended so as to provide for a Council of Jus- tice, whose aim is to depoliticise the judiciary.194 Although initially greeted with enthusiasm,

182 Ibid., pp. 225-265. 183 Ibid., p. 231. 184 Ibid., p. 231. 185 Ibid., p. 231. 186 Ibid., p. 232. 187 Ibid., p. 232. 188 Ibid., p. 237. 189 A.Kucs, ‘The Rule of Law and Access to Justice’, in: Commission of Strategic Analysis, How Democratic is Latvia: Monitoring of Democracy 2005-2007, Riga: Zin%tne 2007, p. 22. 190 Interview R72. 191 A.Kucs, ‘The Rule of Law and Access to Justice’, in: Commission of Strategic Analysis, How Democratic is Latvia: Monitoring of Democracy 2005-2007, Riga: Zin%tne 2007, p. 23. 192 Ibid., p. 23. 193 Interview R54. 194 J. Dreifelds, ‘Latvia’, Nations in Transit 2011, Freedom House report, p. 12, retrieved from: LATVIA AND THE EUROPEAN UNION 119 worries have been expressed about its budget. Since a separate budget is not provided for, the Council of Justice is expected to rely on the budget for the supreme court, whose budget is already strained.195 However, there are hopes that this council will be strengthened in the future so they can operate independently, also with regards to, for example, appointing judges.196

5.7.3 Parliamentary immunity An area of concern with regard to the rule of law is parliamentary immunity. Described as the safest place for criminals, it has been argued that parliamentary immunity is often abused because of weak laws.197 This has been linked to parliamentarians not taking responsibility in a case of conflict of interests.198 Public outrage over the matter of parliamentary immunity triggered early elections in 2011. One of the results of these elections was the removal of two ‘oligarch’ parties from the parliament, which shows that the general feeling of the population was strong enough to create change.199

5.7.4 Access to justice The greatest problem detected in 2005 concerning access to justice was the long procedures before court, although it was noted that the situation was slowly improving.200 However, in 2012 the great length of the procedures is still mentioned as a main problem of access to justice.201 One of the suggestions to improve the situation has been to limit the access to the courts in insignificant cases,202 or less possibilities for appeal.203 Furthermore, people often do not have the money to pursue a fair trial, also because state-supported legal aid is lacking.204 However, in 2006 a law was passed to guarantee state legal aid free of charge in civil, administrative and criminal cases.205 Another development with regard to access to justice was the 2003 annulment by the constitutional court of a section of the Civil Proceedings Law that prescribed that only sworn

http://www.freedomhouse.org/sites/default/files/inline_images/NIT-2011-Latvia.pdf, consulted on 10 April 2012. 195 Ibid. 196 Interview R72. 197 K. Zichmanis, ‘Parliamentary Immunity in the Saeima’, retrieved from: http://www.latcan.org/pdf/kz10.pdf, consulted on 10 April 2012. 198 Interview R54. 199 Interview R11. 200 A.Kucs and G.Feldhune, ‘The Rule of Law and Access to Justice’, in: I. Me.araups, ed., Commission of Strategic Analysis, How Democratic is Latvia: Audit of Democracy, Riga: LU Akad&miskaisapg#ds 2005, p. 39. 201 Interview R04; interview R56, 202 Interview R56. 203 Interview R66. 204 A. Kucs and G. Feldhune, ‘The Rule of Law and Access to Justice’, in: I. Me.araups ed., Commission of Strategic Analysis, How Democratic is Latvia: Audit of Democracy, Riga: LU Akad&miskaisapg#ds 2005, p. 39. 205 European Commission, ‘Legal aid – Latvia’, retrieved from: http://ec.europa.eu/civiljustice/legal_aid/legal_aid_lat_en.htm, consulted on 19 March 2012. 120 LAW

attorneys could represent clients in civil proceedings.206 This annulment resulted in the possibility for any lawyer, not just a sworn attorney, to represent a person in a civil procedure before court. Furthermore, a barrier to access to justice for non-Latvian speakers is that courts only accept Latvian applications.207 Another issue detected in 2007 is the accessibility of court verdicts. These are only available through the database Lursoft for a fee.208 However, recent developments include the online availability of all administrative court proceedings, supreme court verdicts of civil and criminal cases, and verdicts and decisions of the constitutional court for free.209 The transparency of law interpretation is considered to have improved significantly after the supreme court established a database of judicature in 2006, with the aim of greater harmonisation of the various courts.210 Furthermore, the supreme court displays several expert studies on court practice.211

5.8 Public opinion

In 2009 polls in Latvia showed a low public confidence level: 6 % of the population tend to trust the parliament, and 9 % to trust the government.212 Local authorities show a significantly higher level of trust with 41 %. Trust in the Latvian legal system and justice is higher than trust in the parliament or government: 26 % of respondents tend to trust the legal system.213 Low trust in the courts is partially caused by attention in the mass media to matters of impartiality or bribery of judges. However, this has also been an incentive for response to these cases, for example when KNAB started a criminal prosecution against two judges.214 Research among actual clients of the court has shown that they have not experienced a lot of corruption, leading to the conclusion that it is mainly the perception of people who have heard or read in the news about corruption, while in actuality this is only a small problem.215 Long procedures are also a drawback for the perception of the courts.216It should also be noted that confidence in the courts is a delicate topic, because in any court case there is always a side

206 A. Kucs and G. Feldhune, ‘The Rule of Law and Access to Justice’, in: I. Me.araups,ed., Commission of Strategic Analysis, How Democratic is Latvia: Audit of Democracy, Riga: LU Akad&miskaisapg#ds 2005, p. 39, referring to the Novermber 6, 2003, judgment of the Constitutional Court in the case No. 2003-10-01. 207 Interview R72. 208 A. Kucs, ‘The Rule of Law and Access to Justice’, in: Commission of Strategic Analysis, How Democratic is Latvia: Monitoring of Democracy 2005-2007, Riga: Zin%tne 2007, p. 20. 209 Ibid., pp. 20-21. 210 Ibid., p. 22. 211 Ibid., p. 22. 212 European Commission, ‘Eurobarometer 72: Public Opinion in the European Union’, National report, Execu- tive Summary, Latvia’, Autumn 2009, p. 6, retrieved from: http://ec.europa.eu/public_opinion/archives/eb/eb72/eb72_lv_en_exec.pdf, consulted on 6 June 2012. 213 Ibid. 214 A.Kucs, ‘The Rule of Law and Access to Justice’, in: Commission of Strategic Analysis, How Democratic is Latvia: Monitoring of Democracy 2005-2007, Riga: Zin%tne 2007, p. 25. 215 Interview R54; interview R72. 216 Interview R72. LATVIA AND THE EUROPEAN UNION 121 that has lost the case, who might always argue that the case has been corrupted.217 General low public confidence in government, parliament and courts has been linked to low confidence in one’s own potential to influence the ‘system’.218 To change this, more civil engagement is necessary: authorities need to show people that they actually can get involved and to give them the feeling that they can affect the process.219 From a government point of view, they can show more willingness by being more truthful to the people and be more self- critical, for example by taking responsibility in a case of conflict of interests regarding politicians and high state officials.220

5.9 Fundamental human rights

5.9.1 Constitution The restoration of the independence of Latvia was guided by the principle of state continuity, according to which the Latvian state continued to exist as a legal entity under international law, despite having been under Soviet rule and German occupation from 1940 to 1991.221 This means that the body of laws, which was interrupted in the 1940s, ‘virtually’ remained in force during the different occupations and was restored after the independence.222 The constitution of 1922 was also restored. This constitution was in many ways already democratic at the time.223 However, it did not contain any human rights catalogue.224 In 1998, the constitution was amended and a chapter on human rights was added (Chapter VIII ‘Fundamental Hu- man Rights’). The peculiarity of this catalogue is that it is written in a very laconic matter.225 This characteristic has both a positive and a negative side. As far as the former is concerned, the conciseness of the provisions makes it possible to interpret the standards of the constitution in line with international human rights standards.226 With regard to the latter, the brevity of the catalogue provisions makes it harder for the judge to apply these norms. This is especially true in the context of Latvia, as there was no tradition of applying human rights provisions during Soviet times.227 As far as the content of the catalogue is concerned, most of the human rights provisions are similar to those laid down in Western constitutions and guaranteed by the European Con-

217 Interview R04. 218 Interview R54. 219 Ibid. 220 Interview R38. 221 I. Ziemele, State Continuity and Nationality: The Baltic States and Russia. Past, Present and Future as De- fined by International Law, Martinus Nijhoff Publishers 2005, p. 118. 222 Interview R24. 223 Interview R24. 224 The Constitutional Court of the Republic of Latvia, ‘The criteria of the limitation of Human Rights in the practice of Constitutional Justice. The National Report of the Constitutional Court of the Republic of Latvia’, retrieved from: http://www.venice.coe.int/CECC/Latvia.pdf, consulted on 15 February 2012, p. 2. 225 Ibid., p. 3; interview R24. 226 Interview R24. 227 Ibid. 122 LAW

vention of the Protection of Human Rights and Fundamental Freedoms.228 In fact, the legisla- tor tried to take into consideration the letter and spirit of the Convention, when elaborating the provisions in Chapter VIII of the Constitution.229 The fundamental rights contained in Chapter VIII can be divided into two main categories: civil and political rights, and economic, social and cultural rights. These rights can be enforced by anyone living legally in Latvia vis-à-vis the state. However, the Constitution contains some rights that are only enforceable by certain groups. For instance, only Latvian citizens enjoy protection from the state when abroad and cannot be extradited to a foreign country (art. 98). Moreover, solely Latvian citizens, as well as EU citizens, are allowed to participate in the work of the state and of local government, to hold a position in the civil service and to vote for the election of local governments (art. 101). Finally, persons belonging to ethnic minorities are entitled to preserve and develop their language and their ethnic and cultural identity (art. 114). The human rights, which are laid down in the constitution, are not absolute but can be subject to restrictions. Art. 116 stipulates: ‘The rights of persons set out in Articles 96, 97, 98, 100, 102, 103, 106, and 108 of the Constitution may be subject to restrictions in circumstances provided for by law in order to protect the rights of other people, the democratic structure of the state, and public safety, welfare and morals. On the basis of the condition set forth in this Article, restrictions may also be imposed on the expressions of religious beliefs.’ The Latvian Constitutional Court has pointed out in different rulings that restrictions do not merely have to be set forth by the law, but they must also be in compliance with the legitimated aim the state wishes to reach when establishing the restriction and with the principle of proportionality.230 Moreover, the Constitutional Court has claimed that rights which are not enumerated in article 116, can be limited as well.231 When reviewing the compliance of a law with article 111 of the constitution (on the protection of human health by the state), the Court observed that the fact that article 116 does not mention the rights guaranteed in Article 111, it did not mean that the fundamental rights were absolute and restrictions might not be imposed on them. The Court saw the constitution as a single whole and believed that the norms enshrined into it had to be interpreted systematically.232

5.9.2 International treaties and conventions On 4 May 1990, the Latvian SSR Supreme Council adopted a declaration on the accession of the Republic of Latvia to international instruments relating to human rights, together with a

228 The Constitutional Court of the Republic of Latvia, ‘The criteria of the limitation of Human Rights in the practice of Constitutional Justice. The National Report of the Constitutional Court of the Republic of Latvia’, retrieved from: http://www.venice.coe.int/CECC/Latvia.pdf, consulted on 15 February 2012, p. 9. 229 Ibid., p. 9. 230 Ibid., p. 10. 231 Ibid., p. 11. 232 Ibid., p. 11. LATVIA AND THE EUROPEAN UNION 123 declaration restoring independence. The declaration contains more than 50 international instruments in the sphere of human rights that the Supreme Council considered as binding.233 This shows a strong willingness from the side of Latvia to adhere to these instruments. How- ever, little consideration was given to legal and practical aspects of their implementation.234 The same can be said about the ratification of the European Convention for the Protection of Human Rights and Fundamental Freedoms of 1997. First of all, the compatibility study was not carried out thoroughly, as no recommendation was made about criminal procedural law, whereas this area was later to be found problematic by the European Court of Human Rights.235 Secondly, the potential impact of the Convention on the Latvian legal system was never discussed in the parliament.236 The fact that the Latvian legal system in some areas was not ready to accommodate the Convention standards was made clear by the judgements of the European Court of Human Rights.237 As of January 2012, the Court has delivered 53 judgements against Latvia.238 In 44 cases the Court found a violation of the Convention.239

5.9.3 Human rights: organs and procedures The following section will focus on the state organs, which are responsible for the application of human rights in Latvia. For each organ, the procedures for individual complaints will be set out. In the case of the Ombudsman, a wider analysis shall be provided.

Administrative courts If the human rights have been infringed by administrative acts or measures, which are in con- tradiction with law under which they have been given or taken, the administrative courts have the power to invalidate the administrative act as contrary to law.240 If the law under which the administrative act was passed or the measure was taken is unconstitutional itself, the administrative courts have the right and the obligation to submit the application to the Constitutional Court.241

233 The complete list of international instrument can be found on http://www.humanrights.lv/doc/latlik/dokdekl.htm, consulted on 15 February 2012. 234 M. Mits, European Convention on Human rights in Latvia: Impact on Legal Doctrine and Application of Legal Norms, Lund: Media Tryck 2010, p. 27. 235 Ibid., p. 90. 236 Ibid., p. 90. 237 Ibid., p. 125. 238 Ministry of Foreign Affairs of the Republic of Latvia, ‘ Cabinet of Ministers reviews Foreign Ministry report on shortcomings of national courts having led to complaints to ECHR’, retrieved from: http://www.mfa.gov.lv/en/news/press-releases/2012/march/28-1/, consulted on 11 June 2012. 239 European Court of Human Rights, ‘Overview 1959-2011’, retrieved from: http://www.echr.coe.int/ECHR/EN/Header/The+Court/Introduction/Information+documents/, consulted on 11 June 2012, p. 6. 240 The Constitutional Court of the Republic of Latvia, ‘The criteria of the limitation of Human Rights in the practice of Constitutional Justice. The National Report of the Constitutional Court of the Republic of Latvia’, retrieved from: http://www.venice.coe.int/CECC/Latvia.pdf, consulted on 15 February 2012, p.33. 241 Ibid., p.34. 124 LAW

Constitutional Court A very important measure for the protection of human rights is the constitutional claim to the Constitutional Court. Article 19 of the Constitutional Court Law recites: ‘[a]ny person who holds that his/her fundamental rights, established by the Constitution, have been violated by applying a legal norm, which is uncomfortable with the legal norm of higher force, may submit a claim’.242 The constitutional claim can be submitted only after exhausting the ordinary legal remedies within six months from the date of the decision of the last institution becoming effective.243 Only if the review of the constitutional claim is of general importance or if general legal means cannot avert material injury to the applicant of the case, the Constitutional Court can decide to review the application before all other legal means have been exhaust- ed.244

5.9.4 Ombudsman Another important instrument in the field of human rights is the Ombudsman (Ties!bsarga birojs). The legal basis for the Latvian Ombudsman was laid down by an act of the parliament on 6 April 2006, which entered into force in January 2007.245 The Ombudsman is independent in its action and is elected for 5 years by the Saeima. The institution is the legal successor to the Latvian Human Rights Office, which was established in 1996. The main difference between the institutions lies in the criteria of control, which for the Ombudsman now include principles of good administration.246 The functions of the Ombudsman are enumerated in section 11 of the Ombudsman law. Briefly, these are:

- promotion of the protection of the rights and lawful interests of a private individual; - promotion of the compliance of equal treatment and prevention of any kind of discrimination; - promotion of the compliance of the principle of good administration in the state administration; - promotion of the rectification of legislative deficiencies regarding human rights issues and the principle of good administration. - promotion of public awareness and understanding of human rights and mechanisms for the protection of such rights.247

242 Ibid., p.35. 243 Ibid., p.36. 244 Ibid., p.36. 245 G. Kucsko-Stadlmayer, European Ombudsman-Institutions A Comparative Legal Analysis Regarding the Multifaceted Realisation of an Idea, Wien: Springer 2008, p. 270. 246 Ibid., p. 270. 247 ‘Ombudsman Law’, retrieved from: http://www.vvc.gov.lv/advantagecms/LV/meklet/meklet_dokumentus.html?query=ombudsman&resultsPerPage =10, consulted on 3 June 2012. LATVIA AND THE EUROPEAN UNION 125

Section 12 of the Ombudsman Law deals with the tasks of the Ombudsman.248 Firstly, the Ombudsman accepts and examines submissions, complaints and proposals of any private. Secondly, the Ombudsman can initiate a verification procedure for the clarification of circumstances. On the basis of the examination of the verification procedure, the Ombudsman can provide institutions with recommendations and an opinion on the lawfulness and effectiveness of their activities. Thirdly, the Ombudsman has the task to facilitate conciliation between the parties to the dispute. Fourthly, the Ombudsman provides persons with consultation regarding human rights issues. Fifthly, the Ombudsman provides state institutions with recommendations on the rectification of legislative deficiencies. In the case state institutions do not amend legislation as requested by the Ombudsman, this body has the right to submit an application before the Constitutional Court. Finally, the Ombudsman conducts research and analyses the situation in the field of human rights.

5.9.5 Evaluation of implementation of human rights legislation As shown above, Latvia committed itself to guaranteeing human rights after the independence by adding a human rights catalogue to the constitution and joining international instruments, among others the Convention on Human Rights. It is said that there are no major legal gaps in the field of human rights in Latvia.249 However, with regard to the application of domestic laws in compliance with international standards, the picture is less positive. This has mainly to do with a lack of skills and knowledge of international law, especially amongst older judges who have been trained in an era in which the understanding of human rights was completely different.250 This point can be further illustrated by a recent debate, which was initiated by Office of Representative of the Government of the Republic of Latvia before International Human Rights Organisations in 2012.251 It was argued that 30 % of the lost cases by Latvia before the Strasbourg court had to do with an incorrect appliance of domestic laws with the European Convention of Human rights.252 The Latvian state also committed itself to the Paris principles by founding the Latvian Human Rights Office in 1996 and a full-fledged Ombudsman in 2007. However, when it comes down to the efficiency of the Ombudsman, different NGOs and human rights experts are critical. Firstly, it is suggested that both the former and the present Ombudsman were not

248 Ibid. 249 Interview R24. 250 Ibid. 251 Ministry of Foreign Affairs of the Republic of Latvia, ‘ Cabinet of Ministers reviews Foreign Ministry report on shortcomings of national courts having led to complaints to ECHR’, retrieved from: http://www.mfa.gov.lv/en/news/press-releases/2012/march/28-1/, consulted on 11 June 2012; interview R24. 252 Ministry of Foreign Affairs of the Republic of Latvia, ‘ Cabinet of Ministers reviews Foreign Ministry report on shortcomings of national courts having led to complaints to ECHR’, retrieved from: http://www.mfa.gov.lv/en/news/press-releases/2012/march/28-1/, consulted on 11 June 2012; interview R24. 126 LAW

the best candidates for the post and political bickering surrounded their nomination.253 Sec- ondly, they have both been criticised for their weak performance. Some observers argue that the first Ombudsman, Rom#ns Aps!tis, also a former member of the parliament and judge of the Constitutional Court, found it very difficult to go against his former colleagues.254 There- fore he tried to remain invisible, especially on sensitive issues.255 Moreover, a huge internal scandal broke out: the differences of opinion between the Ombudsman and the employees were so great that the latter sent a letter to the president and the parliament to ask for the dismissal of the Ombudsman.256 In the end, the Ombudsman was not replaced but many leading employees left the office.257 This scandal led to a blow on the public trust in the institution.258 According to some, the current Ombudsman, Juris Jansons, was not the best candidate for the post either.259 He is a former lawyer without any background knowledge on human rights; whereas his competitor was a judge of an administrative court, former employee of the Om- budsman and expert in human rights.260 Although the current Ombudsman is increasingly more visible in the media and has adopted a mid-term strategy for the first time, NGOs and human rights experts complain about the weak stance of the Ombudsman on divisive issues such as LGBT rights.261 Moreover, due to the economic crisis the budget of the Ombudsman office has been cut down increasingly in the last years: in 2010 it was cut down by 56 % compared to 2008.262 This represents a further constraint for the Ombudsman to fully carry out its tasks.263

5.9.6 Anti-discrimination laws The adoption of anti-discrimination standards and practice in Latvia clearly is an EU-driven development.264 However, equality already was a constitutional principle in Latvia before EU membership. Article 91 of the Latvian constitution outlaws all kinds of discrimination. Yet, since the constitution has no horizontal effect, special laws are needed in order to outlaw discrimination in the private sector. Before the EU accession period several anti-discrimination clauses were included in different laws. They were, however, largely declarative, contained no specific definitions and foresaw no mechanisms for their implementation.265 For instance,

253 Interview R07. 254 Ibid. 255 Ibid. 256 Ibid.; interview R24. 257 Interview R07. 258 Interview R24. 259 Interview R07; interview R24. 260 Interview R24. 261 Interview R07; interview R24; interview R28. 262 Interview R07. 263 Interview R24. 264 I. Brands Kehris, ‘Development of anti-discrimination legislation and practice in Latvia: EU accession and remaining challenges’, retrieved from: http://ec.europa.eu/ewsi/en/resources/detail.cfm?ID_ITEMS=22705, consulted on 4 June 2012, p. 6. 265 Ibid., p. 7. LATVIA AND THE EUROPEAN UNION 127 the Labour Code from before 2002 included prohibition of discrimination and two cases of gender discrimination were confirmed by court decisions in 2000 and 2002.266 Although the non-hiring of a woman as a prison guard was found discriminatory in the latter case, the court considered the apologies made by the Central Prison services during the hearings a sufficient compensation.267

EU Employment Equality directive and Race directive An official working group on transposition of the EU Employment Equality Directive and of the Race Directive was established in Latvia in 2002. This group proposed a comprehensive anti-discrimination law, which aimed to outlaw discrimination across grounds in various fields.268 The draft law was adopted by the Saeima on 7 April 2004, but was later dropped because of criticism from the Human Rights and Public Affairs Committee and the Parlia- mentary legal bureau about the fact that the law went beyond the minimum requirements of the Directives.269 Instead, the minimum transposition approach was chosen and a package of separate amendments to eight separate laws was prepared.270 Some of these amendments were adopted between 2005 and 2008, others still have to be implemented.271 The main problem with Latvian anti-discrimination legislation is the patchy nature of the regulation, from which most other problems arise.272 It can be observed that whereas most, if not all, required fields are covered in Latvia, within these fields not all the required grounds are present.273 For instance in the area of self-employment, discrimination is prohibited solely on the grounds of race, ethnicity and gender.274 The exclusion of other grounds such as disability, age and sexual orientation is in breach with the EU’s Employment Directive.

Gender equality directives Gender inequality was considered an issue for the first time in 1999, in the Social Report of the Ministry of Welfare.275 In order to comply with the acquis communautaire in the field of gender equality, the Law on Labour Protection was adopted in 2002. This Law transposed the directive on equal pay (75/117/EEC), equal treatment in job accessibility, professional training, career and conditions of work (76/207/EEC), childcare leave for both parents (96/34/EC),

266 Ibid., p. 7. 267 Ibid., p. 7. 268 Ibid., p. 9. 269 Ibid., p. 9. 270 Ibid., p. 9. 271 Ibid., p. 10. 272 G. Feldhüne, ‘Report on measures to combat discrimination. Directives 2000/43/EC and 200/78/EC. Country Report 2010 Latvia’, retrieved from: http://www.non-discrimination.net/countries/latvia, consulted on 3 June 2012, p. 5. 273 Ibid., p. 5. 274 Ibid., p. 5. 275A. Putnina, ‘Report Analysing Intersectionality in Gender Equality Policies for Latvia and the EU’, retrieved from: www.quing.eu/files/results/ir_latvia.pdf, consulted on 3 June 2012, p. 14. 128 LAW

duty for providing proof in cases of discrimination on sex grounds (97/80/EC) and protection of pregnant women at work (92/85/EEC).276 However, implementation of EU gender equality instruments occurred less smoothly after accession. In 2009, an infringement procedure was launched by the European Commission for the non-correct transposition of Directive 2002/73/EC, amending Council Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions.277 According to the Commission, Latvia had failed to properly transpose the definition of indirect discrimination and to provide a sufficient level of protection against discrimination in the areas of self-employment, vocational training and benefits provided for by organisations of workers or employers.278 The procedure was closed at the end of 2010, as Latvia had modified its gender equality and anti-discrimination law to take account of the Commission's concerns.279

State institutions dealing with discrimination The Ombudsman is the equality body, as envisaged by the EU anti-discrimination laws.280 So far, European anti-discrimination law only requires that equality bodies be set up in the fields of race, ethnic origin and gender.281 In Latvia, however, the Ombudsman deals with all grounds of discrimination.282 The main function of an equality body is to provide assistance to victims of discrimination, to conduct independent surveys concerning discrimination, to publish independent reports and to make recommendations on any issue relating to discrimination. The Latvian Ombudsman has the competence to carry out all these obligations as laid down in the law on the Ombudsman.283 Another institution dealing with discrimination is the State Labour Inspectorate (SLI). This institution is responsible for monitoring the compliance with employment legislation and observing the rights of employees.284 The Inspectorate can impose a fine up to 500 lats for

276 Ibid., p. 14. 277 European Commission, ‘Commission acts against Latvia on gender equality legislation’, retrieved from: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/1033&type=HTML&aged=0&language=EN&gu iLanguage=en, consulted on 4 April 2012. 278 Ibid. 279 European Commission, ‘Gender Equality: Commission welcomes compliance with EU sex discrimination rules in Germany, Latvia, Lithuania and Slovenia; closes infringement cases’, retrieved from: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1554&format=HTML&aged=0&language=EN& guiLanguage=en, consulted on 4 April 2012. 280 Equinet, ‘Equality bodies’, retrieved from: http://www.equineteurope.org/361.html, consulted on 3 June 2012. 281 Equinet, ‘What is an equality body’, retrieved from: http://www.equineteurope.org/564239.html, consulted on 3 June. 282 Equinet, ‘Equality bodies’, retrieved from: http://www.equineteurope.org/361.html#anchor%20latvia, consulted on 2012. 283 Valsts Valdas Centrs, ‘Ombudsman law’, retrieved from: http://www.vvc.gov.lv/advantagecms/LV/meklet/meklet_dokumentus.html?query=ombudsman&resultsPerPage =10, consulted on 3 June 2012. 284 I. Brands Kehris, ‘Development of anti-discrimination legislation and practice in Latvia: EU accession and remaining challenges’, retrieved from: http://ec.europa.eu/ewsi/en/resources/detail.cfm?ID_ITEMS=22705, consulted on 4 June 2012, p. 17. LATVIA AND THE EUROPEAN UNION 129 discrimination violations.285

Evaluation of Latvian anti-discrimination laws As was shown above, the adoption of anti-discrimination standards and practice were clearly driven by Latvia’s EU-membership. The EU Anti-discrimination directives have been transposed for the most part, though there are some minor legal gaps left. Besides, low public awareness and very little knowledge of specific questions concerning discrimination remain a pivotal issue in Latvia.286 This becomes clear when looking at survey data. Although survey data point in the direction that the experience of discrimination is very common in Latvia, the number of complaints to all institutions remains very low.287 For instance, the State Labour Inspectorate declares to receive very few cases on the field of discrimination.288 The ones they do receive, are mostly about age discrimination in job advertisements.289 Moreover, discrimination complaints represent no more than six to seven per cent of the overall complaints received by the Ombudsman,290 the most of which regard age, gender and race discrimination.291 The Ombudsman could, as an equality body, play a pivotal role in raising public awareness in the non-discrimination field. However, the question remains whether the Om- budsman can fulfil the requirements of anti-discrimination directives on its own, as only two employees (out of 35) deal with discrimination, and there are no sufficient finances.292

5.10 Human rights in practice

Human rights are generally respected by the Latvian government.293 However, this is not always the case. This section will address the main issues in the protection of human rights in Latvia. The analysis does not pretend to be exhaustive. It deals with three main groups whose rights are not always observed by the Latvian state: members belonging to national minorities, LGBTs (lesbian, gay, bisexual and transgender) and prisoners.

5.10.1 Recognition of national minorities Article 114 of the Latvian constitution enables members of minorities to preserve and develop

285 Interview R07. 286 I. Brands Kehris, ‘Development of anti-discrimination legislation and practice in Latvia: EU accession and remaining challenges’, retrieved from: http://ec.europa.eu/ewsi/en/resources/detail.cfm?ID_ITEMS=22705, consulted on 4 June 2012, p. 21. 287 Ibid., p. 20. 288 Interview R64. 289 Ibid. 290 Ilze Brands Kehris, ‘Development of anti-discrimination legislation and practice in Latvia: EU accession and remaining challenges’, retrieved from: http://ec.europa.eu/ewsi/en/resources/detail.cfm?ID_ITEMS=22705, consulted on 4 June 2012, p. 18. 291 Interview R49. 292 Ibid.; interview R07; interview R24. 293 US Department of State, ‘2008 Human rights report: Latvia’ retrieved from: http://www.state.gov/j/drl/rls/hrrpt/2008/eur/119087.htm, consulted on 12 June 2012. 130 LAW

their language and ethnic and cultural identity. The rights of national minorities are further dealt with in the ‘Law on the Unrestricted Development and Right to Cultural Autonomy of Latvia’s Nationalities and Ethnic Groups’, according to which ‘Latvia’s residents are guaranteed, regardless of their national origin, equal human rights as provided for by international standards’.294 Although the law guarantees some basic rights to minorities, such as the right to organise their own national organisations, unions and associations, some suggest that the law is purely declarative and does not contain any effective mechanisms of legal protection.295 The only exception to this is article 5, which obliges the state to facilitate the work of national minority organisations and provide them with financial support. However, according to the Council of Europe, state financial support for the organisations of national minorities has significantly dropped in the last years.296 In 1995, Latvia signed the Framework Convention for the Protection of National Minori- ties. However, the ratification process took a long time, due to disagreements about the definition of ‘minority’, as well as doubts about the compatibility of the Latvian language legislation with the Convention.297 In May 2005, Latvia finally ratified the Convention. The Latvian parliament defined national minorities as follows:

‘Citizens of Latvia who differ from Latvians in terms of their culture, religion or language, who have traditionally lived in Latvia for generations and consider themselves to belong to the State and society of Latvia, who wish to preserve and develop their culture, religion or language. Persons who are not citizens of Latvia or another State but who permanently and legally reside in the Republic of Latvia, who do not belong to a national minority within the meaning of the Framework Convention for the Protection of National Minorities as defined in this declaration, but who identify themselves with a national minority that meets the definition contained in this declaration, shall enjoy the rights prescribed in the Framework Convention unless specific exceptions are prescribed by law.’298

Moreover, Latvia attached declarations to two articles of the Convention, namely article 10, paragraph 2 (dealing with the use of minority languages before local authorities) and article 11, paragraph 2 (regarding toponymic signs in minority languages). According to Latvia, the

294 Law ‘On the Unrestricted Development and Right to Cultural Autonomy of Latvia’s Nationalities and Ethnic Groups’, retrieved from: http://www.humanrights.lv/doc/latlik/ethnic.htm, consulted on 3 June 2012. 295 V. Poleshchuk (ed.), Chance to Survive: Minority Rights in Estonia and Latvia, Moscow – Paris – Tallinn: Foundation for Historical Outlook, 2009, p. 152. 296 Council of Europe, ‘Resolution CM/ResCMN(2011)6 on the implementation of the Framework Convention for the Protection of National Minorities by Latvia, retrieved from: https://wcd.coe.int/ViewDoc.jsp?id=1768985&Site=CM, consulted on 18 March 2012. 297 D.J. Galbreath, N. Muiznieks, ‘Latvia: managing post-imperial minorities’ In: Rechel, B., ed. Minority Rights in Central and Eastern Europe, London: Routledge 2009, p. 144. 298 Ministry of Foreign Affairs of the Republic of Latvia, ‘Ratification of the Council of Europe Framework Convention for the Protection of National Minorities’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/4649/framework/?print=on, consulted on 23 May 2012. LATVIA AND THE EUROPEAN UNION 131 application of these two articles happens without prejudice to the constitution and the legislative acts governing the use of the State language that are currently into force.299 This means that members of national minorities cannot use their language before local authorities nor ask for the placement of toponymic signs in minority languages, as the Latvian language is considered the only official language by the State Language Law. The Council of Europe has criticised both the definition of ‘minority’ and the declarations.300 With regard to the definition, the Council of Europe welcomed the fact that non- citizens were included in it but regretted the fact that they could not invoke some of the provisions of the Convention (especially those related to effective participation in public life), due to specific exceptions under Latvian law.301 As far as the two declarations are concerned, the Council of Europe is worried about the fact that persons belonging to national minorities in Latvia do not fully benefit from important provisions of the Framework Convention.302 This goes especially for the provisions relating to the use of their minority languages in dealings with the administrative authorities and to the use of minority languages in local topographical indications.303 It is suggested that the Latvian government is not willing to drop the aforementioned reservations.304 The main reason behind this is the fear that by allowing people to use Russian when dealing with public authorities, the Latvian language will be endangered on the long term.305 In spite of the State Language Law, which stipulates that Latvian is the only official language in the country and which limits the use of all other languages in the public sphere, the government still considers the widespread use of the Russian language (for example in the media) a threat for the existence of the Latvian language.306 It has been suggested that by dropping the reservations, the Latvian language would be endangered to a greater degree than it is now.307 Despite the reservations as well as the obligations imposed by the State Language Law, the situation in practice is much more flexible. Municipalities with large numbers of Russian speakers provide oral as well as written information in the Russian language and translate complaints written in Russian to Latvian on a frequent basis.308

Integration policy

299 D.J. Galbreath, N. Muiznieks, ‘Latvia: managing post-imperial minorities’ In: Rechel, B., ed. Minority Rights in Central and Eastern Europe, London: Routledge 2009, p. 145. 300 Council of Europe, ‘Resolution CM/ResCMN(2011)6 on the implementation of the Framework Convention for the Protection of National Minorities by Latvia’, retrieved from: https://wcd.coe.int/ViewDoc.jsp?id=1768985&Site=CM, consulted on 18 March 2012. 301 Ibid. 302 Ibid. 303 Ibid. 304 Interview R17; interview R24. 305 Interview R24. 306 Ibid. 307 Ibid. 308 Interview R07. 132 LAW

Latvia’s integration policy was established in 1999, when it came under the Ministry of Jus- tice. In 2003, the government created the post of Special Assignment Minister for Social Inte- gration. This post lasted until 2009, when the integration policy was moved to the Ministry of Family Affairs. Only half a year later it was transferred and came to belong to the Ministry of Justice again. Since 2011, integration policy falls within the competence of the Ministry of Culture of Latvia.309 Although integration policy now falls under the Ministry of Culture, the policy is said to be a ‘horizontal policy’, meaning that plural ministries of the Latvian government are involved in the implementation of the integration policy guidelines.310 In 2011, the government approved its most recent ‘Guidelines on national identity, civil society and integration policy’ for 2012-2018. The main goal of this programme is described as follows:

‘A strong, cohesive Latvian people: a national and democratic community ensuring the maintenance and enrichment of its unifying foundation – the Latvian language, culture and national identity, European democratic values and the unique cultural space aimed at the balanced development of the democratic Nation State of Latvia.’311

Although the programme declares that the integration process must not lead to forced assimilation, some legislative acts contain provisions that could be interpreted as soft assimilation.312 The State Language Law is a good example of this: minorities have the right to choose any language in the private domain, but in the public domain the Latvian language must be the only official language.313 Another example is the fact that employees in the public sector whose mother tongue is not Latvian need to meet certain language standards by taking a language examination.314 One of the parties that explicitly criticised the new guidelines, is the Council of Non- Governmental Organisations of Latvia. The council mentions three objections against the proposed integration programme. Firstly, the principles of integration offered by the Ministry of Culture would be ‘aimed at full assimilation of national minorities’ and would be ‘aimed at ousting cultural and intellectual values of other ethnic groups living in Latvia’.315 Secondly, the council criticises the way the Ministry presents Latvia’s historic events in the 1940s. Ac- cording to the Council, the programme gives an ‘explicitly imposed and unsubstantiated un-

309 Interview R70. 310 Ibid. 311 Ministry of Culture of the Republic of Latvia, Guidelines on national identity, civil society and integration policy (2012-2018), Riga: LTD “Holdja” 2012, p. 12. 312 V. Poleshchuk (ed.), Chance to Survive: Minority Rights in Estonia and Latvia, Moscow – Paris – Tallinn: Foundation for Historical Outlook, 2009, p. 161. 313 ‘State Language Law 1992’, as last amended on 31 March 1992 , retrieved from: http://www.vvk.lv/index.php?sadala=135&id=165, consulted on 4 March 2012. 314 V. Poleshchuk (ed.), Chance to Survive: Minority Rights in Estonia and Latvia, Moscow – Paris – Tallinn: Foundation for Historical Outlook, 2009, p. 164. 315 Baltic Review, ‘Latvia: The program of “integration” is insulting and unacceptable for all national minorities’, 23 November 2011, consulted on 2 June 2012. LATVIA AND THE EUROPEAN UNION 133 derstanding of historic events in Latvia of the 1940s’, which is ‘directed to elimination of alternative opinion and adopts the form of totalitarian state’.316 A third objection against the integration programme is the fact that, considering the current political situation, it can be considered as ‘agitational material of one of the political parties’.317 The Council mentions two conditions which they regard as necessary improvements for the integration policy of Latvia. To begin with, it should be ‘based on accepting and mutual respect of cultural and intellectual values of national majority as well as of all national minorities living in Latvia’.318 Furthermore, the programme should be ‘aimed at creating and strengthening multicultural connections between all ethnic societies living in Latvia’.319 In its reacting declaration, the Council of Non-Governmental Organizations of Latvia says to be ready to participate in drafting a new project of integration.320 Despite all the criticism and controversy around the draft guidelines, the Ministry of Cul- ture adopted the Guidelines at the end of 2011.321

Education policy Until the mid-1990s, two different school systems - Russian and Latvian - existed in Latvia.322 In 1998 a new Law on Education was adopted. This involved achieving that a minimum of 60% of classes in national minority schools are taught in the Latvian language, whereas up to 40% of classes are available in the language of the national minority or bilingually. (For more on the ‘40-60’ issue, please refer to section 8.2.6 on page 324.) State-financed education in Latvia is now available in eight national minority programmes – Russian, Polish, Ukrainian, Belarusian, Lithuanian, Estonian, Hebrew and Romani.323

5.10.2 The Russian-speaking minority Statelessness In 1991 the Supreme Council adopted the resolution ‘On the Renewal of the Republic of Lat- via Citizens’ Rights and Fundamental Principles of Naturalisation’. According to this resolution the following groups were granted automatic citizenship: (I) those who where Latvian nationals on 17 June 1940 and their descendants, if they had lived in the country and had registered by 1 July 1992; (II) those who were Latvian nationals on 17 June 1940 and their descendants if they did not reside in Latvia or were nationals of another state and had submitted

316 Ibid. 317 Ibid. 318 Ibid. 319 Ibid. 320 Ibid. 321 Ministry of Culture, Guidelines on national identity, civil society and integration policy (2012-2018), Riga: LTD “Holdja” 2012, p. 12. 322 Ministry of Foreign affairs of the Republic of Latvia, ‘Why national minority education reform was needed’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/4643/why-needed/, consulted on 19 March 2012. 323 Ministry of Foreign Affairs of the Republic of Latvia, ‘Minority Education in Latvia’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/4643/, consulted on 19 March 2012. 134 LAW

an expatriation permit; (III) persons born and residing in Latvia if their parents were unknown.324 The three groups together equalled up to 64% of the resident population in 1991.325 The rest of the population, meaning all those who arrived in Latvia from the former USSR after 1940, found themselves stateless. This equalled up to 36% of the resident population in 1991.326 Only the legal citizens of Latvia were entitled to participate in the first elections and could decide on the future of the new, independent Latvia.327 Western-European countries as well as international organisations were afraid that the presence of a large number of persons without any nationality would provoke ethnic conflicts and thus could threaten the internal stability of the country.328 Moreover, this group could not be officially classified as stateless as this would be against the ‘principle of the reduction of statelessness’.329 For these reasons, a new category of people was created in Latvia in 1995: the non-citizens. This happened by the adoption of the law ‘On the Status of Former USSR Citizens, Who are not Citizens of Latvia or Any other State’. In its judgment of 7 March 2005, the Constitutional Court defined non-citizens as follows:

‘After passing the Non-Citizen law a new, and hitherto unknown category of persons appeared - Latvian non-citizens. Latvian non-citizens cannot be compared with any other status of a physical entity, determined in international legal acts, as the rights, established for non-citizens, do not comply with any other status. Latvian non-citizens can be regarded neither as citizens, nor as aliens and stateless persons, but as persons with a ‘specific legal status’.330

Non-citizens enjoy diplomatic protection and own a special passport that allows them to enter the Schengen area and to return to Latvia.331 Moreover, they cannot be extradited.332 Howev- er, non-citizens are not granted the right to vote and they cannot occupy specific state and public positions.333 Restrictions also exist on land ownership and on social allowances. 334

324 K. Kr/ma, ‘Checks and balances in Latvian nationality policies: National agnedas and international frame- works’, in Bauböck R (eds.), Citizenship Policies in the New Europe, Amsterdam: Amsterdam University press, 2009, pp. 68-69. 325 N. Gelazis, ‘The effects of EU conditionality on citizenship policies and the protection of national minorities in the Baltic states’, in Pettai&Zielonka, The road to the European Union, Manchester: Manchester University Press 2003, p. 51. 326 Ibid., p. 51. 327K. Kr/ma, ‘Checks and balances in Latvian nationality policies: National agnedas and international frame- works’, in Bauböck R (eds.), Citizenship Policies in the New Europe, Amsterdam: Amsterdam University press, 2009, p. 82. 328 Ibid., p. 72. 329 Ibid., p. 72. 330 Latvian Human Rights Committee, ‘Citizens of a non-existent state. The long-term Phenomenon of Mass Statelessness in Latvia’, Riga: ‘Averti-R’ Idt 2011, p.5. 331 M. Lynch, ‘Latvia: the perilous state of nationality rights’, retrieved from: http://refugeesinternational.org/policy/field-report/latvia-perilous-state-nationality-rights, consulted on 20 May. 332 Ibid. 333 Ibid. 334 Ibid. LATVIA AND THE EUROPEAN UNION 135

Some of the restrictions have been taken to national courts as well as the European Court of Human Rights. An example is the restriction on the old-age pensions of non-citizens. Ac- cording to the Law ‘On state pensions’ adopted in 1995, the years of employment outside Latvia are not included into the non-citizen’s employment record when calculating pension rates.335 Only in cases where Latvia has a supplementary agreement with another state, the years worked in said state can be added to one’s full employment record.336 Latvia has signed such an agreement with many countries, but not with Belarus or the Russian Federation, for example.337 Whereas the Constitutional Court found the provisions of the Law ‘On state pension’ in line with the constitution, the European Court of Human Rights found it a violation of article 14 of the Convention (prohibition of discrimination) in the case Andrejeva v. Latvia.338 In order to comply with the judgment, amendments on the Law ‘On State pensions’ were adopted in the first reading.339 They foresaw to abolish discrimination by cancelling rights of Latvian citizens to receive pensions for all the time worked in the USSR outside Latvia. How- ever, these amendments were not adopted in a second reading.340 Instead, a separate Treaty was signed with Russia. Latvian non-citizens now receive pension from the Latvian government for the years worked in Russia.341 However, discrimination remains in place for all non- citizens who worked in countries with which no separate treaty has been concluded with the Republic of Latvia.342 Latvia has been further criticised by European institutions for the fact that non-citizens do not have the right to vote for the local government. The Commissioner for Human Rights of the Council of Europe expressed his concerns on this issue in a Memorandum to the Latvian government in 2007.343 He invited the government to end the exclusion of non-citizens from political life, in order to encourage their integration in the Latvian society.344 The issue has also been addressed by the European Parliament on several occasions. In 2009, several MEPs asked the Commission to take action against Latvia.345 They blamed Latvia for not granting non-citizens the right to vote at the local level, especially since EU citizens living in Latvia do have this right. However, the Commission refused to take any action, since the participation

335 V. Pettai, ‘Ethnopolitics in Constitutional Court: Estonia and Latvia compared’, East European Constitution- al Review, nr. 4, 2003, p. 104. 336 Ibid., p. 104. 337 Ibid., p. 104. 338 European Court of Human Rights Andrejeva v. Latvia, retrieved from: http://sim.law.uu.nl/SIM/CaseLaw/hof.nsf/2422ec00f1ace923c1256681002b47f1/3bcb67663658772ac12575630 02f70cd?OpenDocument, consulted on 16 March 2012. 339 Interview R17. 340 Ibid. 341 Ibid. 342 Ibid. 343 Commissioner for Human rights, ‘Memorandum to the Latvian government’, retrieved from: https://wcd.coe.int/ViewDoc.jsp?id=1134279, consulted on 20 March 2012. 344 Ibid. 345 European Parliament, ‘Voting rights for non-citizens of Latvia in local elections (debate)’, retrieved from: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+CRE+20090203+ITEM- 015+DOC+XML+V0//EN , consulted on 17 March 2012. 136 LAW

in elections of people who are not nationals of an EU country does not fall within the EU competences.346 In 2008 the Latvian political party ‘For Human Rights in a United Latvia’ attempted to amend the law on local elections to allow non-citizens to participate in local elections, without success.347 One of the fears of the Latvian government regarding this issue is that non-citizens will vote for the party ‘Concord Centre’, which is considered a pro- Russian party (see also page 173).348 This is yet another reason why it is not in the interest of the coalition government to grant non-citizens voting rights.

Naturalisation Non-citizens can choose to undergo a naturalisation process. This naturalisation process has, never been undisputed and has been amended in the course of time, in order to take into account the recommendations of international human rights organisations such as the UN, the Council of Europe, and the OSCE. In 1993 the Saeima proposed the first draft of the Naturalisation Law. The most controversial aspect of the Law was the introduction of the so-called ‘quota-system’.349 This system was meant to regulate the number of people that naturalised each year. Only 1,600 people were to be naturalised each year, which accounted for 0,1 % of the non-citizens in 1993.350 The quota-system received a lot of criticism from the international community. The OSCE mission advised Guntis Ulmanis, the Latvian president at the time, to veto the draft, since it would have excluding consequences.351 Under pressure of the OSCE and the Council of Eu- rope, the parliament decided not to implement the quota-system.352 In 1994 the parliament adopted the so-called ‘window-system’ instead.353 This naturalisation procedure was not open to everyone: the window-system gave priority to those who were born in Latvia over those who were born outside Latvia, as well as to the young age group in each category, over the older ones.354 The naturalisation procedure dictated the following requirements:355 - Five years of permanent residence in Latvia starting from May 1990;

346 Ibid. 347 Latvian Human Rights Committee, ‘Citizens of a non-existent state. The long-term Phenomenon of Mass Statelessness in Latvia’, Riga: ‘Averti-R’ Idt 2011, p.7. 348 Interview R17; interview R72. 349 K. Kr/ma, ‘Checks and balances in Latvian nationality policies: National agnedas and international frame- works’, in Bauböck R (eds.), Citizenship Policies in the New Europe, Amsterdam: Amsterdam University press, 2009, p. 82. 350 Ibid., p. 82. 351 Kesating and McGarry, Minority: nationalism and changing international order, Oxford: Oxford university Press 2001, p. 355. 352 Ibid., p. 355. 353 Ministry of Foreign Affairs of the Republic of Latvia, ‘Citizenship in Latvia’, retrieved from: ttp://www.am.gov.lv/en/policy/4641/4642/4651/, consulted on 17 March 2012. 354 M. van der Stoel, ‘Letter to the Foreign Minister of Latvia’, retrieved from: http://www.cilevics.eu/minelres/count/latvia/970523r.htm, consulted on 17 March 2012. 355 Saeima, ‘Transitional Provisions regarding Amendments to the Citizenship Law’, 22 June 1994. LATVIA AND THE EUROPEAN UNION 137

- Command of the Latvian language, history, the national anthem, knowing basic principles of the Latvian constitution; - Proof of a legal income. The 1994 law also prescribed specifications for the language exam. Moreover, the Law provided a list of persons who were excluded from the possibility to obtain citizenship. These persons included:356 - Former military servicemen; - Those who served in the armed forces or police of a foreign state (including the USSR); - Agents of the KGB or other security services; - Those who acted against Latvian independence. This controversial system was criticised by the European Union, amongst others. In preparation for EU membership, the issue of statelessness became a critically important case.357 Alt- hough not explicitly referring to it, the European Commission advised the Latvian government to take measures to accelerate naturalisation procedures and to enable the Russian- speaking non-citizens to become better integrated into Latvian society, in 1997.358 From 1997 onwards, the OSCE also started to emphasise the need to grant automatic citizenship to children born to non-citizens. 359 The ‘window system’ was finally lifted by a referendum in 1998 and permitted all who desired to apply for naturalisation.360 A majority of ethnic Latvians voted against the liberalised naturalisation process, but the referendum passed with 52%, because of the ‘Yes’ votes of Russian-speakers who had already become Latvian citizens.361 Apart from that, the naturalisation exams have been heavily criticised. In order to obtain Latvian citizenship, the applicant has to pass a language examination, as well as an exam on the Latvian constitution and history. Furthermore, applicants have to be able to write or recite the national anthem.362 In 1997 the former High Commissioner on National Minorities of the OSCE criticised the history component of the naturalisation test and he stated that most citizens of the Netherlands would not pass a comparable test on Dutch history and law.363 The European Commission shared these criticisms in its report on Latvia in 1998.364 In 2005, the

356 Ibid. 357 J. Bernier, ‘Nationalism in Transition: Nationalising impulses and international counterweights in Latvia and Estonia’, in Kesating and McGarry, 2001. 358 European Commission, ‘Opinion on Latvia’s Application for Membership of the European Union’, DOC/97/14, p.21. 359 J. Bernier, ‘Nationalism in Transition: Nationalising impulses and international counterweights in Latvia and Estonia’, in Kesating and McGarry, 2001, p. 355. 360 D.J. Galbreath, N. Muiznieks, ‘Latvia: managing post-imperial minorities’. In: Rechel, B., ed. Minority Rights in Central and Eastern Europe, London: Routledge 2009, p. 141. 361 W. Clemens, The Baltic transformed: complexity theory and European security, Oxford: Rowman and Little- field Publishers 2001, p. 123. 362 Office of Citizenship and migration affairs,’ Acquisition of the citizenship of Latvia through naturalization’, retrieved from: http://www.pmlp.gov.lv/en/Citizenship/Naturalizacija.html, consulted on 17 March 2012. 363 D. Galbreath, European integration through Democratic Conditionality: Latvia in the Context of Minority Rights, Journal of Contemporary European Studies, nr 1, 2006, p. 80. 364 European Commission, Regular Report from the Commission on Latvia’s progress towards accession (1998), 138 LAW

Latvian government introduced a simplification of the naturalisation process. This foresaw a simplification of the language and history tests, an oral examination for persons over the age of 65 (instead of both oral and written), and a reduction of fees for students and pensioners.365 There are plans to streamline the process even further by posting free trial examination on the Internet and by offering free language courses.366 Nowadays the exams are said to conform to international standards.367 Another point of criticism of the naturalisation process is the fact that there are still children being born as non-citizens.368 According to the naturalisation process before 2011, children could obtain the Latvian citizenship only by the age of 15 on application by both parents; by becoming naturalised together with their parents; or by undergoing naturalisation independently.369 The Commissioner for Human Rights of the Council of Europe pointed to a lack of commitment regarding the issue on the part of the Latvian authorities and advised them to amend legislation to allow parents to choose the status they want for their children when they register their births, in 2007.370 Since 2011, non-citizens can submit an application to citizenship when registering the birth of their children.371 However, only a small percentage of the parents applied for citizenship for their child during the first year of existence of this law.372 A last point of criticism regards the fact that the government can refuse naturalisation to individuals if they are found to be disloyal. Famous is the case of Jurijs Petropavlovskis, a non-citizen who was denied citizenship in 2004 by the Cabinet of Ministers because of his radical activism against the Education Reform.373 The applicant initiated administrative proceedings against the Cabinet of Ministers, but these were rejected by the administrative district court, which considered the decision of the Cabinet of Ministers a political one and thus not subject to examination by a court.374 The applicant appealed but both the administrative regional court and administrative chamber of the Supreme Court upheld the initial decision.375 The applicant decided to lodge an application at the European Court of Human rights in 2006,

p. 12. 365 M. Lynch, ‘Latvia: the perilous state of nationality rights’, retrieved from: http://refugeesinternational.org/policy/field-report/latvia-perilous-state-nationality-rights, consulted on 20 May. 366 Interview R33. 367 Ibid.; interview R24. 368 Interview R24. 369 Latvian Human Rights Committee, Citizens of a non-existent state. The long-term Phenomenon of Mass Statelessness in Latvia, Riga: ‘Averti-R’Idt, 2011, p.16. 370 Commissioner for Human rights, ‘Memorandum to the Latvian government’, retrieved from: https://wcd.coe.int/ViewDoc.jsp?id=1134279, consulted on 20 March 2012. 371 Ministry of Foreign Affairs of the Republic of Latvia, ‘Citizenship to children’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/4651/citizenship-to-children/, consulted on 18 March 2012. 372 Interview R33. 373 European Court of Human Rights, ‘Decision as to the admissibility of Application no. 44230/06 by Jurijs PETROPAVLOVSKIS against Latvia’, retrieved from: http://cmiskp.echr.coe.int/tkp197/viewhbkm.asp?sessionId=38267451&skin=hudoc- en&action=html&table=F69A27FD8FB86142BF01C1166DEA398649&key=69237&highlight= ,consulted on 18 March 2012. 374 Ibid. 375 Ibid. LATVIA AND THE EUROPEAN UNION 139 which was declared admissible in 2008.376 As of May 2012, the case is still pending. Between the start of the naturalisation process on 1 February 1995 and 30 September 2011, 135 840 persons have been granted Latvian citizenship by order of the Cabinet of Min- isters.377 As can be seen in Figure 1, the number of new citizens increased dramatically after the ‘window system’ was lifted in 1998. The rate of naturalisation reached its peak in 2005, a year after Latvian accession to the EU, but has fallen drastically since 2007. Some authors assume that EU membership resulted in a new incentive to apply for citizenship in 2004.378 Initially, non-citizens, unlike Latvian citizens, did not have the right to work in other EU Member States.379 That changed in January 2007 when the labour markets of many EU Mem- ber States were opened to Latvia’s non-citizens as well.380 This might explain the drop in applications since 2007.381

Figure 5.4: Naturalisation in Latvia 1995-2010.382

Mainly due to the naturalisation process, the number of non-citizens has halved in the period 1993 - 2011 (from 714 980 in 1993383 to 290 660 in 2011,384 which is approximately 30 %

376 Ibid. 377 Ministry of Foreign Affairs of the Republic of Latvia, ‘Citizenship in Latvia’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/4651/, consulted on 17 March 2012. 378 D.J. Galbreath , N. Muiznieks, ‘Latvia: managing post-imperial minorities’ In: Rechel, B., ed. Minority Rights in Central and Eastern Europe, London: Routledge 2009, p. 141. 379 Ibid., p. 141. 380 Ibid., p. 141. 381 Ibid., p. 142. 382 Office of Citizenship and Migration affairs, ‘Statistics on Naturalization’, retrieved from: http://www.pmlp.gov.lv/en/statistics/citizen.html, consulted on 23 May 2012. 383 B. Bowring, ‘Report of a second mission to the Republic of Latvia on behalf of FIDH and Bar of England and Wales’, retrieved from: http://www.barhumanrights.org.uk/docs/missionlatvia.pdf, consulted on 18 March 2012. 384 Latvijas Statistika, ‘Population Census 2011, retrieved from: http://www.csb.gov.lv/en/statistikas- temas/population-census-2011-key-indicators-33613.html ,consulted on 18 March 2012. 140 LAW

and 14 % of the total population, respectively). Yet, there still remain 290 660 non-citizens in the country.385 In 2009, an opinion survey was held under non-citizens on obtaining Latvian citizenship. The survey revealed that approximately half of the respondents do not want to obtain citizenship of Latvia; one third of the respondents pointed to practical difficulties, which refrain them from aiming for Latvian citizenship.386 Another survey was carried out in 2011 among non-citizens by the Naturalisation Board. According to this survey, 25% of the respondents do not apply for citizenship because they expect the state to grant citizenship automatically at some point; 21 % of the respondents think the examinations are too hard for them; 16 % still wait for exemptions and facilitations before applying and 14 - 15 % prefer maintaining the non-citizen status, as this enables them to enter the Russian Federation without any visa since 2008.387

5.10.3 Sexual minority rights During the Soviet period same-sex sexual activity was considered a criminal offence and a mental illness in Latvia. In 1992, soon after Latvia regained independence from the Soviet Union, homosexuality was decriminalised.388 The democratisation process has allowed LGBT people to establish their own organisations, bars, clubs, libraries etc. However, according to a survey conducted by Eurostat in 2006, public perception and attitudes towards homosexuality are amongst the most negative in Europe.389 Only 12 % of the Latvians have a positive attitude towards marriage between same-sex partners and only 8 % support the idea of adoption by homosexual couples (the EU wide average is 44 % and 32 % respectively).390 These attitudes are confirmed by two more recent surveys conducted by the Latvian polling institute SKDS.391 According to Richard Mole, homosexuality is not accepted in Latvia; not only because of the Communist legacy and the influence of religion, but also because it is considered a threat for the existence of the Latvian nation.392 In fact, after the independence in 1991, politicians attempted to construct a Latvian ethno-national identity based on the family and on traditional gender roles and sexual norms, which are presented as ‘normal’ as opposed to the

385 Ibid. 386 V. Makarovs, A. Dimitrovs, "Latvijas nepilso(i un balssties!bas: kompromisi un risin#jumi” 2009, retrieved from: http://politika.lv/article/latvijas-nepilsoni-un-balstiesibas-kompromisi-un-risinajumi, consulted on 8 April 2012. 387 Interview R33. 388 R. Mole, ‘Nationality and sexuality: homophobic discourse and the `national threat' in contemporary Latvia’, Nations and Nationalism 17 (3), 2011, p. 540. 389 European Commission, ‘Eurobarometer 66 (first results)’, retrieved from: http://ec.europa.eu/public_opinion/archives/eb/eb66/eb66_highlights_en.pdf , consulted on 1 March 2012, pp. 41-42. 390 Ibid., pp. 41-42. 391 ILGA Europe & Mozaika, ‘Latvia: the Status of Lesbian, Gay, Bisexual and Transgender Rights’, retrieved from: http://www.ilga-europe.org/home/guide/country_by_country/latvia/Submission-on-LGBT-Rights-11th- session-of-the-universal-Periodical-Review, consulted on 12 May 2012, p. 2. 392 R. Mole, ‘Nationality and sexuality: homophobic discourse and the `national threat' in contemporary Latvia’, Nations and Nationalism 17 (3), 2011, p. 560. LATVIA AND THE EUROPEAN UNION 141

‘abnormal’ Soviet experience.393 As a result, anything perceived as ‘non-traditional’ and ‘abnormal’ is considered not just alien but also as a threat to the very existence of the Latvian nation.394 The lack of acceptance of homosexuality in Latvia makes the lives of LGTBs rather difficult. In fact, most LGBTs live their lives hiding their sexual orientation and/or gender identity.395 The government does very little to change this situation. There are no governmental researches or monitoring mechanisms in relation to LGBT issues, for example. Moreover, no funding is allocated for LGBT research.396

Freedom of expression and assembly Although the freedom of expression and assembly is guaranteed by the Latvian constitution, the Riga City Council decided to ban the gay pride parade in the centre of Riga in 2005, 2006 and 2009. Whereas in 2005 and 2009 the march could go on due to different court judgements, the Administrative Court upheld the decision of the Riga city Council in 2006. How- ever, the ban was declared illegal by the Supreme Court in 2007.397 The Riga City Council seems not to have rested its case yet. In April 2012, the city council’s committee on Safety, Public Order and Corruption Prevention Issues submitted a proposal to prohibit ‘propaganda of homosexualism’ in the administrative territory of Riga.398 At the time of writing, the City Council of Riga has not pronounced itself about the ban yet.

Criminal Law: hate crime There are no reports on the level of violence and attacks against LGBTs in Latvia. Partially, this has to do with the fact that the police does not report whether a victim belongs to the LGBT community or not. Another reason for the lack of reports is the fact that people are not open about their sexual orientation and will therefore never label an attack as a homophobic hate crime.399 In any case, Latvian Criminal Law does not define homophobic motivation as an aggravating circumstance.400 For instance, during the 2006 gay pride, 14 anti LGBT-

393 Ibid., p. 559. 394 Ibid., p. 560. 395 ILGA Europe & Mozaika, ‘Latvia: the Status of Lesbian, Gay, Bisexual and Transgender Rights’, retrieved from: http://www.ilga-europe.org/home/guide/country_by_country/latvia/Submission-on-LGBT-Rights-11th- session-of-the-universal-Periodical-Review, consulted on 12 May 2012, p. 1. 396 Ibid., p. 1. 397 European Union Agency for Fundamental Rights, The social situation concerning homophobia and discrimination on grounds of sexual orientation in Latvia, Luxemburg: Publication Office of the European Union 2009, pp. 6-7. 398 Skapis.eu, ‘Riga city Council will decide on homosexuality propaganda’, retrieved from: http://skapis.eu/en/2012/04/english-riga-city-council-will-decide-on-homosexuality-propaganda-ban/, consulted on 11 May 2012. 399 ILGA Europe & Mozaika, ‘Latvia: the Status of Lesbian, Gay, Bisexual and Transgender Rights’, retrieved from: http://www.ilga-europe.org/home/guide/country_by_country/latvia/Submission-on-LGBT-Rights-11th- session-of-the-universal-Periodical-Review, consulted on 12 May p. 3. 400 European Union Agency for Fundamental Rights, The social situation concerning homophobia and discrimination on grounds of sexual orientation in Latvia, Luxemburg: Publication Office of the European Union 2009, 142 LAW

activists were arrested for throwing excrements and shouting offensive slogans, six of whom appeared in court and were merely fined 50 to 70 euros each.401

Education Issues related to homosexuality are not part of the educational programmes and are only discussed in schools if individual teachers choose to do so.402 There is no obligation for school- teacher to give sex education either.403

Family issues In 2005, in a reaction to the first Riga Gay Pride, the constitution was amended by the parliament to prohibit same-sex marriages.404 Art. 110 of the Latvian Constitution now recites: ‘The State shall protect and support marriage - a union between a man and a woman - the family, the rights of parents and the rights of the child [emphasis added].’ Neither same-sex partnership nor cohabitation are recognised by national legislation. Mozaika, the only Latvian NGO dealing with LGBT rights, submitted a draft partnership law to the Saeima in 2011. In January 2012, the Ombudsman Juris Jansons advised the Cabinet of Ministers not to introduce same- sex registered partnership, primarily because Latvians were not prepared to accept homosexual relations as a normatively acceptable lifestyle.405 Instead, the Ombudsman asked the government to amend a series of legal acts (on the protection of the rights of patients, on the prevention of conflict of interests, on procedural law, on personal social rights and on the rights to information) in order to bring the level of protection of unmarried couples, including same- sex couples, closer to the level of protection of married couples.406 However, the Minister of Justice found that there was no need for amending any laws and that the judges could simply interpret some existing norms in order to strengthen the rights of unmarried couples.407 The Ombudsman was not satisfied with the answer of the Minister of Justice and decided to send a new letter to the Cabinet of Ministers, explaining the need to amend those laws. The response

p. 5. 401 Ibid., p. 5. 402 ILGA Europe & Mozaika, ‘Latvia: the Status of Lesbian, Gay, Bisexual and Transgender Rights’, retrieved from: http://www.ilga-europe.org/home/guide/country_by_country/latvia/Submission-on-LGBT-Rights-11th- session-of-the-universal-Periodical-Review consulted on 12 May, p. 4. 403 Interview R28. 404 European Union Agency for Fundamental Rights, The social situation concerning homophobia and discrimination on grounds of sexual orientation in Latvia, Luxemburg: Publication Office of the European Union 2009, p. 7. 405 Ombudsman of the Republic of Latvia, ‘Letter to the Human Rights and Public Affairs Commitee of the Latvian Saeima and the Legal Commitee of the Latvian Saeima on the legal regulation of partner relationship’, retrieved from: http://www.ilga- eu- rope.org/home/guide/country_by_country/latvia/opinion_from_the_latvian_ombudsman_on_the_partnership_pr oposal, consulted on 12 May 2012, p. 4. 406 Ibid., p. 4. 407 Interview R49. LATVIA AND THE EUROPEAN UNION 143 is yet to come. If it does not, recurring to the Constitutional Court is the next step.408

Discrimination Discrimination on the ground of sexual preference is only prohibited in private and public employment and civil service.409 Although a couple of cases were brought before the different courts is not known to what extent LGBTs are discriminated in the labour market.410 This is partly due to the fact that people do not want to report discrimination; and because of a widespread lack of understanding of what discrimination actually is.411.

The role of the EU The European Union has played an important role in the strengthening of LGBT rights in Latvia, especially after Latvia’s accession. Before 2004, LGBT rights were not on the national agenda at all; probably because there had not been any Gay Pride yet and because LGBT rights were not a priority.412 After accession and with the first Gay Pride, which led to acts of violence, the pressure from the EU increased. The European Commission recognises homophobia as a reality in Latvia and provides funds for the elimination of it.413 In 2006 the Euro- pean Parliament adopted a resolution called ‘Homophobia in Europe’, condemning that ‘a series of worrying events has recently taken place in a number of Member States […] ranging from banning gay pride or equality marches to the use by leading politicians and religious leaders of inflammatory or threatening language or hate speech, failure by the police to provide adequate protection or even breaking up peaceful demonstrations, violent demonstrations by homophobic groups, and the introduction of changes to constitutions explicitly to prohibit same-sex unions.’414 Despite not condemning any Member State in particular, it is clear that Latvia was one of the targets of concern.415 Another occasion in which the EU put Latvia under pressure concerned the failure of the Saeima to prohibit discrimination on the ground of sexual orientation in the work place, as prescribed by the EU Employment Antidiscrimination Directive. The Human Rights and Social Affairs Commission of the Saeima rejected the proposal to protect gay rights in the workplace three times (in 1999, 2003 and 2004).416 In June

408 Ibid. 409 European Union Agency for Fundamental Rights, The social situation concerning homophobia and discrimination on grounds of sexual orientation in Latvia, Luxemburg: Publication Office of the European Union 2009, p. 8. 410 Interview R28. 411 Ibid. 412 Ibid. 413 Ibid. 414 European Parliament, ‘European Parliament resolution on homophobia in Europe’, retrieved from: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2006- 0018+0+DOC+XML+V0//EN, consulted on 12 May 2012. 415 C. O’ Dwyer, K. Schwartz, ‘Minority rights after enlargement: A comparison of anti-gay politics in Poland and Latvia’, Comparative European Politics 8 (2), 2010, p. 233. 416 Ibid., p. 226. 144 LAW

2006, the parliament voted against the sexual orientation amendment.417 This decision was not approved by the president V!)e-Freiberga who sent the law back to the parliament.418 In Oc- tober 2006 the sexual orientation provision was finally adopted.419

Civil society Mozaika is the only NGO in Latvia dealing with LGBT issues. It was established in 2006 as a reaction to the first Riga Gay pride of 2005, which led to a lot of violence in the city, due to the presence of numerous anti-LGBT activists. Before 2005, LGBT issues were considered a taboo in Latvia.420 In recent years, LGBT issues have slowly come to the surface and are being reported by the media.421 Mozaika is the only organisation in this field and has organised the Baltic Pride, lobby campaigns for LGBT-friendly legislation and the training of police officers on dealing with hate crimes. Finally, Mozaika organises sport and cultural activities and communicates with the youth through a portal on the internet.422

5.10.4 Prisoners’ rights In 1991 Latvia inherited a prison system that had been an integral part of the Soviet prison system. This system was characterised by large capacity penal colonies with a cheap prison labour force, substandard sanitary conditions, dilapidated prisons’ infrastructure, overcrowd- ing in pre-trial detention facilities and a heavily militarised system closed to public scruti- ny.423 Latvia, aiming to become a member of both the Council of Europe and the European Union, was confronted by two main challenges after independence. Firstly, Latvia had to introduce different policy initiatives and legislative changes aimed at improving the conditions of prisons and detention facilities, in order to meet the relevant international human rights standards.424 Secondly, Latvia had to abolish Soviet criminal law by introducing alternatives to custody, guaranteeing detainees a fair trial and other basic rights as laid down in the Con- vention on Human Rights. The following sections present an analysis of the way Latvia confronted these challenges and of the present situation in order to assess to what extent prisoners’ rights are observed by the Latvian state.

417 Ibid., p. 226. 418 ILGA Europe, ‘Amnesty International statement on Latvian Labour Law amendments’, retrieved from: http://www.ilga- eu- rope.org/home/guide/country_by_country/latvia/amnesty_international_statement_on_latvian_labour_law_amen dments, consulted on 11 June 2012. 419 C. O’ Dwyer, K. Schwartz, ‘Minority rights after enlargement: A comparison of anti-gay politics in Poland and Latvia, Comparative European Politics, nr. 2, 2010, p. 241 (footnote 5). 420 Interview R28. 421 Ibid. 422 Interview R28. 423 A. Kamenska, ‘Independent detention monitoring in Latvia’, retrieved from http://www.humanrights.org.lv/html/news/publications/29006.html, consulted on 15 May 2012, p. 12. 424 Ibid., p. 8. LATVIA AND THE EUROPEAN UNION 145

Prohibition of torture and inhuman and degrading treatment The first serious prison reform efforts date back to 1994, the year in which Latvia entered a multilateral cooperation with the Nordic countries aimed at reforming the prison systems in the Baltic states.425 One of the first moves was the replacement of large capacity dormitories, which accommodated 50 to 80 prisoners, with prison cells accommodating 2 to 18 prisoners.426 Throughout the years, different international institutions such as the Council of Europe, the UN and the EU have made visits to prisons in Latvia. ‘The situation in prisons continues to be reported as critical in terms of health and sanitary conditions’. These are the words of the European Commission on the conditions of Latvian prisons upon EU accession.427 Less mild are the words of other commentators such as Ritter who, in 2004, talked about ‘some of dreariest examples of where the Baltic states fall short of the EU norms, […] the legacy of prisons operated more as labour camps, or gulags, lives on in Estonia, Latvia and Lithua- nia’.428 In 2001, the Head of the Latvian Prison Administration reported that only about half of all prisoners lived under the conditions as required by international instruments and to respect human dignity.429 The poor health situation in prisons also raised serious public health concerns. During the second half of the 1990s, the prison system was plagued by tuberculosis.430 Moreover, budgetary allocations for prison health care remained low throughout the years, and prison medical services were said to be receiving only 10 to 20 % of the necessary funding.431 Although the conditions have improved in a considerable number of facilities, they remain poor and still do not meet international standards.432 Evidence can be found in recent rulings of the European Court of Human Rights, such as in the cases Bazjaks v. Latvia and Meln!tis v. Latvia. In both cases the Court found that Latvia had violated article 3 (prohibition of inhuman and degrading treatment) because of the conditions of detention in the prisons of Daugavpils and Valmiera.433 More evidence is to be found in complaints submitted by prisoners to the Latvian Ombudsman. In 2010, 67 prisoners addressed the Ombudsman, most of the

425 Ibid., p. 13. 426 Ibid., p. 13. 427 European Commission, ‘2002 Regular report on Latvia’s progress towards accession’, COM (2002) 700 final, p. 28. 428 A. Kamenska, ‘Independent detention monitoring in Latvia, retrieved from http://www.humanrights.org.lv/html/news/publications/29006.html, consulted on 15 May 2012, p. 12. 429 M. Mits, European Convention on Human rights in Latvia: Impact on Legal Doctrine and Application of Legal Norms, Lund: Media Tryck 2010, p. 98. 430 A. Kamenska, ‘Independent detention monitoring in Latvia’, retrieved from http://www.humanrights.org.lv/html/news/publications/29006.htm, consulted on 15 May 2012, p. 14. 431 Ibid., p. 14. 432 US department of State, ‘2010 Human rights report: Latvia’, retrieved from http://www.state.gov/j/drl/rls/hrrpt/2010/eur/154433.htm, consulted on 15 May 2012. 433 European Court of Human rights, Bazjaks v. Latvia, retrieved from http://sim.law.uu.nl/sim/caselaw/Hof.nsf/2422ec00f1ace923c1256681002b47f1/7d8a4366c9bbe538c12577c100 425d20?OpenDocument, consulted on 10 March 2012; European Court of Human rights, Meln!tis v. Latvia, retrieved from http://cmiskp.echr.coe.int/tkp197/viewhbkm.asp?sessionId=87393613&skin=hudoc- en&action=html&table=F69A27FD8FB86142BF01C1166DEA398649&key=96742&highlight=, consulted on 10 March 2012. 146 LAW

complaints were about the lack of ventilation and daylight in cells.434

Deprivation of liberty and fair trial On 1 April 1999 the Criminal Law entered into force, thereby replacing the old Latvian Crim- inal Code of 1961. While it provided for new alternatives to custody, such as community service and more frequent levying of fines, it also lowered the age of criminal responsibility to 14 for all crimes, and increased harsher prison terms for most crimes.435 Together with the Criminal Law, the Criminal Procedure Law was also amended several times in the 1990s in order to meet international human rights standards. One of the biggest changes was the introduction of a three-tier court system in 1994, since appeal procedures were not known in Sovi- et times.436 Despite these changes, the Criminal Procedure Law still reflected the spirit of the Soviet criminal law and failed to stand a test posed by the European Court of Human Rights in the case A. Latvens v. Latvia.437 Aleksandrs Latvens was the chairman of the supervisory board of Latvia’s largest bank in the mid-90s. He was imprisoned in 1995, on the suspicion of having committed crimes connected to banking and economic activities. In 1997, the Riga Regional Court started to consider his case and in 2001 he was sentenced to nine years in prison.438 Firstly, Latvens complained about the length of his detention before the sentence, which was four years and six months. The European Court of Human Rights found the continued detention unlawful, as it was not sufficiently motivated by the Riga Regional Court.439 Secondly, the applicant complained that his trial did not take place within a reasonable time. In this case too, the Court found a violation of the Convention, as the proceedings were stopped for a period of eleven months.440 Thirdly, Latvens complained about the fact that one of the judges had made public statements in which she held the accused person guilty before the sentence was made. The Court found this a breach of the principle of impartiality of the Court as well as the principle of presumption of innocence.441 Finally, the applicant complained about the censorship of his correspondence as well as the prohibition to meet with his family members. As far as the former is concerned, the Court found that the Latvian Criminal Procedure Law did not provide either for the length or the grounds that would justify the censorship of correspondence and

434 Latvijas Republika ties!bsarga, ‘2010. gada p#rskats’, retrieved from, http://www.tiesibsargs.lv/lat/publikacijas/gada_zinojumi/ , consulted on 23 May 2012, p. 26. 435A. Kamenska, ‘Independent detention monitoring in Latvia’, retrieved from http://www.humanrights.org.lv/html/news/publications/29006.html, consulted on 15 May 2012, p. 13. 436 A. van Kalmhour eds, An Analysis of Minimum Standards in Pre-trial Detention and the Grounds for Regular Review in the Member States of the EU, Nijmegen: Wolf Legal Publishers 2009, p. 560. 437 M. Mits, European Convention on Human rights in Latvia: Impact on Legal Doctrine and Application of Legal Norms, Lund: Media Tryck 2010, p. 109. 438 Ibid., p. 103. 439 Ibid., p. 103. 440 Ibid., p. 104. 441 Ibid., p. 104-105. LATVIA AND THE EUROPEAN UNION 147 thus the interference with the rights was not ‘in accordance with the law’.442 With regard to the latter, the Court found that the stringent measures were not proportionate.443 Due to the violation of the fair trial guarantees, the trial of the applicant in domestic courts was started all over again.444 In order to comply with the ruling, a new Criminal Procedure Law came into force on 1 October 2005 and provided for a stricter procedure stage.445 For instance, the new Law provides detailed guidance concerning the proportionality considerations and reasons for placing a person in detention on remand.446 The new provisions immediately affected the number of pre-trial detainees, which decreased from 34.8 % in 2005 to 26.5 % in early June 2006.447 Furthermore, the Law stipulates that judges need to step down if they have a ‘personal interest’ in the outcome of the case.448 Moreover, the Law states that the control of correspondence can only be carried out on the basis of a decision of the investigating judge and that the extent of the control must be determined individually, taking into account the opinion of the prosecutor and the detained person, the character of the offence as well as the reasons for detention on remand.449 Finally, whereas the old regulation provided for the right of a maximum number of visits by relatives, the new regulation stipulates a minimum number of visits.450 To conclude, it can be said that, as a result of the introduction of a new Criminal Procedure Code, Latvia complies with international human rights standards and consequently also with EU standards.

5.11 Women’s rights and situation

5.11.1 Position of women during the transition The transition from the Soviet communist regime to democracy in the early 1990s was a difficult process in Latvia, and had various (negative) implications for the Latvian women.451 Firstly, during the Soviet regime it was very common for both men and women to be economically active. Yet, after Latvia’s independence the notion of women taking care of children

442 Ibid., p. 105. 443 Ibid., p. 105. 444 Ibid., p. 106. 445A. Kamenska, ‘Independent detention monitoring in Latvia’, retrieved from http://www.humanrights.org.lv/html/news/publications/29006.html, consulted on 15 May 2012, p. 14. 446 M. Mits, European Convention on Human rights in Latvia: Impact on Legal Doctrine and Application of Legal Norms, Lund: Media Tryck 2010, p. 108. 447 A. Kamenska, ‘Independent detention monitoring in Latvia’, retrieved from http://www.humanrights.org.lv/html/news/publications/29006.html, consulted on 15 May 2012, p. 14. 448 M. Mits, European Convention on Human rights in Latvia: Impact on Legal Doctrine and Application of Legal Norms, Lund: Media Tryck 2010, p. 107. 449 Ibid., p. 108. 450 Ibid., p. 109. 451 D. Stukuls, ‘Body of the Nation: Mothering, Prostitution, and Women’s Place in Postcommunist Latvia’, Slavic Review, no. 3 (1999), p. 538 and pp. 549-550. 148 LAW

and not participating in the labour market revived.452 This traditional role of women in society revived due to the drastic decrease of ethnic Latvians in Latvia, which made the ethnic Latvi- an citizens almost a minority.453 Also, it has been suggested that this revival stemmed from the multiple burden women had during the Soviet regime as they were expected to work, look after their children and take care of their husband, without making time for themselves.454 As a result, women were so overwhelmed by these burdens that, after the dissolution of the Sovi- et Union, they decided to retract from the labour market.455 Additionally, the new post-communist laws and policies stimulated this traditional role of women in society even more, as financial benefits were made available to parents in return for childbearing: new laws were established as regards ‘childcare benefits’ and ‘a birth grant’ for parents.456 Also, many kindergartens were dissolved due to the fact that children were being taken care of by their mothers. Thus, Latvian women slowly became more ‘isolated and mar- ginalised’ in society.457 However, one has to take into account that this is solely one expert opinion and that the situation might be more nuanced in practice. Secondly, there was and is a large inequity as regards the salaries of men and women in post-communist Latvia. In 1999 it was estimated that ‘overall women earn 78 % of the male wage and, in the public sector, where women outnumber men, they earn just 73 % of the male wage.’458 Thirdly, Latvia’s transition had a negative impact on the situation of Latvian women in terms of prostitution: approximately 4 000 to 10 000 Latvian women were working in prostitution at that time in Riga. Of these figures, roughly 10-19% were under aged: the youngest Latvian girl working in prostitution was only 8 years old.459 The main reason for women’s participation in prostitution was the poverty caused by the country’s switch to a ‘market economy’.460 Furthermore, the growing problem of prostitution was also caused by the relatively small number of police forces working on such cases and the fact that prostitution had an unclear legal status after the Soviet regime. During the Soviet regime prostitution was officially a criminal act, while after Latvia’s independence this legislation was eradicated and prostitution became semi-legal with minimal regulations.461

452 Ibid., pp. 549-550; interview R16. 453 D. Stukuls, ‘Body of the Nation: Mothering, Prostitution, and Women’s Place in Postcommunist Latvia’, Slavic Review, no. 3 (1999), p. 540. 454 Interview R16. 455 Ibid. 456 D. Stukuls, ‘Body of the Nation: Mothering, Prostitution, and Women’s Place in Postcommunist Latvia’, Slavic Review, no. 3 (1999), pp. 543-544. 457 Interview R16. 458 D. Stukuls, ‘Body of the Nation: Mothering, Prostitution, and Women’s Place in Postcommunist Latvia’, Slavic Review, no. 3 (1999), p. 546. 459 Ibid., p. 550. 460 Ibid., pp. 551-552. 461 Ibid., pp. 552-553. LATVIA AND THE EUROPEAN UNION 149

5.11.2 Position of women at present According to Latvia’s legal system, women and men have equal rights in Latvia. The legal framework with regard to gender equality is very clearly phrased in Article 91 of Latvia’s constitution, which states that: ‘[a]ll human beings in Latvia shall be equal before the law and courts. Human rights shall be secured without discrimination of any kind.’462 As a result, it is illegal for employers to discriminate on the basis of an employee’s gender, for example. Yet in practice such discrimination does occur against women.463 According to a Latvian NGO, wage inequality is still present in Latvia. The NGO states that salaries of women are approximately 15 % lower than the salaries of men.464 Moreover, sexual intimidation occurs at work although the Latvian legislation prohibits this form of intimidation.465 In addition, Latvian women are underrepresented in high-ranking positions. ‘In general, women constitute 30 - 40 % of the members of Latvian political parties’,466 yet this engagement does not entail high-ranking positions in every case. For instance, approximately 20 % of the members of the Latvian parliament are female members. Furthermore, Latvian women generally do not fulfil high-ranking posts linked to financial affairs. One well-known exception to the aforementioned underrepresentation of women in high positions is the election of Vaira V!)e-Freiberga as the first Latvian female president in 1999.467 However, one expert in the field has suggested that Latvia’s legislation concerning labour is ‘female-friendly’ and that currently the unemployment rate is even higher among men than women, partly due to the fact that a larger proportion of women than men obtain their university degrees.468 The position of women on the Latvian labour market is discussed in more detail on page 264.

5.11.3 Current problematic issues The situation as regards women’s rights and the situation of women in general as described above must be complemented with a few other problematic issues prevalent in Latvian society today. One of the problematic matters is the presence of the so-called ‘gender stereotyping’. Another problematic issue that seems to prevail as regards Latvian women is prostitution. Various sources have estimated that the number of prostitutes in Latvia is between 10 000 and 15 000. Roughly 15 % of these prostitutes is underage. Prostitution is officially permitted in

462 Saeima website, ‘The Constitution of the Republic of Latvia’, retrieved from: http://www.saeima.lv/en/legislation/constitution, consulted on 29 March 2012. 463 US Department of State website, ‘Latvia’, retrieved from: http://www.state.gov/j/drl/rls/hrrpt/2007/100567.htm, consulted on 29 March 2012. 464 K. McIntosh, ‘Latvia's human trade in misery’, retrieved from: http://www.baltictimes.com/news/articles/22865/, consulted on 29 March 2012. 465 US Department of State website, ‘Latvia’, retrieved from: http://www.state.gov/j/drl/rls/hrrpt/2007/100567.htm, consulted on 1 April 2012. 466 Stop Violence against Women website, ‘Latvia’, retrieved from: http://www.stopvaw.org/latvia.html, consulted on 11 June 2012. 467 Ibid. 468 Interview R14. 150 LAW

Latvia and this act is organised through the Regulations on the Restriction of Prostitution.469 However, Latvia’s Criminal Law prohibits forced prostitution and exploitation of prostitutes to gain financial benefits in articles 164 and 165 of the Criminal Law. Article 165 states that ‘taking advantage, for purposes of enrichment, of a person who is engaged in prostitution’470 is against the law.471 In general, prostitution is increasingly common in Latvia as well as the phenomenon of ‘sex tourism’.472

5.11.4 Legal gaps Women’s rights and gender equality are already extensively addressed in Latvia through legislation and international projects. However, several legal gaps in Latvia’s legislation remain that might negatively affect the situation of women in Latvia. Firstly, Latvia’s Criminal Law addresses rape and ‘sexual assault’ as criminal acts in article 159 and 160 of the Criminal Law.473 Nevertheless, the concept of ‘spousal rape’, which essentially entails that the husband of the victim forces the victim to perform involuntary sexual activities with him, is not addressed in Latvian law. Furthermore, a Latvian NGO called ‘Skalbes Crisis Center’ has referred to the current Latvian laws concerning rape as ‘ineffective’.474 This NGO has also stated that sexual crimes such as (spousal) rape are often not reported because of the negative attitude of the police towards victims, as they tend to hold the victim responsible for the occurrence of rape.475 Secondly, certain regulations as regards stalking need to be included in the legislation; for instance, a provision to prohibit an aggressive person to come near their victim and possibly the victim’s children. Moreover, the law currently states that victims of violence should search other housing alternatives if they leave their partners. However, ideally, the offender should be the one who searches for alternative living space, while the victim is allowed to stay in their common home and is given a minimum of a month to find other living space.476 Thirdly, Latvia’s legislation lacks a provision that punishes ‘sex buyers’: persons who acquire sexual services in exchange for money. Such legislation is already in place in Iceland or Sweden for example, and is desirable in Latvia as well. Currently, a working group has been established in which several non-governmental organisations and the authorities are in-

469 Stop Violence against Women website, ‘Latvia’, retrieved from: http://www.stopvaw.org/latvia.html, consulted on 1 April 2012. 470 Corruption Prevention and Combating Bureau, ‘The Criminal Law’, 2011, p. 57, retrieved from: http://www.knab.gov.lv/uploads/eng/the_criminal_law.pdf. 471 Ibid. 472 Stop Violence against Women website, ‘Latvia’, retrieved from: http://www.stopvaw.org/latvia.html, consulted on 1 April 2012. 473 Corruption Prevention and Combating Bureau, ‘The Criminal Law’, 2011, p. 55, retrieved from: http://www.knab.gov.lv/uploads/eng/the_criminal_law.pdf. 474 US Department of State website, ‘Latvia’, retrieved from: http://www.state.gov/j/drl/rls/hrrpt/2007/100567.htm, consulted on 30 March 2012. 475 Ibid. 476 Interview R16. LATVIA AND THE EUROPEAN UNION 151 volved to work on proper methods to address human trafficking and prostitution.477 Finally, there is no clear definition of ‘family’ in Latvian legislation. For instance, more and more people have so-called ‘non-registered relationships’ and have children with their partners;478 i.e. they have established a family. Yet, in many cases women in such relationships are left with nothing if, for example, their partner decides to end the relationship. There- fore, to ensure that such victims are protected in Latvian legislation, the definition of family needs to entail not only people who are officially married and have children, but also partners who have children while in non-registered relationships, so that these partners are entitled to the same rights as married couples are. Currently, NGO Marta is actively lobbying to solve the majority of the aforementioned legal gaps.479

5.11.5 Human trafficking Latvian women are affected by human trafficking. Two forms of trafficking are particularly frequent in Latvia: trafficking for sexual exploitation and for forced employment. The first category of trafficking predominately affects Latvian women. The trafficking in persons report of 2011 showed that Latvian woman are sexually exploited in various European countries, such as the Netherlands, Spain, Italy and Greece.480 In addition, both women and men were the victims of forced labour in 2011,481 among others in the United Kingdom, Sweden, Ireland, and Germany. It has been suggested that trafficking for forced labour should receive more attention from the authorities, because it is very hard to discover and consequently prove such acts, especially since Latvia is a ‘source country’ and this type of mistreatment therefore mostly occurs outside Latvia’s borders.482 Another form of trafficking which has become increasingly popular in Latvia are paid false marriages. Women from Latvia often conclude such marriages with non-EU citizens in Ireland, so that these non-EU citizens obtain visas or residence permits.483 Essentially, Latvian legislation forbids human trafficking of any kind, yet in reality this does occur. According to articles 154 and 165 of the Latvian Criminal Law, human trafficking is a punishable act. More specifically, human trafficking is defined in article 154 (2) of Lat- via’s Criminal Law.484 Furthermore, article 165 (1) states that ‘sending a person for sexual exploitation’ to a (foreign) location (even with a victim’s initial approval) is a punishable act

477 Ibid. 478 Ibid. 479 Interview R16. 480 US Department of State website, ‘Trafficking in Persons Report 2011: Country Narratives: J-M’, 2011, p. 225, retrieved from: http://www.state.gov/documents/organization/164455.pdf 481 Ibid. 482 Interview R26. 483 Ibid. 484 Corruption Prevention and Combating Bureau, ‘The Criminal Law’, 2011, p. 54, retrieved from: http://www.knab.gov.lv/uploads/eng/the_criminal_law.pdf. 152 LAW

as well.485 It is uncertain what the exact number of persons is that becomes the victim of some form of trafficking. However, some estimates from NGOs indicate that the number lies at multiple hundreds of victims annually.486 The group that is most frequently affected by trafficking are ‘persons from unstable families and unemployed or marginally employed women from 17 - 25 years old with poor education and from economically underdeveloped areas.’487

Current problematic issues It has been suggested that one of the problematic matters related to human trafficking is the fact that it is being denied by a part of the police forces in Latvia. Supposedly, the possible reasons for this denial are the general weakness of the police, their possible involvement in corruption practices, and even their possible involvement in trafficking practices.488 However, another expert in the field suggested the opposite and stated that the Latvian police forces address human trafficking as a priority. The police forces have even established a unit which is specially focused on ‘combating human trafficking’.489 Another problematic matter is the poorly arranged ‘support structure’ for those Latvian women who want to end their involvement in such exploitation acts.490 The victims of trafficking who actually do end their involvement and are relocated back to Latvia still face two challenges.491 Firstly, victims have to reintegrate into society, but this is only possible when a person is not constantly confronted with their past through, among others, on-going court cases. Secondly, victims receive assistance for a relatively short period (six months) and in the period thereafter – if the victim is left without assistance and employment – there is a genuine possibility that the person will become a victim of human trafficking again.492

Internal Latvian anti-trafficking initiatives To counter the human trafficking problem in Latvia, the government has focused on providing rehabilitation support to victims of trafficking; improving the methods to recognise victims; and developing certain policies and programs in this area.493 For instance, the government is

485 Ibid., p. 57. 486 US Department of State website, ‘Latvia’, retrieved from: http://www.state.gov/j/drl/rls/hrrpt/2007/100567.htm, consulted on 3 April 2012. 487 US Department of State website, ‘2008 Human Rights Report: Latvia’, retrieved from: http://www.state.gov/j/drl/rls/hrrpt/2008/eur/119087.htm, consulted on 3 April 2012. 488 Interview R16. 489 Interview R26. 490 Interview R16. 491 Interview R26. 492 Ibid. 493 European Commission website, ‘Fight against Trafficking in Human Beings: Latvia’, retrieved from: http://ec.europa.eu/anti- traffick- ing/showNIPsection.action;jsessionid=d8DPNnkVxmmvpVtmWrprNTZ1199TM7Tp4GbF1LRdr9np5C3Wl6qj! 855818409?sectionId=fe720ba0-a092-4302-83cc-4a50b116dda0, consulted on 4 April 2012. LATVIA AND THE EUROPEAN UNION 153 currently implementing a ‘National Anti-Trafficking Programme’ for the period from 2009 until 2013. ‘The aim of the Programme is to plan and implement activities to prevent human trafficking and to provide victims with qualified social rehabilitation.’494 The Latvian government also focuses on providing support to victims once it has been established that they are victims of trafficking. Latvia’s Ministry of Welfare has made around 70 000 dollars (approximately 55 800 euro) available in 2010 for special facilities such as shelter, judicial or medical aid for victims (predominantly women). This figure is slightly lower than in 2009, when 78 000 dollars (approximately 62 180 euro) were made available for such victim facilities.495 In addition, NGOs such as Marta Resource Centre also provide support to victims of trafficking.496 Marta Resource Centre is one of the two Latvian NGOs for women’s rights that, since its establishment in 2000, have provided help to victims of human trafficking both legally and psychologically.497 Moreover, Marta focuses on lobbying through which they attempt to achieve legislative alterations. For instance, through their lobbying activities Marta succeeded in including a definition of domestic violence in the Latvian Criminal Law, which was lacking until 2010.498 Moreover, an anti-trafficking police unit has been established, consisting of almost 20 police officers who are specially appointed to investigate and work on this matter.499 The increasing state effort in this field has also led to a rising number of examinations into trafficking, and increasingly more offenders are brought to trial.500 Additionally, government officials are receiving trainings in this field to be able to, among others, identify victims of trafficking better.501 Also, various campaigns are held in schools to enhance knowledge and alertness with regard to trafficking. These campaigns are focused on providing information about the different types of trafficking and informing the students on how to keep away from such activities.502 Finally, the Latvian authorities have given special attention to the deterrence of traffick-

494 Ibid. 495 US Department of State website, ‘Trafficking in Persons Report 2011: Country Narratives: J-M’, 2011, p. 226, retrieved from: http://www.state.gov/documents/organization/164455.pdf. 496 European Commission website, ‘Fight against Trafficking in Human Beings: Latvia’, retrieved from: http://ec.europa.eu/anti- traffick- ing/showNIPsection.action;jsessionid=d8DPNnkVxmmvpVtmWrprNTZ1199TM7Tp4GbF1LRdr9np5C3Wl6qj! 855818409?sectionId=fe720ba0-a092-4302-83cc-4a50b116dda0, consulted on 4 April 2012. 497 Interview R16; interview R26. 498 Interview R16. 499 Interview R26. 500 US Department of State website, ‘Trafficking in Persons Report 2011: Country Narratives: J-M’, 2011, p. 226, retrieved from: http://www.state.gov/documents/organization/164455.pdf. 501 European Commission website, ‘Fight against Trafficking in Human Beings: Latvia’, retrieved from: http://ec.europa.eu/anti- traffick- ing/showNIPsection.action;jsessionid=d8DPNnkVxmmvpVtmWrprNTZ1199TM7Tp4GbF1LRdr9np5C3Wl6qj! 855818409?sectionId=fe720ba0-a092-4302-83cc-4a50b116dda0, consulted on 4 April 2012. 502 Ibid.; interview R26. 154 LAW

ing by establishing the so-called ‘working group on trafficking in persons’ in 2010. This working group aims ‘to improve the Latvian government’s labour trafficking response, to develop victim identification criteria for labor trafficking, and to enhance intra-governmental communication on labor trafficking’.503

NGO vision on the government’s activities to counter trafficking The efforts of the government to counter trafficking are received both positively and negatively by NGOs. For instance, Marta Resource Centre is particularly critical of the government’s activities to counter trafficking and has stated that ‘a lack of political will to meaning- fully address issues of human trafficking, coupled with the country’s debilitating economic problems and soaring unemployment levels ensured Latvia’s women would continue to remain at risk.’504 Moreover, the NGO has severe doubts concerning the actions undertaken by the government and its institutions, among others because the bureaucracy impedes the victims from receiving urgent assistance from the government.505 In addition, the NGO also criticises the government as regards the national action plan for anti-trafficking for the period between 2009 and 2013, among others because the government did not elaborate on the financial aspects to actually put the necessary changes into practice.506 However, another expert in the field has stated that the Latvian authorities are addressing human trafficking as a priority and provide effective assistance to the victims in their rehabilitation process.507 Also, the police forces seem to address human trafficking as a priority, which is apparent through the special anti-trafficking police unit that has been established in Latvia.508 Two points of criticism that this expert has expressed is the lack of action from the government to prevent human trafficking and insufficient budgetary means to accomplish and implement certain initiatives.509

EU and international anti-trafficking legislation and cooperation To address the trafficking problem on a broader level, Latvia cooperates in several international and European initiatives. Since 2004, Latvia is one of the signatories to the United Na- tions Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing the United Nations Convention against Transnational Organised Crime.510 Four years later, in 2008, Latvia adopted the law on the Council of Europe Conven-

503 US Department of State website, ‘Trafficking in Persons Report 2011: Country Narratives: J-M’, 2011, pp. 226-227, retrieved from: http://www.state.gov/documents/organization/164455.pdf. 504 K. McIntosh, ‘Latvia's human trade in misery’, retrieved from: http://www.baltictimes.com/news/articles/22865/, consulted on 6 April 2012. 505 Ibid. 506 Ibid. 507 Interview R26. 508 Ibid. 509 Ibid. 510 Ministry of Foreign Affairs website, ‘Protocol to Prevent, Suppress and Punish trafficking in Persons, especially Women and Children, supplementing the United Nations Convention against Transnational Organized LATVIA AND THE EUROPEAN UNION 155 tion on Action against Trafficking in Human Beings.511 Moreover, Latvia is currently participating in a project to address trafficking regionally and provide assistance to victims in the Baltic states, the Nordic countries and Russia.512 In 2002, a similar campaign was organised to specifically address the trafficking of women.513 In addition, the Latvian law enforcement associations cooperate with various EU Member States and non-EU members as regards human trafficking matters, through sharing information and assisting in certain investigations. The police forces in Latvia also cooperate with Europol and Interpol.514 Latvia is currently implementing an EU Directive ‘on preventing and combating trafficking in human beings and protecting its victims’.515 To be able to do this properly, the Latvian Ministry of Justice has created a ‘working group’ to investigate what alterations will need to be made in Latvian legislation so that the legislation is in line with the aforementioned Di- rective.516 Finally, according to the United States Department of State, Latvia is placed on tier 2,517 which indicates that the country is semi-compliant to the United States ‘Trafficking Victims Protection Act’.518

Future perspective regarding human trafficking Overall, human trafficking is one of the most frequently mentioned problematic matters as regards women in Latvia. It has been suggested that membership of the European Union (and therefore the absence of border controls) in addition to the current financial crisis has increased and might even further increase the number of victims of human trafficking.519 At present, travelling across Europe is easier520 and the economic hardship in Latvia might lead

Crime’, retrieved from: http://www.minbuza.nl/en/key-topics/treaties/search-the-treaty- database/2000/11/009349.html, consulted on 5 April 2012. 511 Council of Europe website, ‘Council of Europe Convention on Action against Trafficking in Human Beings: Latvia’, retrieved from: http://www.coe.int/t/dghl/monitoring/trafficking/docs/Profiles/LATVIAProfile_en.asp, consulted on 5 April 2012. 512 Norden website, ‘About the fight against Trafficking’, retrieved from: http://www.norden.org/en/about- nordic-co-operation/areas-of-co-operation/trafficking-in-human-beings/about-the-fight-against-trafficking, consulted on 5 April 2012. 513 Norden website, ‘Nordic-Baltic Campaign Against Trafficking in Women’, retrieved from: http://www.norden.org/en/publications/publikationer/2004-715, consulted on 5 April 2012. 514 European Commission website, ‘Fight against Trafficking in Human Beings: Latvia’, retrieved from: http://ec.europa.eu/anti- traffick- ing/showNIPsection.action;jsessionid=d8DPNnkVxmmvpVtmWrprNTZ1199TM7Tp4GbF1LRdr9np5C3Wl6qj! 855818409?sectionId=fe720ba0-a092-4302-83cc-4a50b116dda0, consulted on 6 April 2012. 515 Ibid. 516 Ibid. 517 US Department of State website, ‘Trafficking in Persons Report 2011: Country Narratives: J-M’, 2011, p. 225, retrieved from: http://www.state.gov/documents/organization/164455.pdf. 518 US Department of State website, ‘Tiers: Placement, Guide, and Penalties for Tier 3 Countries’, retrieved from: http://www.state.gov/j/tip/rls/tiprpt/2011/164221.htm, consulted on 3 April 2012. 519 Interview R26. 520 Stop Violence against Women website, ‘Latvia’, retrieved from: http://www.stopvaw.org/latvia.html, con- 156 LAW

to increasing participation in such practices.521 Additionally, the financial crisis seems to already have aggravated the situation for women, as there has been an increase in prostitution in Latvia and artificial marriages in recent times.522 On the one hand, the aforementioned tendencies may be an indication of increased human trafficking in Latvia in the future, either for sexual exploitation or forced employment. On the other hand, the various activities of the authorities and the NGOs in this field might lead to a decrease of human trafficking in the future.523

5.12 Organised crime

After Latvia’s independence, organised crime was particularly linked to Russian crime groups.524 The main activity of these Russian crime groups in Latvia was the smuggling of precious metals through Estonia to the west.525 In the 1990s, a gradual change took place to organised crime in areas such as banking and laundering money.526 Narcotics transfer became an issue mainly during the 1990s as a consequence of the inability to use the ‘Balkan route’ because of the war.527 Narcotics transfer is still a problem today, partly because of ineffective cooperation between the Ministry of Finance and the Ministry of the Interior, which are responsible for border control.528 An illicit drug culture exists today, as well as operations in credit card fraud, bank card fraud, extortion and groups active in prostitution.529 Prostitutes may also become involved in money laundering, narcotic sales and document counterfeit- ing.530 No known indigenous terrorist organisations are present in Latvia, and its international terrorism threat is consistent with the rest of the European Union.531

sulted on 6 April 2012. 521 Interview R26. 522 European Commission website, ‘Fight against Trafficking in Human Beings: Latvia’, retrieved from: http://ec.europa.eu/anti- traffick- ing/showNIPsection.action;jsessionid=d8DPNnkVxmmvpVtmWrprNTZ1199TM7Tp4GbF1LRdr9np5C3Wl6qj! 855818409?sectionId=fe720ba0-a092-4302-83cc-4a50b116dda0, consulted on 6 April 2012. 523 Interview R16. 524 L. Berry, et al, The Library of Congress, ‘Nations Hospitable to Organized Crime and Terrorism’, October 2003,p. 49, retrieved from: http://www.loc.gov/rr/frd/pdf-files/Nats_Hospitable.pdf, consulted on 10 April 2012. 525 Ibid., p. 50. 526 Ibid., p. 50. 527 Ibid., pp. 51-52. 528 Ibid., p. 52; United States Department of State, Bureau of Diplomatic Security, ‘Latvia 2011 Crime and Safe- ty Report’, 8 March 2011, retrieved from: https://www.osac.gov/Pages/ContentReportPDF.aspx?cid=10586, consulted on 10 April 2012. 529 United States Department of State, Bureau of Diplomatic Security, ‘Latvia 2011 Crime and Safety Report’, 8 March 2011, p. 1, retrieved from: https://www.osac.gov/Pages/ContentReportPDF.aspx?cid=10586, consulted on 10 April 2012. 530 L. Berry e.a., 'Nations Hospitable to Organized Crime and Terrorism', October 2003, p. 52, retrieved from:http://www.loc.gov/rr/frd/pdf-files/Nats_Hospitable.pdf, consulted on 10 April 2012. 531 United States Department of State, Bureau of Diplomatic Security, ‘Latvia 2011 Crime and Safety Report’, 8 March 2011, p. 2, retrieved from: https://www.osac.gov/Pages/ContentReportPDF.aspx?cid=10586, consulted on 10 April 2012. LATVIA AND THE EUROPEAN UNION 157

It has been reported in 2010 that as a result of the global financial crisis, organised crime has been expanding.532 Criminal activities include cybercrime, fraud, corruption and tax avoidance.533 Transnational organised crime also became a bigger issue in 2010, with drugs transport crimes to Russia, and narcotics transport crimes to western Europe.534 The European Commission has published a Strategy for the Baltic Sea Region, which stresses a view to ‘promote and support the development of regional approaches and cooperation to combat organised crime, particularly in border areas’.535

5.13 Law enforcement services

Most law enforcement services are the responsibility of the Ministry of Interior, while the local government is in charge of the municipal police.536 The Latvian state police (Valsts policija) consists of one central service and 5 subordinated regional police units.537It has undergone several reorganisations in order to improve the fight against organised crime.538 There is also a security police, which performs tasks for national security, and fights organised and economic crime, terrorism, corruption, the counterfeit of money and the illegal distribution of narcotics, firearms and other types of weapons and explosives.539 The criminal police is concerned with crime prevention and resolving of criminal offences.540 The financial police department has authority in the field of state revenue, and its main priorities are tax- fraud, money laundering and organised crime.541 The department of criminal investigation has been reorganised in order to improve the fight against organised crime, including a new definition of organised crime and stricter penalties.542 The customs criminal board investigates

532 A. Vilks, ‘Latvian Organized Crime Invests in Politics’, Institute for Security & Development Policy, Policy Brief, No. 46, December 1, 2010, p. 1, retrieved from: http://www.isdp.eu/images/stories/isdp-main- pdf/2010_vilks_latvian-organized%20crime.pdf, consulted on 10 April 2012. 533 Ibid., p. 2. 534 Ibid., p. 2. 535 European Commission, ‘Commission Staff Working Document accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions concerning the European Union Strategy for the Baltic Sea Region – Action Plan’, Brussels, 10.6.2009, SEC(2009) 712, p. 66. 536 Interpol, ‘Latvia: Law enforcement in Latvia’, retrieved from: http://www.interpol.int/Member- countries/Europe/Latvia, consulted on 11 June 2012. 537 Europol, ‘Latvia’, retrieved from: https://www.europol.europa.eu/content/memberpage/latvia-775, consulted on 18 March 2012. 538 A. Vilks, ‘Latvian Organized Crime Invests in Politics’, Institute for Security & Development Policy, Policy Brief, No. 46, December 1, 2010, p. 2, retrieved from: http://www.isdp.eu/images/stories/isdp-main- pdf/2010_vilks_latvian-organized%20crime.pdf, consulted on 10 April 2012. 539 Europol, ‘Latvia’, retrieved from: https://www.europol.europa.eu/content/memberpage/latvia-775, consulted on 18 March 2012. 540 A. Kamenska and I. Brands-Kehris, ‘Combating Hate Crimes in Latvia: Legislation and Police Practice’, Latvian Centre for Human Rights: 2008, p. 20, retrieved from: http://www.humanrights.org.lv/upload_file/Naida_noziegums_ENG_Internetam.pdf, consulted on 10 April 2012. 541 Europol, ‘Latvia’, retrieved from: https://www.europol.europa.eu/content/memberpage/latvia-775, consulted on 18 March 2012. 542 A. Vilks, ‘Latvian Organized Crime Invests in Politics’, Institute for Security & Development Policy, Policy 158 LAW

smuggling cases, performs custom control activities and manages custom information.543 The state border guard has one headquarter and nine territorial departments, and its main tasks are to protect the border and to ensure conditions for residence within the state are observed.544 Latvian criminal law is continuously subject to considerable change.545 On the one hand this can be seen as a frivolous attitude towards drafting law.546 However, it also shows a willingness of the legislative power to engage in a dialogue with the parties that apply the law.547 There are plans to set up an EU-wide information network between law enforcement institutions of the Member States in order to fight cross-border organised crime.548

5.14 Corruption in Latvia

5.14.1 Corruption Perception Index Corruption has been and continues to be a problematic matter in Latvia. During the Soviet regime corruption was formally forbidden, yet ‘cheating the state’ was quite common and was perceived as a means to survive. To some extent traces of this way of thinking and acting are still present in Latvia to date.549 Throughout the years, Transparency International has monitored the corruption situation in Latvia. The method this organisation uses is an index in which 0 stands for ‘highly corrupt’ and 10 stands for ‘very clean’ in terms of corruption.550 Before becoming a member of the EU, Latvia scored considerably low on the Transparency International Index. In the period between 2001 and 2003 Latvia’s scores varied from 3.4 to 3.8, which indicates that corruption was a considerable problem.551 It has been suggested that Latvia’s transition to a market economy and membership of the EU might explain these low scores. Regarding the latter explanation, it has been stated that before acceding to the EU, the main focus was on adopting EU legislation and regulations and not so much on carrying the regulations out in practice.552 After acceding to the EU in 2004, Latvia’s situation in terms of corruption improved and

Brief, No. 46, December 1, 2010, p. 2, retrieved from: http://www.isdp.eu/images/stories/isdp-main- pdf/2010_vilks_latvian-organized%20crime.pdf, consulted on 10 April 2012. 543 Europol, ‘Latvia’, retrieved from: https://www.europol.europa.eu/content/memberpage/latvia-775, consulted on 18 March 2012. 544 Ibid. 545 J. Rozenbergs, ‘On Some Developments in Latvian Criminal Law and Criminal Procedure’, Conference Con- tribution to the European Criminal Bar Association Spring Conference, Geneva 27 and 28 April 2012, p. 1, retrieved from: http://www.ecba.org/extdocserv/conferences/geneva2012/recdevRozenbergsLatvia.pdf, consulted on 11 June 2012. 546 Ibid., p. 7. 547 Ibid., p. 7. 548 A. Vilks, ‘Latvian Organized Crime Invests in Politics’, Institute for Security & Development Policy, Policy Brief, No. 46, December 1, 2010, p. 3, retrieved from: http://www.isdp.eu/images/stories/isdp-main- pdf/2010_vilks_latvian-organized%20crime.pdf, consulted on 11 June 2012. 549 Interview R32. 550 Transparency International, ‘Corruption Perceptions Index 2011’, retrieved from: http://cpi.transparency.org/cpi2011/results/#CountryResults, consulted on 17 March 2012. 551 Ibid. 552 Interview R32. LATVIA AND THE EUROPEAN UNION 159 in 2008 Latvia scored a 5 on the scale from 0 to 10.553 This marked a considerable improvement,554 which might have been caused by the fact that there was less need to turn to corruption practices anymore, as the economic circumstances in Latvia were improving.555 However, since 2008 Latvia’s scores have been declining again and are currently even approximating the pre-accession scores. The 2011 Transparency International Index put Lat- via’s score at a 4.2.556 It has been suggested that the declining scores are due to the recent economic crisis.557 The financial crisis and the income cuts have increased the risk of corruption.558

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Index 3.4 3.7 3.8 4.0 4.2 4.7 4.8 5 4.5 4.3 4.2

Table 5.1: Corruption Perception Index, Latvia.559

Yet, other experts in the field claim that the scores presented by the Transparency Internation- al Corruption Perception Index are not particularly reliable and that other surveys indicate the opposite – namely a gradually decreasing level of corruption.560 According to these experts, the Transparency International Index only represents the way in which the corruption situation in Latvia is perceived from an international perspective, and is not an actual representation of the corruption situation in the country. In fact, according to these experts, contrary to expectations, the economic crisis did not contribute to an increase in corruption distribution in Latvia in most sectors. This positive outcome may be due to a change in the attitude of the Latvians towards corruption and the presence of the Corruption Prevention and Combating Bureau (KNAB), which might have served as a stimulus to not become involved in corruption. However, it has been suggested that in the ‘procurement sector’, for instance in the acquisition of EU funds, there probably has been an increase of corruption practices.561

553 Transparency International, ‘Corruption Perceptions Index’, retrieved from: http://archive.transparency.org/policy_research/surveys_indices/cpi, consulted on 17 March 2012. 554 Ibid. 555 Interview R32. 556 Transparency International, ‘Corruption Perceptions Index 2011’, retrieved from: http://cpi.transparency.org/cpi2011/results/#CountryResults, consulted on 17 March 2012. 557 A. Åslund and Valdis Dombrovskis, How Latvia Came through the Financial Crisis, Washington DC: United Book Press inc. 2011, p. 14. 558 Corruption Prevention and Combating Bureau, ‘Progress and results in preventing and combating corruption in Latvia: Periodical update January-September 2011’, September 2011, p.2, retrieved from: http://www.knab.gov.lv/uploads/eng/periodic_update_september_2011.pdf. 559 Transparency International, ‘Corruption Perceptions Index’, retrieved from: http://archive.transparency.org/policy_research/surveys_indices/cpi, consulted on 11 June 2012. 560 Interview R55. 561 Ibid. 160 LAW

5.14.2 Corruption in practice Although there was a certain amount of pre-accession pressure from the EU and NATO562 to address the corruption problems in Latvia, there was hardly any pressure exerted by the EU in this field after accession.563 Corruption as such has continued to occur in various forms. One form of corruption in Latvia that is frequently mentioned by experts is the so-called ‘petty corruption’ in certain sectors. Petty corruption refers to, for instance, medical doctors and their staff who frequently receive ‘gratitude payments’,564 i.e. presents or sums of money from patients who want to reassure that appropriate treatment will be given to them in the hospital.565 Even former President Zatlers has stated that he received bribes in his position as a doctor.566 (More information on this topic can be found in section 8.3.3, page 328.) Also, petty corruption relates to the traffic police, which is often bribed to prevent them from giving fines to drivers for their improper driving behaviour.567 In these two sectors – health care and traffic police – (petty) corruption is prevalent.568 In addition, the Latvian justice system is affected by corruption. For instance, lawyers have been involved in corruption practices in which they ask for money from their clients to influence the judges, but in reality they keep the money themselves.569 As regards corruption among judges, it has to be noted that there have only been a minimal number of criminal cases against judges in recent years.570 Another problematic corruption related matter in Latvia is the so-called state capture:571 a situation where ‘a small number of firms (or such entities as the military) is able to shape the rules of the game to its advantage through massive illicit, and non-transparent provision of private benefits to officials and politicians’.572 In Latvia, such activities are particularly present regarding political parties who receive funding from rich individuals, such as oligarchs. As a result, those individuals often exert substantial influence on those political parties.573 Recently, one judge of the constitutional court has also been involved in state capture, be-

562 Interview R32; interview R30. 563 Interview R32. 564 Ibid. 565 G. J. King, Bruce W. Finnie, J. Thad Barnowe and Linda K. Gibson, ‘Corruption and Economic Development on the Baltic Littoral: Focus on Latvia’, Journal of Baltic Studies, no. 4 (2004), p. 333. 566 L. Johannsen and Karin Hilmer Pederson, ‘The institutional roots of anti-corruption policies: comparing the three Baltic states’, Journal of Baltic Studies, no. 3 (2011), p. 333. 567 G. J. King, Bruce W. Finnie, J. Thad Barnowe and Linda K. Gibson, ‘Corruption and Economic Development on the Baltic Littoral: Focus on Latvia’, Journal of Baltic Studies, no. 4 (2004), p. 334. 568 Interview R32. 569 Ibid. 570 Ibid. 571 A. Russu, ‘Latvia’, September 2010, pp. 3-4, retrieved from: http://www.againstcorruption.eu/uploads/rapoarte_finale_PDF/Latvia.pdf. 572 Iain McLean and Alistair McMillan, The Concise Oxford Dictionary of Politics, Oxford: University Press 2003, retrieved from: http://www.highbeam.com/doc/1O86-statecapture.html, consulted on 17 March 2012. 573 A. Russu, ‘Latvia’, September 2010, pp. 3-4, retrieved from: http://www.againstcorruption.eu/uploads/rapoarte_finale_PDF/Latvia.pdf. LATVIA AND THE EUROPEAN UNION 161 cause certain legislation was amended so that the judge could be eligible for the position of judge in a constitutional court. It has been suggested that the advent of the new parliament in 2011 is a positive development to counter state capture, as many old parliament members have been replaced.574 However, improvements in this field are needed to limit every possible future influence of oligarchs on the parliament and cabinet – institutions through which the state can be most effectively influenced.575 Moreover, high-level corruption is present in Latvia. High-level corruption occurs when, for instance, people organise themselves and jointly steal money from EU funds or commit large-scale tax fraud.576 It has been suggested that in this sector, the so-called ‘procurement sector’, there has been an increase of corruption practices due to the financial crisis.577 Addi- tionally, it has been suggested that in construction work, corruption practices are increasingly common.578 Finally, ‘envelope wages’ are also a significant problem in Latvia: approximately 25 % to 40 % of the Latvian working population receive their wages through this form of illegal payments. In Latvia this is generally not perceived as a form of corruption, but rather ‘grey economy’.579 The issue of envelope wages is discussed in more detail on page 311.

5.14.3 Anti-corruption legislation in Latvia Shortly after Latvia’s independence, there were no strict rules regarding corruption. Initially, Latvia employed the regulations that were imposed during the Soviet regime, and according to those regulations economic offences were less punishable than other crimes.580 However, since its independence Latvia has established substantial legislation to counter the corruption practices in the country, such as:

- ‘Law on Prevention of Corruption’: this was the first law to address the issue of corruption and eventually led to the establishment of a ‘Corruption Prevention Council’ by the Latvian government in 1997.581 This Council among others served to prepare the legal structure for the establishment of KNAB, and is no longer existent to date.582 - ‘Law on Prevention of Conflict of Interest in Activities of Public Officials’: this law creates transparency concerning the work and legal responsibilities of public officials.583 In

574 Interview R32. 575 Ibid. 576 Ibid. 577 Interview R55. 578 Interview R39. 579 Interview R32. 580 A. Russu, ‘Latvia’, September 2010, p. 13, retrieved from: http://www.againstcorruption.eu/uploads/rapoarte_finale_PDF/Latvia.pdf. 581 L. Johannsen and Karin Hilmer Pederson, ‘The institutional roots of anti-corruption policies: comparing the three Baltic states’, Journal of Baltic Studies, no. 3 (2011), p. 336. 582 Interview R55. 583 Corruption Prevention and Combating Bureau, ‘Law on Prevention of Conflict of Interest in Activities of 162 LAW

2011, the law was amended to protect those individuals who provide data or other information concerning the involvement of officials in corruption practices – the so-called whistleblowers.584 - ‘Law on Financing of Political Organisations (parties)’: the main rationale behind this law is to create openness regarding the funding of political associations and to regulate what is legally acceptable in terms of financing.585 - The Latvian Criminal Code also contains various corruption related sections specifically focused on the matter of bribery.586 In 2011 the Latvian Criminal Law was altered to address the matter of unlawful funding of political parties as a punishable crime and to regulate the accountability of those who are involved in unlawful funding.587

5.14.4 Legal gaps Currently, the act of corruption appears to be very well regulated in Latvia. One expert in the field even stated that there is ‘a plethora of legislation’ concerning anti-corruption. The main focus now seems to be on the ‘fine-tuning’ of the current legislation by:

• making even better legislation to fully protect the so-called whistleblowers;588 • improving the ‘internal control procedures’ regarding corruption within ministries;589 • creating ‘more fine-tuned penalties, sanctions, for civil servants in case of misuse of public funds or ineffective use of public funds’;590 • making political parties ‘less dependent on individual sponsors’, by legally decreasing the amount of money which an individual can give to parties, and increasing the public financial support for the political parties;591 • expanding the competences of KNAB to the ‘private sector’ as well, as this organisation currently only has competences in the public sphere;592

Public Officials’, 2011, p. 2, retrieved from: http://www.knab.gov.lv/uploads/eng/on_prevention_of_conflict_of_interest_in_activities_of_public_officials.pd f. 584 Corruption Prevention and Combating Bureau, ‘Progress and results in preventing and combating corruption in Latvia: Periodical update January-September 2011’, September 2011, p. 2, retrieved from: http://www.knab.gov.lv/uploads/eng/periodic_update_september_2011.pdf. 585 Corruption Prevention and Combating Bureau, ‘Law on Financing of Political Organisations (parties)’, Year unknown, pp. 1-13, retrieved from: http://www.knab.gov.lv/uploads/eng/po_finansing.pdf. 586 Corruption Prevention and Combating Bureau, ‘The Criminal Law’, 2011, pp. 1-131, retrieved from: http://www.knab.gov.lv/uploads/eng/the_criminal_law.pdf. 587 Corruption Prevention and Combating Bureau, ‘Progress and results in preventing and combating corruption in Latvia: Periodical update January-September 2011’, September 2011, p. 5, retrieved from: http://www.knab.gov.lv/uploads/eng/periodic_update_september_2011.pdf. 588 Interview R32. 589 Ibid. 590 Ibid. 591 Ibid. 592 Ibid. LATVIA AND THE EUROPEAN UNION 163

• establishing regulations about the declaration of incomes on an annual basis in Latvia, (similar to the system in the Netherlands) so that possible corruption practices can be more easily traced;593 • addressing bribery of so-called private persons, such as professors and doctors, as an punishable act in Latvian legislation. Currently, only bribing public officials, such as judges, is a legally punishable act. However, it has been stated that this legal gap is being addressed at present.594

5.14.5 Anti-corruption organisations Before acceding to the EU and NATO, Latvia was requested to address the corruption related problems in the country on a broader scale and as a result KNAB595 was established in 2002.596 KNAB’s tasks are fourfold: averting corruption practices, investigating corruption related activities, educating the citizens and the Latvian officials on corruption, and monitoring the financing of the political parties.597 At the beginning of KNAB’s activities in 2002, the organisation was hardly aware of the fact that corruption was such a tremendously sensitive issue to investigate.598 However, this became clear very soon when KNAB started to feel pressure, among others from political parties599 who perceived KNAB as troublemakers, because their activities could damage the image of politicians and KNAB’s disclosure of previously concealed information could even lead to losing one’s job.600 At present, KNAB and its employees are still under large pressure daily, as any successful attempt to influence an employee of KNAB is very harmful for the entire organisation and its activities.601 This continues to form a real threat for KNAB, because in the past there have been various efforts from the government to weaken the organisation and its competences from within, through appointing various chiefs who, through their workings or the absence thereof, were not truly anti-corruption oriented.602 For instance, candidates were chosen who the parliament believed would not be very active in countering corruption. And if the opposite was the case and a candidate was very active in its anti-corruption activities, then serious efforts were undertaken to dismiss the head. The number of directors that KNAB has had since its establishment – four until now, including the current – is illustrative of this attitude among

593 Interview R55. 594 Ibid. 595 Ibid. 596 A. Åslund and Valdis Dombrovskis, How Latvia Came through the Financial Crisis, Washington DC: United Book Press inc. 2011, p. 14. 597 Interview R55. 598 Ibid. 599 Interview R32. 600 Interview R55. 601 Ibid. 602 Ibid. 164 LAW

politicians.603 In addition, KNAB and the objectivity of its activities have been a frequent subject of debate. For instance, KNAB is supervised by the government while one of its aims is to investigate the actions of the government. Moreover, the parliament is ultimately responsible for choosing the head of the KNAB (‘upon the recommendation of the Cabinet of Minis- ters’604). Furthermore, the decisions concerning KNAB’s budget are taken by the parliament. This structure has been criticised as it might lead to conflicting situations.605 However, multiple experts in the field have stated that the institutional structure of KNAB does not in any way affect the objectiveness of the organisation.606 Currently, KNAB seems to enjoy sufficient popular and political support for their actions. The political situation used to be less favourable, but much has changed after the political crisis which occurred in Latvia last year, when Valdis Zatlers (then-president of Latvia) decided to dismiss the Latvian parliament. Zatlers’ decision was caused by the denial of the parliament to withdraw the immunity of the parliament members, so that KNAB could obtain a search warrant to further investigate a parliament member’s home. As the parliament refused to withdraw the immunities of the parliament members, KNAB could not continue its investigation, which led to Zatlers’ decision to dismiss the parliament. Even before this, there were several indications that the parliament was not very willing to accept Latvia’s increasing efforts to counter corruption. The political consequences of this crisis are discussed on page 178. To date, KNAB’s activities have led to the conviction and imprisonment of over 100 highly placed officials, such as judges.607 Together with other organisations, KNAB launched a new programme in 2009 to counter corruption. The National Corruption Prevention and Combating Strategy and Programme for 2009-2013 was approved by the government in 2009.608 Despite the increasingly accepted and consolidated role of KNAB in Latvia’s society, there is still one difficulty KNAB is facing. This difficulty relates to the very high level of proof which complainants have to present in order for their case to be accepted before court. In some cases this is particularly frustrating as the organisation might be well aware of the occurrence of corruption practices, but is not able to provide the high level of proof that is required.609 Additionally, the Latvian judicial system operates very slowly (see page 119), and

603 Ibid. 604 A. Russu, ‘Latvia’, September 2010, p. 12, retrieved from: http://www.againstcorruption.eu/uploads/rapoarte_finale_PDF/Latvia.pdf. 605 Ibid., p. 12. 606 Interview R11; interview R32. 607 Corruption Prevention and Combating Bureau, ‘Progress and results in preventing and combating corruption in Latvia: Periodical update 2009’, 2009, p. 2, retrieved from: http://www.knab.gov.lv/uploads/eng/periodic_update_20091.pdf. 608 Corruption Prevention and Combating Bureau, ‘Policy documents’, retrieved from: http://www.knab.gov.lv/en/legislation/policy/, consulted on 17 March 2012. 609 Interview R55. LATVIA AND THE EUROPEAN UNION 165 therefore most of the investigation processes are very lengthy.610 In addition to KNAB, many institutions have their own ‘internal control mechanisms’ to control and investigate corruption occurrence in their institutions, such as the police and customs. Also, the Mandate, Ethics and Submissions committee is one such ‘internal mechanism’ within the Latvian parliament.611 This Committee’s field of work is considerably broad and entails activities such as examining complaints raised with regard to the parliamentary election procedures. Moreover, the Committee has the liberty to ask the parliament to commence legal proceedings against a member of the parliament.612 However, unlike the KNAB, such committees do not have law enforcement competences, such as imposing financial sanctions upon violators.613

5.14.6 EU and international anti-corruption legislation and cooperation To acquire membership of the European Union, every candidate country must implement and ratify EU legislation (acquis communautaire). Chapter 23 of the EU acquis specifically addresses the matter of corruption and states that ‘Member States must fight corruption effectively, as it represents a threat to the stability of democratic institutions and the rule of law. A solid legal framework and reliable institutions are required to underpin a coherent policy of prevention and deterrence of corruption.’614 Latvia has accepted all EU legislation and rules,615 including those that address corruption. Moreover, Latvia has ratified the United Nations Convention against Corruption, as well as the Criminal Convention on Corruption established by the Council of Europe.616 However, Latvia has not yet ratified the 1999 Convention on Combating Bribery of Foreign Public Of- ficials in International Business Transactions of the Organisation for Economic Cooperation and Development (OECD).617 Latvia has stated that it has the intention to do so soon618 and the country is attempting to become a member of the OECD working group that is linked to this Convention on Combating Bribery. Yet, in order to become a member of this working

610 Interview R32. 611 Interview R55. 612 Saeima website, ‘Rules of Procedure of the Saeima’, retrieved from: http://www.saeima.lv/en/legislation/rules-of-procedure, consulted on 17 March 2012. 613 Interview R55. 614 European Commission website, ‘Enlargement’, retrieved from: http://ec.europa.eu/enlargement/enlargement_process/accession_process/how_does_a_country_join_the_eu/nego tiations_croatia_turkey/index_en.htm, consulted on 17 March 2012. 615 L. Johannsen and Karin Hilmer Pederson, ‘The institutional roots of anti-corruption policies: comparing the three Baltic states’, Journal of Baltic Studies, no. 3 (2011), pp. 342-343. 616 I. Dimireva, ‘Latvia Investment Climate 2009’, retrieved from: http://www.eubusiness.com/europe/latvia/investhttp://www.eubusiness.com/europe/latvia/invest, consulted on 17 March 2012. 617 OECD Website, ‘OECD Convention on Combating Bribery of Foreign Public Officials in International Busi- ness Transactions: Ratification status as of March 2009’, April 2012, p.1, retrieved from: http://www.oecd.org/dataoecd/59/13/40272933.pdf. 618 I. Dimireva, ‘Latvia Investment Climate 2009’, retrieved from: http://www.eubusiness.com/europe/latvia/invest, consulted on 17 March 2012. 166 LAW

group, countries have to be invited and so far this has not happened, supposedly because of Russian advocacy against Latvia’s membership.619 Additionally, KNAB participates in a project established by the European Commission ‘to strengthen the capacity of Latvian law enforcement agencies (LEA) to perform financial investigation, especially in terms of identification, tracing and recovering of proceeds from crime.’620 KNAB also participates in various initiatives that are focused on the sharing of knowledge and experience with other countries as regards corruption. Such initiatives have been undertaken in cooperation with the European Anti-Fraud Office (OLAF) and the Euro- pean Council’s Group of States against Corruption (GRECO).621 Despite the fact that Latvia is participating in the main international anti-corruption agreements, one expert has suggested that more EU policy on anti-corruption is desirable, as corruption is hardly addressed in EU legislation.622 At present, there are serious indications that in 2013 the EU will publish its first report on the situation of corruption in the entire EU, which might indicate a movement towards more EU regulations in this field.623

5.14.7 Civil society Apart from the anti-corruption agencies and legislation, civil society also plays a great role in combating corruption in Latvia.624 The two main anti-corruption NGOs are Transparency In- ternational Delna (TI Delna) and the Centre for Public Policy Providus. Both NGOs encourage a ‘more open democracy’ and critically evaluate the election procedures and expenditures.625 The activities of TI Delna are primarily focused on the ‘formation of an open, fair and democratic society free from corruption in politics, business and mutual relationships.’626 This organisation has established various projects that contribute to transparency, such as a project on ‘Promoting responsible voting’. The main aim of this project was to provide information to the voting public about the candidates for the parliamentary election and the candidates’ involvement in corruption activities. By doing this, the voters knew exactly which candidates are sensitive to corruption activities.627 This online ‘candidates reputation database’, which TI Delna constructed before the parliamentary elections in 2010 and 2011, was very successful and resulted in a great change of the political spectrum because a substantial number of candi-

619 Interview R32. 620 Corruption Prevention and Combating Bureau, ‘Progress and results in preventing and combating corruption in Latvia: Periodical update January-September 2011’, September 2011, p. 7, retrieved from: http://www.knab.gov.lv/uploads/eng/periodic_update_september_2011.pdf. 621 Ibid., p. 7. 622 Interview R32. 623 Ibid. 624 Interview R55; interview R32. 625 A. Russu, ‘Latvia’, September 2010, pp. 7-8, retrieved from: http://www.againstcorruption.eu/uploads/rapoarte_finale_PDF/Latvia.pdf. 626 Transparency International- Latvia, ‘Transparency International – Latvia 2010 Annual Report’, 2010, p. 4, retrieved from: http://www.scribd.com/doc/65422073/Transparency-International-Latvia-2010-Annual-Report- Audited. 627 Ibid., p. 4. LATVIA AND THE EUROPEAN UNION 167 dates who had a poor reputation concerning corruption were not elected.628 The more conventional politicians and oligarchs are displeased with the actions of the NGOs and as a result these organisations have been referred to as ‘troublemakers’.629 KNAB closely cooperates with the NGOs mentioned.630 This cooperation came to the fore in 2007 among others, when the Latvian government wanted to dismiss the head of the KNAB, allegedly because of the effectiveness of his anti-corruption activities. The civil society, in cooperation with KNAB, organised a demonstration (also referred to as the ‘umbrella revolution’) in which approximately 10 000 Latvians participated to protest against the potential dismissal of KNAB’s director. This demonstration proved to be very successful, and eventually the head of KNAB was not fired.631 Although this demonstration has been one of the most successful civil society actions until now, one NGO has stated that in many other cases combating corruption is still ‘a cat and mouse game’.632

5.14.8 Public perception towards corruption The 2009 Eurobarometer survey concerning the ‘attitudes of Europeans towards corruption’ showed that 84 % of the Latvian citizens considered corruption a ‘major problem’ in their country.633 In general, the Latvian society mostly associates the court system, political parties and the parliament with corruption. As a result the level of popular trust in these institutions is very low.634 Interestingly, in recent years there appears to be a shift in the stance of Latvian citizens towards corruption, and more specifically bribes. Whereas in 2007 39 % of citizens were prepared to give gifts or money for certain acts or services, in 2009 only 32 % of the Latvians were still prepared to do so.635 Generally, the activities of KNAB have been very conducive for changing public perception towards corruption. According to research conducted by KNAB itself, the percentage of Latvians who are still willing to participate in corruption has decreased significantly since their establishment.636 On the one hand, it has been suggested that people are slowly moving into a ‘grey area’ in which they no longer resort to bribes automatically, but feel less safe and less comfortable when doing this. Also, the arrest of highly placed officials such as judges has contributed to

628 Interview R32. 629 A. Russu, ‘Latvia’, September 2010, pp. 7-8, retrieved from: http://www.againstcorruption.eu/uploads/rapoarte_finale_PDF/Latvia.pdf. 630 Ibid., pp. 7-8. 631 Ibid., pp. 7-8 and p. 10. 632 Interview R32. 633 Eurobarometer survey, ‘Attitudes of Europeans towards corruption’, 2009, p. 8, retrieved from: http://ec.europa.eu/public_opinion/archives/ebs/ebs_325_en.pdf. 634 Interview R32. 635 A. Russu, ‘Latvia’, September 2010, p. 17, retrieved from: http://www.againstcorruption.eu/uploads/rapoarte_finale_PDF/Latvia.pdf. 636 Interview R55. 168 LAW

this ‘healthier’ anti-corruption trend in society.637 On the other hand, it has been suggested that there are ‘a lot of double faces’ in Latvia; i.e. most people do agree that corruption is an immoral act, but secretly still participate in it themselves.638 Currently, one particularly worrying trend in the field of corruption relates to the younger generation.639 It has been suggested that they view corruption practices in a strik- ingly positive way, due to the lack of a proper role model in society or within their family.640

5.15 Conclusion

After independence and in the run-up to accession to the EU, much progress has been made regarding law in Latvia. While Latvia’s constitution provides for a parliamentary democracy with full respect for the rule of law, several challenges remain in this area. Access to justice is considered to be good in Latvia. However, this accessibility creates a problem of overload of certain courts. In order to improve the situation, one may consider expanding the capacity for written proceedings, putting a halt on appeal possibilities for smaller cases, or installing more separate divisions in certain courts to make judges even more specialised. As far as the separation of powers is concerned, this is considered to be insufficient. However, Latvia has already made first steps towards improvement; for example by the creation of an independent judicial council which will take over the responsibility of the Ministry of Justice for the budget planning of the courts. Corruption also remains a problem in Latvia, partly because of the younger generation who perceive corruption as something positive. Yet, efforts of the civil society and KNAB, combined with the relatively strong anti-corruption legal framework, might lead to less corruption distribution in the future. In the field of human rights, the lack of knowledge of international and European legislation among judges is still an obstacle to correct application of legal norms in compliance with international standards. Furthermore, there are still some systematic violations of human rights, especially regarding social and ethnic minorities. For instance, same-sex couples are not allowed to marry and thus do not share the same level of protection as married couples do. Moreover, their right of assembly has been jeopardised several times by the Riga City Coun- cil. Also, the right of national minorities to speak their own language is at odds with the pro- tective measures taken by the government regarding the Latvian language, creating an un- pleasant situation for the Russian speaking minority. In addition, discrimination occurs between men and women in terms of monthly wages, which are considerably lower for women than men in Latvia. A final problematic matter Latvia faces, relates to the fact that Latvia has not transposed all elements of EU anti-discrimination directives, which results in an incom-

637 Interview R11. 638 Interview R39. 639 Interview R32. 640 Ibid. LATVIA AND THE EUROPEAN UNION 169 plete protection for the victims of discrimination.

LATVIA AND THE EUROPEAN UNION 171

6. Politics

6.1 Introduction

Latvia made its first steps towards democracy at the end of the 1980s, when it became apparent that the power structure of the Soviet Union was severely weakening. For a country to successfully implement a democracy, popular support is key. As is common in many former- Soviet states, the Latvians can generally be considered weak democrats who remain sceptical about (the benefits of) democracy. This goes hand in hand with the fact that many Latvians remain unsatisfied with their government, although the current government seems to be the most popular government in place since its independence in the early 1990s. National politics can be best characterised as turbulent. Latvia has seen many different governments in the past two decades. However, they have all been center-right; ‘leftist’ parties are still associated with communism. Furthermore, multiparty coalitions have been typical for Latvia and have often turned out to be unstable and impertinent. The instability and many changes of cabinets can partly be explained by the fragmentation in Latvian politics and the high level of corruption. However, the crisis seems to have brought some stability to the political system: PM Dombrovskis has managed to stay in office for free terms. Other important recent phenomena in recent years are the electoral growth of Concord Centre, the social- democratic, ‘Russian’ party, and the slow diminishing of the oligarch parties. Only since its independence in 1991, Latvia has been able to create a foreign policy of its own. Latvia immediately chose to join international organisations such as the EU and NATO so it could ‘return to where we felt we belonged’. In the first ten years of EU membership, Latvia’s main task was to find its role and position in the Union. It has learned a lot and matured into a fully participating Member State, which knows how everything works in Brus- sels. They are particularly involved in the Direct Payments (CAP) and the fiscal compact debates. Cooperation with the other Baltic states and Nordic countries is inevitable both within the EU institutions and outside of it. By wanting to join the EU and NATO at the time, tensions between Russia and Latvia became rather unfriendly which resulted in Russian intervention in Latvian domestic and foreign affairs. Latvia’s foreign relations are developing, but already with a clear focus on further deepening integration with international organisations in which Latvia attaches great importance to.

6.2 National politics

Since the first free parliamentary elections were held in 1993, the Latvian political landscape 172 POLITICS

has been characterised by the existence of many medium-sized political parties.1 This has resulted in a rather fragmented political landscape with many changes of government.2 In the 1990s most governments consisted of four to six political parties. After 1998, several alliances have been formed, both left-wing and right-wing.3 From 1989 onwards, political parties started to evolve in Latvia. From 1989 to 1991, the essential topic on the agenda was whether a party was for or against independence of Latvia.4 This question created a cleavage between the ethnic Latvians, who were generally for Latvian independence, and the ethnic Russians, who were generally against.5 This ethnic cleavage was institutionalised after independence in 1991. The first political parties in independent Latvia were roughly structured along ethnic lines: there were Russian-minded parties on the one hand and Latvian-minded parties on the other hand.6 Around 1995, when Latvia was hit by the first banking crisis, politics became more determined by economic stances instead of ethnic questions. The economic crisis brought politics in the more traditional left- and right-wing classification.7 However, this classification never fully gained ground in Latvia, because real leftist parties did not emerge. Left-wing politics is still associated with the Communist Party of the Soviet era. For that reason, nowadays, all Latvian parties can be classified as ‘right of the centre’-parties, according to Western standards.8

6.2.1 Political landscape of Latvia In 2012, there are seven major political parties in Latvia. These parties, their development and their most important ideas will be discussed below. It will be demonstrated that emerging parties have often caused transformations and connections to or divisions within existing parties.9 In fact, most existing parties have emerged from alliances, often shortly before an election. This ‘fashion’ started in 2010 in response to the wish of the Latvian voters.10 Before the 2010 elections there were many complaints that the political scene was too fractured. This complaint has historical roots, because the fractured nature and the multi-party system are often blamed for the democratic breakdown in 1934, when Karlis Ulmanis staged a coup and established a dictatorship.11 Another explanation is that this ‘fashion’ in alliances

1 Europa Nu, ‘Letland - politieke situatie’, retrieved from: http://www.europa-nu.nl/id/vgaxlcr1jzkj/letland#p1, consulted on 7 June 2012. 2 Ibid. 3 Ibid. 4 Interview R30. 5 Ibid. 6 Ibid. 7 Ibid. 8 Ibid. 9 K. Dudzi0ska, ‘Latvia: the economic crisis and (im)possible changes’, Lithuanian Foreign Policy Review 26, 2011, p. 93. 10 Interview R30. 11 Ibid. LATVIA AND THE EUROPEAN UNION 173 started in 2002 to avoid the word ‘party’. The word would remind Latvian people of the Sovi- et time, when there was only the Communist Party.12 A third explanation for the emergence of alliances is a lack of strong ideology of the parties in Latvia.13

Concord Centre (Saskanas Centrs, CC)14 Concord Centre was established in 2005 as a political alliance between the Social Democratic Party, the Socialist Party and the Social Democratic Union. It can be regarded as left-wing and its ideology touches upon socialism, social democracy and Russian minority politics.15 The majority of the MEPs of CC is Russian-speaking. CC presents itself as ‘the only party in which ethnic Latvians and Russian-speakers work together’.16 Amongst other things, the party wants an increased role for the Russian language in education and public administration, and to reform the Latvian citizenship so that it can be awarded to non-citizens more easily.17 In February 2012 Concord Centre contacted the European Parliament, sending a letter to then- President of the European Parliament Jerzy Buzek in which the party informed him on the inequality between Latvians and the Russian-speaking minority in many corners of Latvian society.18 Furthermore, the party advocates an increase in social spending to boost the economy and increase welfare.19 At the European level CC is affiliated with the European United Left –Nordic Green Left. Since its establishment in 2005, CC has significantly grown and it was the biggest party in the elections of October 2011. The explanation for this large growth might be that CC is the only social democratic party in Latvia’s political landscape.20 Others explain the growth by the fact that Latvian people are fed up with right-wing politics.21 CC believes that it has managed to demonstrate that real social democratic ideas are different from the leftist ideas that people remember from Soviet times.22 CC is often accused by the other political parties of having strong ties with Russia. There are rumours that the CC campaign in the language referendum of February 2012 was partly financed by the Kremlin.23 Furthermore, they are accused of standing up for the Russian in-

12 Interview R41. 13 Interview R63. 14 Saskanas Centrs is also translated in English as Harmony Centre. In this report, the term Concord Centre will be used, the term the party itself prefers. 15 Interview R06. 16 Enotes, ‘Concord Centre’, retrieved from: http://www.enotes.com/topic/Concord_Centre, consulted on 7 June 2012. 17 Ibid. 18 B. Cilevi*s, ‘Letter to E. Buzek about minorities in Latvia’, retrieved from: http://www.saskanascentrs.lv/lv/letter-to-ebuzek-about-minorities-in-latvia/, consulted on 7 June 2012. 19 Enotes, ‘Concord Centre’, retrieved from: http://www.enotes.com/topic/Concord_Centre, consulted on 7 June 2012. 20 Interview R30. 21 Interview R06. 22 Ibid. 23 Interview R41. 174 POLITICS

terests only, instead of for the Latvian interests.24 CC itself denies these rumours and says to be a ‘mingled party’ defending both Latvians’ as well as Russian-speakers’ rights.25

Unity (Vienot!ba, V) Unity was founded in March 2010 as a right-wing alliance between the former New Era Party, the Society for the Other Politics and the Civic Union. It was installed to serve as counter- weight to the earlier established Concord Centre, just before the parliamentary elections in the fall of 2010.26 The alliance was transformed into one political party in August 2011. In the European Parliament, Unity belongs to the European People’s Party. Valdis Dombrovskis, who has been Prime Minister of Latvia since 2009, is a member of Unity. Unity presents itself as a party that balances liberal, conservative and social values.27 It is said to be a pro-Latvian, pro-European and progressive party.28 Their website sets out their mission: ‘to create a sustainable Latvian state; a European and democratic country, whose people are well educated, healthy and safe.’29

Zatlers’ Reform Party (Zatlera reformu partija, ZRP) Former President Valdis Zatlers founded the Zatlers’ Reform Party (ZRP), a centre-right political party, in July 2011. At the establishment, Zatlers announced that this party would not cooperate with the three ‘oligarch’ parties (referring to the former People’s Party, the Union of Greens and Farmers and Latvia’s First Party/Latvian Way).30 Two months after the instalment of the ZRP, 1000 people had applied to join the party.31 The party is still in the process of drafting its core working principles but was one of the biggest winners in the country’s parliamentary elections of October 2011. ZRP has already formulated the wish for a small, pragmatic and efficient government and an independent judiciary.32 ZRP is not represented at the European level yet.

National Alliance (Nacion%l% apvien!ba, NA) National Alliance (officially the National Alliance "All For Latvia!" – "For Fatherland and Freedom/LNNK") is a right-wing political party and the fourth-largest party in the parliament

24 Ibid. 25 Interview R06. 26 U. Ozoli(%, ‘Unity has potential, but faces rocky road’, retrieved from: http://latviansonline.com/commentary/article/6557/, consulted on 7 June 2012. 27 Vienotiba, ‘Kas ir Vienotiba?’, retrieved from: http://www.vienotiba.lv/par-mums/, consulted on 7 June 2012. 28 Interview R35. 29 Vienotiba, ‘Kas ir Vienotiba?’, retrieved from: http://www.vienotiba.lv/par-mums/, consulted on 7 June 2012. 30 Delfi, ‘Zatlera partija nesadarbosies ar ZZS, LPP/LC un TP’, retrieved from: http://www.delfi.lv/news/national/politics/zatlera-partija-nesadarbosies-ar-zzs-lpplc-un-tp.d?id=39485733, consulted on 7 June 2012. 31 Apollo, ‘Zatlera Reformu partij# pieteiku%ies vair#k nek# 1000 cilv&ku’, retrieved from: http://www.apollo.lv/portal/news/articles/244294, consulted on 7 June 2012. 32 Zatlera Reformu Partija, ‘Zatlera Reformu partijas programma’, retrieved from: http://reformupartija.lv/programma/, consulted on 7 June 2012. LATVIA AND THE EUROPEAN UNION 175 since the elections of October 2011. NA is a coalition of conservatives, economic liberals and Latvian ethno-nationalists, which came into existence for the 2010 elections.33 The reason to merge was to ‘unite national conservative political forces’.34 The alliance became a formal political party in July 2011. The alliance is regarded as a nationalist bloc.35 After the most recent elections, it joined the centre-right coalition, along with the ZRP and Unity, under Prime Minister Dombrovskis.36 During the cabinet negotiations, NA refused to enter a government with CC, because its stance was too Russia-friendly and its vision on Latvia’s future too different.37 At the European level, NA belongs to the Alliance of European Conservatives and Reformists.

Union of Greens and Farmers (Za"o un Zemnieku Savien!ba, ZZS) Contrary to many green political movements in western and central Europe, the Union of Greens and Farmers is a centre and conservative alliance.38 It is currently the third largest party in the parliament and consists of two political parties (Latvian Farmers’ Union and the Green Party of Latvia). The alliance was created before the 2002 parliamentary elections. In 2004, Indulis Emsis from the Green Party became Prime Minister of Latvia. Latvia is the only country where the Farmers’ party and the Green party have similar objectives. The reason to join the forces in 2002 was to be stronger together in the coming elections.39 An explanation for the success of the alliance might be that the Green party has not been very radical and active so far, especially compared to other Green parties in Europe.40 Both the Farmers’ Union and the Green Party of Latvia want to support traditional small farms. ZZS opposes granting all non-citizens Latvian citizenship and voting rights.41 The party can be regarded as ‘Eurocritical’, if not Eurosceptic. Others prefer to use the term ‘Eureal- istic’ for the party.42 At the European level, the Green Party cooperates with The Greens/European Free Alli- ance, while the Farmer’s Union works together with the European Liberal, Democrat and Re- form Party. ZZS does not have any seats in the European Parliament at the moment. The Lat- vian member of European Parliament (MEP) in The Greens/European Free Alliance, Tatjana

33 The Economist, ‘Latvia’s election: Reboot in Riga’, retrieved from: http://www.economist.com/node/21530161, consulted on 7 June 2012. 34 Interview R41. 35 Interview R45. 36 A. Eglitis, ‘Latvia’s Dombrovskis to return as premier after coalition accord’, retrieved from: http://www.businessweek.com/news/2011-10-11/latvia-s-dombrovskis-to-return-as-premier-after-coalition- accord.html, consulted on 7 June 2012. 37A. Gardner, ‘Latvia forms a government’, retrieved from: http://www.europeanvoice.com/article/2011/october/latvia-forms-a-government/72410.aspx, consulted on 7 June 2012; interview R41. 38 Interview R63. 39 Ibid. 40 Ibid. 41 Ibid. 42 Ibid. 176 POLITICS

+danoka, used to be associated with the Communist Party and is therefore not allowed to enter Latvian politics. For that reason, +danoka is not a ZZS member of the European Parlia- ment. Another notable situation for the party was the charge of corruption and fraud (bribery, money laundering and abuse of office) which Avairs Lembergs, prime minister candidate in 2006, received in 2007. Until today, Lembergs denies all of these charges.43 Right before the referendum of 2011, ZZS was accused by the president of being an ‘oligarch party’. ZZS denies this claim and says that they were picked as a target to fight against, only to make the 2011 referendum possible.44

Latvia’s First Party/Latvian Way (Latvijas Pirm% Partija/Latvijas Ce"#, LPP/LC) Centre-right party LPP/LC was established in 2007 and is an alliance of the Christian democratic Latvia’s First Party (LPP), the liberal Latvian Way (LC) and the regionalist We for our District and Vidzeme Union.45 These parties cooperated as an electoral coalition for the first time in 2006. In the 2010 election campaign, LPP/LC was part of the For a Good Latvia alliance. LPP/LC renamed itself to Slesers LPP/LC Reform Party in 2011 and ran only in that year’s election.46 After they lost all their seats in that election, the party changed its name back to LPP/LC. The party was disbanded at the end of 2011 after a decision by its congress. In the European parliament, LPP/LC still has one representative, in the Group of the Alliance of Liberals and Democrats for Europe.

For Human Rights in United Latvia (Par cilv$ka ties!b%m vienot% Latvij%, PCTVL) For Human Rights in United Latvia is a left-wing political party in Latvia, largely supported by ethnic Russians and other non-Latvian minorities.47 The party focuses on the issues that are important to the Russian-speaking community, such as making Russian an official language and granting citizenship to all non-citizens of Latvia. It also strives for a better relationship with Russia. PCTVL was the only party that was not in favour of joining NATO at the time.48 PCTVL is not very popular amongst ethnic Latvians and has remained in the opposition, since other political parties do not want to enter a coalition with PCTVL, afraid to lose votes. The party has lost support in recent years, as many Russian voters have switched to CC.49 After the elections of 2010, the party lost representation in the parliament. At the elections for

43 The Economist, ‘Latvian elections: the oligarch’s exit. Time up for Tychoons’, retrieved from:http://www.economist.com/blogs/easternapproaches/2011/09/latvian-elections-oligarchs-exit, consulted on 7 June 2012. 44 Interview R63. 45 Interview R30. 46 Ibid. 47 Ibid. 48 Ibid. 49 Ibid. LATVIA AND THE EUROPEAN UNION 177 the European Parliament (EP) in 2009, PCTVL won 10.66% of the votes, leading to one seat for Tatjana +danoka, who affiliates with the Greens/EFA group in the EP. In the past, PCTVL has proposed to form a Europe-wide party of ethnic Russians.

6.2.2 Government coalitions in recent years

The Kalvitis governments and the Godmanis government There were several governments between 2006 and 2010, which can all be characterised as centre-right.50 Prime Minister Kalvitis’ first cabinet (consisting of his own People’s Party, the New Era Party, Latvia’s First Way and the Union of Greens and Farmers) fell in 2006, when the New Era Party left the government. He then led a minority coalition government consisting of the other three parties. This government coalition was re-elected in October 2006 and was joined by For Fatherland and Freedom/LNNK.51 After being in office for just one year, the government had to resign in December 2007 after PM Kalvitis had encountered widespread opposition to his dismissal of Aleksejs Loskutovs, the head of the anti-corruption bureau KNAB.52 All in all, Kalvitis had been Lat- via’s longest serving PM since independence in 1991: he marked three years in office. After Kalvitis’ government resigned, Ivars Godmanis of the central-right party ‘The Lat- vian Way’ was asked by President Valdis Zatlers to become PM.53 Zatlers was charged with the formation of a new coalition, which would serve as a ‘crisis government’ and which had to restore trust in the government.54 Godmanis had already served as PM from 1990 until 1993, right after independence. However, this cabinet (consisting of The Latvian Way/Latvia’s First Party, People’s Party, For Fatherland and Freedom/LNNK and The Union of Greens and Farmers) only lasted until February 2009, due to severe economic and political crises, which had resulted in civil unrest and the worst riots the country had seen since regaining independence, leading to 40 injuries.55 Consequently, Godmanis resigned, together with his government.56 President Valdis Zatlers then appointed former Minister of Finance Valdis Dombrovskis as the new PM in February 2009.

50 Europa Nu, ‘Letland - politieke situatie’, retrieved from: http://www.europa-nu.nl/id/vgaxlcr1jzkj/letland#p1, consulted on 7 June 2012. 51 BBC News, ‘Latvian coalition retains power’, retrieved from: http://news.bbc.co.uk/2/hi/europe/5416778.stm, consulted on 7 June 2012. 52 Voice of America, ‘Latvian PM Bows to Growing Pressure, Announces Resignation’, retrieved from: http://www.voanews.com/english/news/a-13-2007-11-07-voa66-66801547.html, consulted on 7 June 2012. 53 The Baltic Times, ‘Godmanis nominated for prime minister’, retrieved from: http://www.baltictimes.com/news/articles/19515/, consulted on 7 June 2012. 54 Ibid. 55 NRC.nl, ‘Crisis velt regering van Letland’, retrieved from: http://vorige.nrc.nl/buitenland/article2159115.ece/Crisis_velt_regering_van_Letland, consulted on 7 June 2012. 56 BBC News, ‘Latvian PM quits as crisis bites’, retrieved from: http://news.bbc.co.uk/2/hi/europe/7901902.stm, consulted on 7 June 2012. 178 POLITICS

The first and second Dombrovkis government Valdis Dombrovkis (Unity) formed a five-party cabinet in March 2009, consisting of three of the four previously governing parties (For Fatherland and Freedom/LNNK, People’s Party and Union of Greens and Farmers) and Dombrovskis’ own New Era Party, as well as the Civ- ic Union, a small right-wing party. Dombrovskis had high hopes for this coalition, since it brought new faces into the cabinet of ministers, but at the same time ensured a certain degree of continuity.57 His new government won the parliament’s confidence vote in March.58 How- ever, this government did not last long either. In its first 100 days of office, it already received much criticism.59 It was particularly accused of not doing anything different than previous governments; there was an overall lack of real breakthrough and Unity was accused of having taken over the style of the People’s Party.60 Nonetheless, it survived until the October 2010 elections. At the October 2010 parliamentary election, Concord Centre increased its number of seats significantly and became the second largest political force and the biggest opposition alliance in the parliament. This had been predicted already and had triggered the New Era Party, the Society for the Other Politics and Civic Union to form Unity before the elections.61 Concord Centre had profited from the fractured centre and right and had been the leading party in monthly ratings for several years (scoring 18.5 % in February 2010).62 All other parties were doing very badly in the polls. The People’s Party was stuck at 3 % (below the 5 % necessary for a place in the parliament) in the polls.63 The only coalition party that seemed safe was the Union of Greens and Farmers.64 Unlike expected, Concord Centre came in second at the elections. Unity managed to become the biggest party; the new alliance was successful in attracting the necessary votes. The Union of Greens and Farmers also did well, whereas For Fatherland and Freedom/LNNK lost. PCTVL lost all of its seats. Subsequently, a coalition was formed between Unity and ZZS which was ratified in November. This would be the second government led by PM Dombrov- skis; a notable achievement, since he had implemented severe and unpopular budget cuts in the past years.65 The second Dombrovskis government was in office for almost a year when, in the summer of 2011, President Valdis Zatlers used his parliamentary dissolution power. This was the

57 Dalje.com, ‘Latvia government named, differences emerge’, retrieved from: http://dalje.com/en-world/latvia- government-named-differences-emerge/239733, consulted on 7 June 2012. 58 Ibid. 59 Ibid. 60 The Baltic Times, ‘Dombrovskis’ government marks 100 uneventful days’, retrieved from: http://www.baltictimes.com/news/articles/30457/, consulted on 7 June 2012. 61D. Akule, ‘Parliamentary elections in Latvia: Victory Celebrations will be Short as Austerity Measures Should be Introduced Quickly’, retrieved from: http://www.providus.lv/public/27395.html, consulted on 7 June 2012. 62 U. Ozoli(%, ‘Unity has potential, but faces rocky road’, retrieved from: http://latviansonline.com/commentary/article/6557/, consulted on 7 June 2012. 63 Ibid. 64 Ibid. 65 Ibid. LATVIA AND THE EUROPEAN UNION 179 first time in the history of Latvia that the president dissolved the parliament. He called for a referendum on whether the parliament should be dissolved early, after it had refused to sanc- tion a search at the home of the leader of Latvia’s First Party/Latvian Way, 1lesers.66 The referendum took place on 23 July 2011 and it turned out that 94.3% of the voters supported early elections.67 Zatlers’ choice for a referendum seemed tricky, since the constitution says that if the people would not support the decision, he would have to resign as President. How- ever, Zatlers’ term would end on 7 July, and he had not been re-elected in the presidential election on 2 June.68 Early elections were called for September 2011.

Most recent elections and the third Dombrovskis government The most recent elections for the parliament were held on 17 September 2011. The election results were hailed as starting a new chapter in Latvian politics, because only one of the old ‘oligarch’ parties had managed to retain seats in the parliament.69 The biggest winner of the elections in September 2011 was Concord Centre. However, they stayed out of the coalition. A new three-party cabinet was formed in October 2011, led by Dombrovskis (Unity) once again. The coalition consists of Unity, Zatlers’ Reform Party and National Alliance. Concord Centre is the largest party in the opposition. The current composition of the parliament (which has 100 seats) is as follows:70

Party Seats

Concord Centre (CC) 31

Zatlers’ Reform Party (ZRP) 22

Unity (V) 20

National Alliance (NA) 14

Union of Greens and Farmers (ZZS) 13

Since CC and Unity were unable to reconcile their differences during the initial coalition ne-

66 A. Eglitis, ‘Latvia to Vote on Dissolving Parliament Amid Corruption Probe’, retrieved from: http://www.bloomberg.com/news/2011-05-28/latvia-to-vote-on-dissolving-parliament-amid-corruption- probe.html, consulted on 7 June 2012. 67 Central Election Commission, ‘2011. gada 23. j/lija tautas nobalso%anas par 10.Saiemas atlai%anu Rezult#ti’, retrieved from: http://www.tn2011.cvk.lv/results.html, consulted on 7 June 2012. 68 Delfi, ‘Zatlers ir Latvijas v&stur& pirmais Saiemas atlai%anas ierosin#t#js’, retrieved from: http://www.delfi.lv/news/national/politics/zatlers-ir-latvijas-vesture-pirmais-Saiemas-atlaisanas- ierosinatajs.d?id=38760423, consulted on 7 June 2012. 69 The Economist, ‘Latvia’s election: Reboot in Riga’, retrieved from: http://www.economist.com/node/2153016, consulted on 7 June 2012. 70 Centr#l# V&l&%anu Komisija, ‘The 11th Saiema Elections’, retrieved from: http://web.cvk.lv/pub/public/30182.html, consulted on 7 June 2012. 180 POLITICS

gotiations,71 a coalition was instead formed between Unity, ZRP and NA.72 Unity leader Val- dis Dombrovskis remained prime minister, heading his third cabinet in less than three year.73 The new Dombrovskis administration has said that fiscal consolidation and sustainable economic growth are its top priorities.74

6.2.3 Trends and summary In general, it can be said that Latvia has seen many changes of government in the past years and the political situation can be characterised as turbulent.75 Multiparty coalitions have been typical for Latvia and have often turned out to be unstable and short-lived.76 The instability and many changes of the cabinets can partly be explained by the fragmentation in Latvian politics and the high level of corruption.77 The president has more than once intervened by appointing a new PM without calling elections. Prime Minister Kalvitis and Prime Minister Dombrovskis did manage to stay in office for longer than one term, but the coalition parties changed numerous times. This was often caused by cases of corruption. The long tenure of current PM Dombrovskis can be explained by his image of a ‘technocrat’ rather than a bureaucrat, by his image of an EU politician who came back from Brussels to save the country, and by the economic recovery under his leadership.78 Below you will find an overview of the coalitions since 2006.

Period Cabinet name Coalition parties PM October 2006 – Kalvitis government - People’s Party Aigars Kalvitis December 2007 (minority coalition) - Latvia’s First way - Union of Greens and Farmers December 2007 – Godmanis government - The Latvian way Ivars God- February 2009 - People’s Party manis - For Fatherland and Freedom/LNNK - The Union of Greens

71 Baltic News Network, ‘Negotiations on four-party model fail’, retrieved from: http://bnn- news.com/negotiations-four-party-model-fail-38126, consulted on 7 June 2012. 72 Baltic News Network, ‘Saiema approves new government’, retrieved from: http://bnn-news.com/saima- approves-government-39636, consulted 7 June 2012. 73 Europa Nu , ‘Letland - politieke situatie’, retrieved from: http://www.europa-nu.nl/id/vgaxlcr1jzkj/letland#p1, consulted on 7 June 2012. 74 Ibid. 75 Interview R30. 76 K. Dudzi0ska, ‘Latvia: the economic crisis and (im)possible changes’, Lithuanian Foreign Policy Review 26, 2011, p. 93. 77 Interview R30. 78 Interview R30; interview R35. LATVIA AND THE EUROPEAN UNION 181

and Farmers March 2009 – Oc- Dombrovkis I govern- - New Era Party Valdis Dom- tober 2010 ment - For Fatherland and brovkis Freedom/LNNK - People’s Party - Union of Greens and Farmers - Civic Union November 2010 – Dombrovkis II govern- - Unity Valdis Dom- July 2011 ment - Union of Greens and brovkis Farmers October 2011 - Dombrovkis III gov- - Unity Valdis Dom- ernment - Zatler’s Reform Party brovkis - National Alliance

6.2.4 Europeanisation of Latvian politics Attitudes of the main political parties towards the European Union All Latvian governments since independence can be classified as pro-EU.79 None of the parties in the Saeima in the past two decades can be regarded as eurosceptic. However, EU topics have never truly dominated election campaigns or party programmes.80 EU topics do not get debated in the Saeima very often. There is an annual debate on Foreign Affairs and European Affairs which has become much more serious in the past years and during which many parliamentarians get a say.81 Other issues are covered in the European Affairs committee, but seldom reach all the members of the Saeima.82 The ratification of the Lisbon Treaty did not get covered in the Saeima, for example.83 The fiscal compact did, during the spring of 2012.84 As mentioned above, party programmes do not pay much attention to EU affairs. During the election campaigns of 2002, when accession talks had almost been finalised, party programmes only briefly touched upon EU topics such as conditions for Latvian farmers, production quotas and EU structural funds.85 The EU is foremost regarded as a source of funding by the political parties.86 Party programmes from 2006 onwards show that many national politi-

79 D. Akule, ‘The Europeanization of Latvia: Becoming good Europeans?’, retrieved from: http://www.providus.lv/public/27143.html, consulted on 6 June 2012, p. 1. 80 Ibid., p. 1. 81 Interview R45. 82 Ibid. 83 Interview R30. 84 Interview R35. 85 D. Akule, ‘The Europeanization of Latvia: Becoming good Europeans?’, retrieved from: http://www.providus.lv/public/27143.html, consulted on 6 June 2012, p. 1. 86 Ibid., p. 5. 182 POLITICS

cians like to use Brussels as a scapegoat or a place where Latvia can ask for money.87 Howev- er, in recent years, many parties have integrated EU affairs into their party programmes, usually in the Foreign Affairs sections.88 Parties have developed their thinking and have gained experience, for example by having a member in the European Parliament or by being part of the bigger European political parties or alliances. The current coalition is very pro-EU.89 Unity and Zatlers’ Reform Party can be regarded as strong proponents. The National Alliance is more eurocritical. With regard to the opposition: the Union of Greens and Farmers has not changed its stance on the EU for many years. Concord Centre, the largest opposition party, does not oppose the EU as such, but they are against rushed accession to the Eurozone and the fiscal compact, since it will limit the sovereignty of the country.90 Even though there is an EU-minded majority in the parliament, all parties are rather reluctant towards further integration, especially in times of crises.91

Clashes between European and national politics There are three apparent issues where European and national politics clashed hard in recent years: the rights of the homosexual minority, the status of non-citizens in Latvia and the CAP.92 When the Latvian parliament amended the labour law in 2006, it did not include sexual orientation in its anti-discrimination provisions. This was a severe violation of the EU’s Em- ployment Equality Directive (EU 2007/78 EC) and Latvia therefore risked a large fine from the European Commission as the only EU member violating this directive.93 There were 46 votes in favour of including sexual orientation in its anti-discrimination provisions (out of 100 seats in the Saeima), including votes from the ruling People’s Party and the New Era Party, and from the opposition Concord Centre.94 A member of the Christian Conservative LLP said that an amendment to the labour law would ‘open the gate for paedophilia, pederasty, bestiali- ty and other forms of perversion’.95 Other members of the party called homosexuality a sin and homosexual people degenerated.96 These sounds alarmed both national and international NGOs.97 President Vike-Freiberga reacted by sending the law back to the Saeima, asking it to bring it in line with EU standards. Under this pressure, a ban on discrimination on grounds of

87 Ibid., p. 5. 88 Interview R45. 89 Interview R59; interview R45; interview R30. 90 Interview R45. 91 Interview R30. 92 D. Akule, ‘The Europeanization of Latvia: Becoming good Europeans?’, retrieved from: http://www.providus.lv/public/27143.html, consulted on 6 June 2012, p. 5. 93 Ibid., p. 5. 94 Ibid., p. 5. 95 Ibid., p. 5. 96 Ibid., p. 5. 97 Ibid., p. 5. LATVIA AND THE EUROPEAN UNION 183 sexual orientation was included in the law in September 2006.98 Another issue where national and European points of view are in conflict is the status of non-citizens in Latvia. Non-citizens in Latvia need to go through a long naturalisation procedure before they can get citizenship. Until then, they have no political rights. Until January 2007 they could not travel to other EU countries without a visa. Directive 2003/109/EC on third-country nationals stipulates, among other things, that after five years of legal residence a third country national receives many more rights and even equal treatment with regard to access to employment, employment conditions, education etc. Nonetheless, Latvia has chosen to keep the criteria of a Latvian language test and the large amount of paperwork have stayed the same.99 Then-President Vike-Freiberga criticised this decision of the government, but the Saeima disregarded the criticism and left the law in place.100 For the moment, the EU cannot do anything about it. The Commission can only intervene if Member States breach EU law.101 Even though many Russian or stateless citizens residing in Latvia still do not have equal rights compared to Latvians, the naturalisation procedure has become more loose under pressure from the EU and several NGOs.102 Furthermore, expert interviews with regard to clashing European and national policies pointed to the current system of subsidies within the CAP.103 There is much discontent about the distribution of payments as it is now: most Latvians find the EU’s policies unequal and unfair.

6.2.5 Political empowerment of women in Latvia The Global Gender Gap Report of 2011 ranks Latvia 19th on its Global Gender Gap Index.104 In the upper-middle income ranking, Latvia even ranks second, right after South Africa.105 Latvia is the only ‘new’ EU Member State in the general top 20. Other European countries in the top 20 are Finland, Sweden, Ireland, Denmark, Germany, Spain, Belgium and the Nether- lands. The reason for its loss of one place (Latvia ranked 18th in last years’ index) is the country’s deterioration in the political empowerment sub-index. According to the report, Latvia ranks 55th regarding the amount of women in parliament and 49th regarding women in ministerial positions. Furthermore, Latvia ranks 11th regarding years with a female head of state in

98 Ibid., p. 6. 99 Ibid., p. 6. 100 Ibid., p. 7. 101 Ibid., p. 7. 102 Ibid., p. 7. 103 Interview D07; interview R20; interview R35; interview R45. 104 World Economic Forum, ‘The Global Gender Gap Report 2011’, retrieved from: http://www.uis.unesco.org/Library/Documents/global-gender-gap-report-education-2011-en.pdf, consulted on 6 June 2012, p. 16. 105 Ibid., p. 22. 184 POLITICS

the past 50 years.106

6.2.6 Recent topics of debate Economic crisis The Baltic states were hit hard during the economic crisis between 2008 and 2010. Especially Latvia had to implement severe fiscal consolidation measures that heavily impacted the country. Its banking system was also severely hit, and the government had to take a loan worth 7.5 billion euros from international partners in order to tackle these combined problems.107 (More on Latvia’s response to the economic crisis in section 7.3.) Dudzi0sk argues that the economic problems in Latvia have created favourable conditions for the current political system, decreasing the cleavages between different political parties.108 During the economic crisis and its aftermath, Latvia saw four governments and five elections (local, European Parliament, state presidency and two parliamentary elections). The political party programmes were adjusted accordingly, focusing less on ethnic politics and more on socio-economic development and social issues in general.109 Concord Centre in particular has portrayed itself as an answer to the strict austerity politics of the centre-right parties.110 This might explain why it also attracted ethnic Latvians in recent years.111 Generally speaking, it can be argued that Latvian politics have become a little more stable during the crisis, which can for a certain part be attributed to the fact that Dombrovskis has been PM of three subsequent governments.112 He has turned out to be the ‘boring bookkeeper’ Latvia needed to get the country out of the crisis.113 Even though Latvia was hit hard by the crisis, there is no debate about joining the Euro- zone at all.114 Joining the euro is one of the main objectives of the Latvian government and it will do everything possible to live up to the Maastricht criteria.115 It is unlikely that the government will initiate any debate on whether the euro will be beneficial to the country; this is taken for granted and everyone is committed to joining, regardless of what is happening in the Eurozone.116 Latvia’s efforts towards introducing the euro are discussed in more detail on page 260.

106 Ibid., p. 18. 107 Nrc.nl, ‘Nieuwe Premier voor Letland in crisis’, retrieved from: http://vorige.nrc.nl/buitenland/article2163877.ece/Nieuwe_premier_voor_Letland_in_crisis, consulted on 7 June 2012. 108 K. Dudzi0ska, ‘Latvia: the economic crisis and (im)possible changes’, retrieved from: http://www.lfpr.lt/uploads/File/2011-26/Dudzinska.pdf, consulted on 7 June 2012, p. 85. 109 Ibid., p. 96. 110 Interview R30; interview R35. 111 Ibid., p. 97. 112 Ibid., p. 97. 113 Interview R35. 114 Interview R30. 115 Ibid. 116 Ibid. LATVIA AND THE EUROPEAN UNION 185

Language referendum A citizen initiative organised in November 2011 gathered 187 378 signatures in favour of constitutional amendments that would make Russian an official state language, just like Lat- vian. This forced the topic to be discussed in the Saeima. On 22 December 2011, pro-Russian group Dzimt# Valoda proposed to make Russian the second official language in Latvia. This proposal was easily defeated in the Saeima: 60 MPs voted against it, no one voted in favour and one person abstained.117 The vote in the Saeima had only been a formality, because one of the paragraphs of the Latvian constitution establishes Latvian as a state language, and constitutional provisions can only be amended through a referendum.118 After the defeat in the Saeima, sympathisers gathered signatures to overturn the decision and force a referendum on the issue.119 Prior to the referendum, Prime Minister Dombrovskis and other political leaders called on voters to reject the proposal. The referendum took place on 18 February 2012 and the turnout exceeded the expectations: 70% came out to vote.120 The proponents of making Russian Latvia’s second official language were defeated once again. Approximately 75 % of the votes were negative.121 One of the explanations for this result is that the Latvian language is still cherished by the Latvians as a symbol of freedom after the Russian dominance during Soviet times.122 It is regarded as the traditional, national language and should therefore not be touched.123 Also, many Latvians are afraid that if the Russian language would get an official status, Latvia will become part of Russia again. In the words of one observer: ‘[t]his will be the end of Latvia, it will become Russian again. Not one Russian will speak Latvian anymore. [The next] day you will see that no one ever does anything in Latvian […] and then we will return to the situation of the Soviet Union’.124 Combining the two languages is regarded as a dangerous situation by many Latvians.125 Another reason might be the fact that a large part of the Russian-speaking minority does not have Latvian citizenship and can therefore not vote. Russia was quick to condemn the referendum, mentioning that 319 000 ethnic Russians were not allowed to vote, even though many of them have lived in Latvia their whole lives.126 The Russian Ministry of Foreign Af-

117 A. Straumanis, ‘Saeima stops bill to make Russian official; issue heads to referendum’, retrieved from: http://latviansonline.com/news/article/7889/, consulted on 7 June 2012. 118 Ibid. 119 Ibid. 120 Nu.nl, ‘Letland verwerpt Russisch als tweede taal’, retrieved from: http://www.nu.nl/buitenland/2744527/letland-verwerpt-russisch-als-tweede-taal.html, consulted on 7 June 2012. 121 A. Straumanis, ‘Voters slam Russian as state language; referendum turnout sets records’, retrieved from: http://latviansonline.com/news/article/8011/, consulted on 7 June 2012. 122 Nu.nl, ‘Letland verwerpt Russisch als tweede taal’, retrieved from: http://www.nu.nl/buitenland/2744527/letland-verwerpt-russisch-als-tweede-taal.html, consulted on 7 June 2012. 123 Interview D07. 124 Interview R35. 125 Interview D07. 126 Nu.nl, ‘Letland verwerpt Russisch als tweede taal’, retrieved from: http://www.nu.nl/buitenland/2744527/letland-verwerpt-russisch-als-tweede-taal.html, consulted on 7 June 2012. 186 POLITICS

fairs’ reaction was that the result of the referendum did not reflect the national feelings at all.127 Vladimir Linderman, who publishes in Latvia as well as in Russia, and who is a non- citizen of Latvia, was one of the organisers of the referendum. He emphasised that the referendum would not be the end; it only served as the opening of a long dialogue.128 In different analyses, the language referendum was regarded as a proof of the continued presence and pressure of Russia on the country.129 For more information on the cultural backgrounds of the referendum, please refer to section 4.3.4.

Paying for a referendum The fact that constitutional issues such as the one mentioned above become the subject of a referendum relatively easy in Latvia, can be explained by the procedure: to initiate a referendum citizens only have to go through a very simple, two-step procedure and initiators only pay for the collection of the first 10000 signatures.130 The ruling coalition is having talks about making the initiators pay for the whole process, since the country cannot afford the current process anymore. However, it has been suggested that the amount of referenda is not necessarily the problem; the topics are.131 One of our respondents said: ‘in which country in the world do you have to go twice a year to vote for a country’s existence, survival […] referenda should be on other issues’.132 The Speaker of the Saeima dismisses criticism that the coalition is trying to restrict the possibility of calling for a national vote.133

6.3 Latvia’s foreign affairs

Latvia’s foreign goals are all related to creating a better and safer environment for all Latvia’s citizens.134 This includes reaching a higher level of welfare for the citizens, thereby looking to Western-oriented actors like the EU, NATO, OSCE, UN and WTO. Latvia’s main goals in a global context concern further integration into the EU establishment, including joining the Eurozone by 2014, to maintain an effective transatlantic link which is considered to be of extreme importance for Europe; and to create a friendly and beneficial relationship with its

127 Nu.nl, ‘Letland verwerpt Russisch als tweede taal’, retrieved from: http://www.nu.nl/buitenland/2744527/letland-verwerpt-russisch-als-tweede-taal.html, consulted on 7 June 2012. 128 Ibid. 129 Interview R30. 130 Baltic News Network, ‘Saeima speaker: initiators to pay for referendums themselves’, retrieved from: http://bnn-news.com/Saeima-speaker-initiators-pay-referendums-55192, consulted on 7 June 2012. 131 Interview R35; interview R63. 132 Interview R35. 133 Baltic News Network, ‘Saeima speaker: initiators to pay for referendums themselves’, retrieved from: http://bnn-news.com/Saeima-speaker-initiators-pay-referendums-55192, consulted on 7 June 2012. 134 Interview R73. LATVIA AND THE EUROPEAN UNION 187 neighbour, Russia.135 Latvian embassies around the world have two foreign policy objectives which stand out compared to most other countries: ‘to enhance national and public security, reducing direct military threats, and to strengthen national identity by popularising the country’s image and providing support for the Latvian diaspora.’136 Several areas of action have been formulated in order to achieve these objectives: ‘strengthening national security; enhancing the competitiveness of the Baltic Sea region (under the regional policy); strengthening the unity and competitiveness of the European Union; and strengthening Latvia’s relations with third countries, especially its relations with Russia, Moldova and Georgia’, since it is believed that these countries need help in their process of democratisation and in creating a modern and prosperous state.137

6.3.1 Latvian-Russian struggles

Diplomatic relations with Russia after Latvian independence The special relationship that Russia and Latvia enjoy cannot be understood without putting it into context with of more than 80 years of conflict.138 Latvia’s foreign goal was reintegration into the Western community, while Russia struggled with seeking its identity in a post- communist world which it lost by the dissolution of the USSR.139 Latvian-Russian relations during the early 1990s were characterised by a lack of a comprehensive vision in the mid- and long term perspective.140 During the mid-1990s, Latvia’s objective was ‘to maintain normal bilateral relations with the Russian Federation. They must be based on norms of international rights, international obligations and mutually beneficial cooperation.’141 Russia, however, maintained a Soviet- type foreign policy which meant that any attempts made by Western countries and organisations to support Latvia in any way were considered to be an insult to the Russian nation.142 Latvia and other countries surrounding the Baltic Sea have been cooperating in organisations such as the Council of the Baltic States and the Nordic Baltic Eight and several joint Baltic projects. Russia is also a partner in these organisations, in which they proved to be a

135 Interview R12; interview R62; interview R73. 136 Ministry of Foreign Affairs of the Republic of Latvia, ‘Latvia’s Foreign Policy Guidelines 2006-2010’, retrieved from: http://www.mfa.gov.lv/en/policy/guidlines/#4, consulted on 10 April 2012. 137 Interview R73. 138 Z. Ozolina & A. Rikveilis, (2006) ‘Latvian and Russian Foreign Policy: Bound by a Post-Soviet Heritage’, in: N. Muznieks ed., Latvian-Russian Relations: Domestic and International Dimensions, Riga: Latvian University 2006, p. 87. 139 Ibid., pp. 87-88. 140 Ibid., p. 88. 141 Ministry of Foreign Affairs of the Republic of Latvia, ‘Foreign Policy Concept of Latvia 1995-2005’, retrieved from: www.am.gov.lv, consulted on 14 March 2012. 142 Z. Ozolina & A. Rikveilis, ‘Latvian and Russian Foreign Policy: Bound by a Post-Soviet Heritage’, in: N. Muznieks ed., Latvian-Russian Relations: Domestic and International Dimensions, Riga: Latvian University 2006, p. 89. 188 POLITICS

good and friendly partner.143 Therefore, regional initiatives must be seen as an ‘opportunity to promote cooperation with that country.’144 Russia’s objective of playing a dominant role in the international scene makes Latvia rely even more on the EU and NATO. Their relationship has also been strained by the viewpoints both countries have on their common history: Russian unwillingness to take responsibility for what it has done during Soviet occupation and Latvian efforts to rewrite history (according to the Russians) still pose problems for improving bilateral relations.145 To this day, both countries clearly have a different perception of the history they share.146 According to some, differences in perceptions and values regarding the Baltic-Russian past are still present in Latvi- an society. This creates different historical perceptions between the two countries, which often leads to diplomatic troubles.147 For instance, the recently held referendum on making Rus- sian an official language in Latvia, received criticism from the ambassador of the Russian Federation. He raised questions about the legitimacy of the referendum on constitutional amendments.148 In response, the Latvian Ministry of Foreign Affairs stated that the results were clear and that a referendum was the best way to consult the Latvian people regarding this issue.149 Relations between the two countries are not only influenced by Latvia’s membership of NATO and the EU, but also by several bilateral issues. The purpose of bilateral agreements that have been signed is to create a ‘political dialogue and meetings of government officials at the national and local government level; cooperation among ministries and other governmental institutions; and creating economic cooperation.’150 The legal framework of relations between the two countries is currently based on approximately 30 intergovernmental agreements. For instance, agreements have been signed regarding cooperation in the fields of fishery, transfer of sentenced persons, customs border posts, communications, social security and tourism.151 Creating and sustaining a friendly relation-

143 Interview R73. 144 Ministry of Foreign Affairs of the Republic of Latvia, ‘Latvia’s Foreign Policy Guidelines 2006-2010’, retrieved from: http://www.mfa.gov.lv/en/policy/guidlines/, consulted on 14 March 2012. 71 Z. Ozolina & A. Rikveilis, ‘Latvian and Russian Foreign Policy: Bound by a Post-Soviet Heritage’, in: N. Muznieks ed., Latvian-Russian Relations: Domestic and International Dimensions, Riga: Latvian University 2006, pp. 92, 97. 146 Interview R62. 147 Interview R73. 148 OSCE, ‘PC.DEL/170/12 2 March 2012’, retrieved from: http://www.osce.org/pc/88763, consulted on 9 April 2012. 149 Interview R73. 150 A. Lulle, Cross-border Cooperation Between Latvia and Russia: Obstacles and Opportunities, in Latvian- Russian Relations: Domestic and International Dimensions, eds. Nils Muiznieks, Riga: Latvian University 2006, p. 141; Ministry of Foreign Affairs of the Republic of Latvia, ‘Relations between Latvia and Russia’, retrieved from: http://www.am.gov.lv/en/moscow/Latvia-Russia/, consulted on 15 March 2012. 151 Ministry of Foreign Affairs of the Republic of Latvia, ‘Bilateral agreements’, retrieved from: http://www.am.gov.lv/en/moscow/Latvia- Rus- sia/bilateral/?mode=out&state=RUS&title=&branch=0&day1=dd%2Fmm%2Fyyyy&day2=dd%2Fmm%2Fyyyy LATVIA AND THE EUROPEAN UNION 189 ship between the two countries depends on the opportunities the two are prepared to give to one another. The Latvians claim to be more than willing to accept every opportunity given by Russia to create a friendlier environment between the two.152 However, some believe that under Vladimir Putin a revival of anti-Baltic sentiments will become familiar again in Russian politics.153

Dealing with the past When Gorbachev, former Secretary-General of the USSR, introduced the ideas of glasnost (openness, transparency) and perestroika (reform politics) in 1985, public attention in Latvia focussed on the atrocities committed on Latvian territory under Soviet rule.154 Censorship about this particular subject was finally lifted after 45 years of occupation and oppression. Glasnost and perestroika made the Latvians more aware of the circumstances under which they were handed over by Nazi Germany to the Soviet Union in the Molotov-Ribbentrop pact. This created separatist agendas in the Baltic states.155 After declaring independence on 4 May 1990, Latvia reinstated the 1922 Latvian constitution, which meant that citizenship was awarded automatically to all citizens of Latvia prior to 1940 and their descendants, leaving the large group of Russians residing on Latvian territory stateless.156 A deep division was created between the Russian-speaking community and the Latvians. If these stateless citizens wanted to become Latvian, they were obligated to pass a language test and take a civic history exam. Furthermore, only a limited number of Russians residing in Latvia were allowed to take this exam each year. Under pressure of the EU and the Council of Europe, Latvian authorities withdrew the ‘quota’ system and awarded citizenship to stateless children who were born after Latvia’s independence.157 Nonetheless, a considerable number of Russian-speaking Latvians remained stateless and could not exercise the political and social rights that other Latvians could enjoy, such as the right to vote or to hold certain positions in local and national governments.

Russian citizens in Latvia Another obstacle between the two countries became clear right after the fall of the Soviet Un- ion. For the Russians, the former members of the Russian military and its pensioners consti- tuted an intrinsic focus of Russian foreign policy shortly after the Soviet Union’s break-up.158

&status=0&day3=dd%2Fmm%2Fyyyy&signer=, consulted on 15 March 2012. 152 Interview R73. 153 Interview R62; interview R73. 154 T. Sherlock, ‘Baltic History and Soviet Empire: Recovering the Past in Soviet and Russian Historical Dis- course‘, Ab Imperio, 2002, pp. 391-392. 155 Ibid., pp. 391-392. 156 M. Solska, ‘Citizenship, Collective Identity and the international Impact on Integration Policy in Estonia, Latvia and Lithuania’, Europe-Asia Studies, 63(6), 2002, p. 1095. 157 Ibid., p. 1095; interview R30. 158 M.A. Cichock, ‘Interdependence and manipulation in the Russian-Baltic relationship: 1993-97’, Journal of Baltic Studies, 30(2), 1999, p.93. 190 POLITICS

Russian concerns were targeted at gaining social and economic concessions for this group in Latvia because the Russian job market and housing stock were severely strained during the economically harsh times in the early and mid-1990s.159 Russia used the presence of its troops in Latvia as a bargaining tool in its negotiations with the Latvian authorities.160 If Russian demands were not met, military force was deemed justifiable in protecting Russian interests.161 This tactic showed to be extremely fruitful when one considers the fact that Germany pledged millions of dollars to Russia for housing this large group of ethnic Russians in Latvia and even in parts of Russia.162 Germany’s Ostpolitik was aimed at creating a safer eastern European environment and the country was right in the middle of a transition process itself.163 They believed that it was important to create a buffer zone between themselves and a possible post-Cold War Russian threat.164 When Russia finally withdrew its soldiers, it did not change the Russian view on the significance of Latvia, but instead changed the means by which Russian policy was to be accomplished.165 Russia attempted to block Latvian EU and NATO accession, which will be discussed in greater detail below. Since the late 1990s public controversies about the status of Russians residing in Latvia have gradually lessened in frequency and intensity.166 Several factors have contributed to a gradual lessening of tensions: the total number of Russians living in Latvia has declined, because a vast number of Russians has migrated back to Russia and others have integrated into Latvian society. Another factor is the move away from loud but largely rhetorical support for Russians in the ‘near abroad’ by Russian authorities and towards funding practical initiatives; for example, promoting the continued use of the Russian language in Latvian society.167 However, the large Russian minority in Latvia still faces difficulties in obtaining the social and political rights that Latvians do enjoy. In February 2012 a referendum was held in which Latvian citizens could express their opinion about making Russian an official language in Latvia. The outcome of the referendum was highly disappointing for the Russian minority: the proposal was rejected by 75 % of all votes.168

159 Ibid., p. 93. 160 Ibid., pp. 95-96. 161 Ibid., p. 91. 162 C. Spohr Readman, Germany and the Baltic Problem After the Cold War: The development of a New Ostpoli- tik 1989-2000, London: Routledge 2004, p. 175. 163 Ibid., pp. 162-163. 164 Ibid., p. 159. 165 M.A. Cichock, ‘Interdependence and manipulation in the Russian-Baltic relationship: 1993-97’, Journal of Baltic Studies, 30(2), 1999, p. 101. 166 M.A. Smith, Russia and NATO since 1991: From Cold War through cold peace to partnership, London: New York 2006, p. 48. 167 Ibid., pp. 48-49. 168 World Elections, ‘Latvian language referendum 2012’, retrieved from: http://welections.wordpress.com/2012/02/20/latvian-language-referendum-2012/, consulted on 3 March 2012. LATVIA AND THE EUROPEAN UNION 191

Border disputes Another goal of Russian foreign policy in the 1990s was the settlement of border disputes with the Baltic states. Most of the borders between Latvia and Russia were not under dispute, but the Abrene District was the main reason the two countries were not able to agree on a border treaty.169 The Soviet Union did not respect Latvia’s sovereignty, which did not only apply to Abrene as a component of Latvia, but also to Latvia as a whole.170 The independence declaration reinstated the 1922 constitution, which stated that Latvia’s territory is determined in international agreements. Moreover, Article 3(9) of the declaration states that relations with Russia will be based on the peace treaty of 1920 in which Russia acknowledges Latvian borders.171 This created a political problem, because the border between Latvia and Russia, especially the Abrene District, was not the same as it had been between 1920 and 1940.172 Russia seized this opportunity to stop Latvia from joining NATO and other international organisations.173According to NATO and EU accession criteria, candidate Member States must ‘adhere to democratic principles and procedures, and must resolve any outstanding border disputes with their neighbours’.174 Latvia and Estonia, unlike Lithuania, were not able to sign formal border treaties with Russia until 27 March 2007. However, the consensus in Lat- via is that the length of these negotiations is quite common at an international level.175 Latvia for instance has not yet signed a border agreement with Lithuania with regard to their sea borders.176 Russia delayed these negotiations expecting that NATO and the EU would not accept Latvia and Estonia if they had not settled their external territorial disputes.177 NATO and the EU, however, granted Latvia membership despite the border dispute with Russia, for reasons elaborated in greater detail below.

6.3.2 Latvian membership of NATO Since its independence, Latvia has become a member of the NATO, UN, the CoE and the EU. During its independence struggle with Soviet Russia, the Latvians gained support from several members of these organisations, more specifically East-Germany, Sweden and the United States of America.178 The Baltics’ overarching concerns with their economic, military and

169 T. Rostoks, ‘The Border issue’, in: N. Muiznieks ed., Latvian-Russian Relations: Domestic and International Dimensions, Riga: Latvian University 2006, p. 131. 170 Ibid., p. 132. 21 Ibid., p. 132. 172 Ibid., pp. 133-134. 173 Ibid., p. 135. 174 M. Kramer, ‘NATO, the Baltic States and Russia: A Framework for Sustainable Enlargement’, International Affairs, 78(4), 2002, p. 736. 175 Interview R02; interview R12. 176 Interview R02. 177 M. Kramer, ‘NATO, the Baltic States and Russia: A Framework for Sustainable Enlargement’, International Affairs, 78(4), 2002, p. 742. 178 Ministry of Foreign Affairs of the Republic of Latvia, ‘Address at the Swedish Riksdag’, retrieved from: 192 POLITICS

human rights security has led them to pursue membership of these organisations, as a security guarantee against a possibly hostile Russia.179 They were the first former Soviet states to declare an interest in joining both NATO and the EU.180 The Baltic states are also the only former Soviet republics which were never a member of the Commonwealth of Independent States (CIS), an organisation that was set up by former president of the Russian Federation Boris Yeltsin.181 Russia, the main successor of the Soviet Union, considered the Baltics as a part of Rus- sian territory and refused to allow Latvia to become a member of these ‘Western’ organisations. Russia’s hard rhetoric against Latvian membership of NATO during the 1990s can be seen as Russian unwillingness to accept the loss of its influence over the region.182 Since Lat- via broke free from Soviet rule, Russia has not only refused to atone for the crimes committed in Latvia during the occupation, but also failed to even acknowledge them.183 When combining the slow and often uncertain transition to democracy in Russia and its hostile rhetoric against Latvia, it is no surprise that former communist satellite states in eastern Europe have been eager to join NATO and gain its protection. Latvian membership was aimed at containing Russia, and Latvia has sought to make certain that NATO could help contain threats that might arise from Russian instability. While experts disagree about the level of specific threats, Russia still poses a security issue to Latvia.184 For instance, Russian military exercises near Latvia’s border have increased in recent times. The Russian attitude towards Latvia is still regarded with concern and Latvia’s military establishment is taking into account worst-case scenarios that might arise in the future.185 Possible threats for Latvia in the future do not concern military attacks or an invasion by Russia. However, specific threats coming from Russia are recognised, which are also mentioned in the NATO Security Strategy. These threats consist of energy security, controlled media which influences large groups of people, cyber attacks, terrorism, and territory defence.186

http://www.am.gov.lv/en/stockholm/state-visit/address-at-the-swedish-riksdag/, consulted on 9 April 2012. 179 M.A. Cichock, ‘Interdependence and manipulation in the Russian-Baltic relationship: 1993-97’, Journal of Baltic Studies, 30(2), 1999, p. 89. 180 M.A. Smith, Russia and NATO since 1991: From Cold War through cold peace to partnership, London: New York 2006, p. 47. 181 Global Security.org, ‘Commonwealth of Independent States, retrieved from: http://www.globalsecurity.org/military/world/int/cis.htm, consulted on 9 April 2012 182 M.A. Cichock, ‘Interdependence and manipulation in the Russian-Baltic relationship: 1993-97’, Journal of Baltic Studies, 30(2), 1999, p. 89. 183 T. Sherlock, ‘Baltic History and Soviet Empire: Recovering the Past in Soviet and Russian Historical Dis- course’, Ab Imperio, 2002, p. 415. 184 A. Braun, NATO-Russia Relations in the Twenty-First Century, London:Routledge 2008, p. 62; interview R12; interview R62. 185 Interview R12; interview R62. 186 Interview R12; interview R62. LATVIA AND THE EUROPEAN UNION 193

Western arguments for Baltic NATO-membership Western eagerness to expand east was publicly justified by its architects (the United States and West-Germany), primarily as a formula for bringing stability in post-communist eastern and central Europe.187 But this policy served two other goals as well: to salve Western guilt over having done so little to help small countries as they endured decades of communist tyr- anny; and to contain post-communist Russia to ensure that it could never again begin to amass the influence its Soviet predecessor wielded for several decades.188 However, NATO did not want to aggravate already tense relations with Russia in the early and mid-1990s. It therefore did not actively support Latvia in joining the organisation. NATO could not risk jeopardizing its relations with Russia, because it still considered Russia as a big international player.189 In the end, Latvia joined NATO on 29 March 2004 together with the other Baltic states. It has to be mentioned that it was not naturally given that all three Baltic states would become NATO member simultaneously; Latvia and Estonia were lagging behind in fulfilling the membership criteria.190 However, both governments feared that if all three Baltic states would not become NATO member simultaneously, Russia would seize the opportunity to prevent Latvia from joining NATO, like it did in Georgia.191 Several arguments other than spreading democracy and prosperity in eastern Europe were mentioned regarding the ‘big bang’ accession of eastern and central European states to NATO.192 NATO membership of the Baltic states was considered to be of extreme importance to the security of western European countries, since the Baltic states, together with Poland, were viewed as some sort of buffer zone between them and a possibly hostile Rus- sia.193 Another reason for Baltic NATO membership was that the Russian-speaking minority that lived there would be sufficiently protected against any discriminatory measures taken by the Baltic states.194 NATO’s third argument for accepting the Baltic states as members was the military cooperation in which Latvia cooperated with non-NATO members Sweden and Finland, which showed that Latvia had the intention to create friendly relations with its neighbours.195

Russian grounds for condemning Baltic NATO membership As mentioned above, during the 1990s and the 2000s, NATO’s enlargement towards former Soviet satellite states such as Latvia was not accepted by Russia, since Russia had been prom-

187 A. Braun, NATO-Russia Relations in the Twenty-First Century, London: Routledge 2008, p. 62. 188 Ibid., p. 32. 189 Ibid., p. 72. 190 Interview R02. 191 Interview R12. 192 M.A. Smith, Russia and NATO since 1991: From Cold War through cold peace to partnership, London: New York 2006, p. 100. 193 Interview R12. 194 Ibid. 195 Ibid. 194 POLITICS

ised by NATO that the Atlantic organisation would not enlarge eastwards.196 Russia was determined to keep out any international organisation or institution of former Soviet territory and would reserve the right to conduct ‘peacekeeping and other military operations’ in the Baltics if necessary.197 NATO’s eastward movement would result in a loss of authority for Russia in the regional balance of power.198 Latvian integration with western European alliances, according to some Russian views, would push Russia further away from the core of European civilisation and into isolation.199 Furthermore, Russia, especially in the early and mid-1990s, saw NATO membership of former Soviet states as a military threat.200 In the 1990s and early 2000s, Russia did have the intention to invade Latvia; but it simply lacked the resources (money, military strength) to do so.201 However, some believe that the Russian- Georgian war in 2008 was a clear message from Russia to NATO that further enlargement to former Soviet satellite states would not be accepted.202 The other dilemma Russia was facing in the 1990s was that if Russia were to join these international organisations it would be seen as being equal with much smaller states, rather than being a regional player.203 Historical sentiments therefore played an important role in the Russian attitude towards NATO enlargement; it clearly felt a loss of respect and power in losing its global dominance after the collapse of the Soviet Union.204 However, foreign policy during the 1990s was above all an act of realism in acknowledging the West’s superior power resources, necessitated by Russia’s military and political disar- ray and especially by its extreme economic weakness.205 The prospect of Russia actually using its scarce military resources was therefore highly unlikely.206 When Putin became president of the Russian Federation, NATO expansion was seen as ‘Western plotting to further diminish Russia’s place in the world at a time when the country’s economic revival under Putin has been leading many to the conviction that Russia’s place as a dominant world actor should be confirmed and augmented.’207 Despite Putin’s hard line against any NATO expansion towards the East, Latvia and the other Baltic states joined the Atlantic organisation on 29 March 2004. Putin believed that not

196 Ibid. 197 M.A. Smith, Russia and NATO since 1991: From Cold War through cold peace to partnership, London: New York 2006, p. 11. 198 M.A. Cichock, ‘Interdependence and manipulation in the Russian-Baltic relationship: 1993-97’, Journal of Baltic Studies, 30(2), 1999, p. 95. 199 M.A. Smith, Russia and NATO since 1991: From Cold War through cold peace to partnership, London: New York 2006, p. 54. 200 Interview R12. 201 A. Braun, NATO-Russia Relations in the Twenty-First Century, London: Routledge 2008, p. 30. 202 Interview R12. 203 M.A. Cichock, ‘Interdependence and manipulation in the Russian-Baltic relationship: 1993-97’, Journal of Baltic Studies, 30(2), 1999, p. 95. 204 Interview R62. 205 A. Braun, NATO-Russia Relations in the Twenty-First Century, London: Routledge 2008, p. 31. 206 Cichock, Mark A. ’Interdependence and manipulation in the Russian-Baltic relationship: 1993-97’, Journal of Baltic Studies, 30(2), 1999, p. 96. 207 A. Braun, NATO-Russia Relations in the Twenty-First Century, London:Routledge 2008, p. 31. LATVIA AND THE EUROPEAN UNION 195 much could be achieved in resisting Latvian NATO membership, thereby risking damaging Russia-US relations.208 Furthermore, he saw Eastern NATO membership as an opportunity, due to the fact that respect for the rights of minorities in any NATO member state was one of the general conditions laid down for countries aspiring to join NATO. This was very advanta- geous for the large group of Russian-speaking Latvians.209 It is for this reason that the Rus- sian government under the presidency of both Yeltsin and Putin had a potential leverage over both Latvia and NATO itself, in seeking amends for alleged violations of the rights of Rus- sian-speaking Latvians.210

Latvian status in NATO Latvia applied for NATO membership on 9 May 1994, where it was awarded member state candidacy. Already in 1993 Latvia made it clear that NATO was their security guarantee in a volatile region.211 Several months before becoming a full member, ambassador Liegis, Head of the Mission of Latvia to NATO and currently a partner at the Latvian Institute for Interna- tional Affairs, stated the following about becoming a NATO member: ‘I think that essentially our expectations in becoming full members of the Alliance really relate to the basis on which NATO was established back in 1949 and it was established as we know as a collective defence organisation where the members of the organisation come to the assistance of each other and have this commitment to assist one another in the event of one of the member states of the Alliance being threatened[...]. And, as I said, the enhancement of regional stability and security I think is a value that we bring in.’212 Latvia finally joined NATO on 29 March 2004. In the early 1990s, the Baltic states decided to deepen their relations on defence matters by creating joint military projects: BALTBAT (infantry battalion), BALTRON (Baltic naval forces), BALTNET (airspace surveillance information) and BALTDEFCOL (training school for staff officers and civilians).213 Experience acquired in the course of implementing joint projects has helped the Baltic states develop political and military interoperability, and establish the culture of compromise and consensus necessary for successful cooperation within NATO, which was clearly indicated by the Atlantic organisation before applying for membership.214 Some even say that further military cooperation between the Baltic states is the best way for Latvia to move forward in order for it to take a leading role in the region.215

208 M.A. Smith, Russia and NATO since 1991: From Cold War through cold peace to partnership, London: New York 2006, p. 46. 209 Ibid., p. 46; interview R12. 210 Ibid., p. 47. 211 R.D. Asmus & R.C. Nurick, ‘NATO Enlargement and the Baltic States’, Survival, 38(2), 1996, p. 122. 212 North Atlantic Treaty Organization, ‘NATO Speeches’, retrieved from: http://www.nato.int/docu/speech/2004/s040109a.htm, consulted on 4 March 2012. 213 Ministry of Foreign Affairs of the Republic of Latvia, ’Baltic Defence Cooperation-Main Joint Projects’, retrieved from: http://www.mfa.gov.lv/en/?id=4498, consulted on 10 March 2012. 214 Ibid.; interview R02. 215 Interview R62. 196 POLITICS

Latvia has been involved in several operations since joining NATO, which have been supported by almost all of the political parties in the Saeima; the only party to oppose Latvian participation in international operations is Concord Centre. Latvian troops were sent to participate in operation Iraqi Freedom, in the ISAF mission in Afghanistan under UN mandate, and Latvian police officers were sent to train local police trainees in Kosovo. They are currently participating in several operations, ranging from sending police officers to Kosovo, also under UN mandate, to taking part in combating piracy in the Gulf of Aden. The reason Latvia participates in these international operations is historical: during the Second World War and the following Soviet occupation, a sense of isolation was born in Latvia. Participating in these operations allows them to prevent this from happening to other countries and at the same time to create friendly bilateral relations with these countries.216 All NATO member states are obligated to have a military budget of 2 % of GDP. Latvia, just like many other European NATO member states, was and still is unable to spend 2 % of its GDP on its military capabilities.217 The percentage of GDP allocated to the Ministry of Defence is approximately 1 % of GDP, instead of the demanded 2 %.218 There are plans to reach 2 % by 2020, but this will largely depend on Latvian economic growth as a whole.219

6.3.3 Regional cooperation Immediately after their renewed independence, the Baltic states recognised the importance of regional cooperation. They believed that working together was a first step in regaining their sovereignty and to further social, economic and technological modernisation in the Baltic countries.220 This was seen as a precondition for more intensive and active integration of the Baltics’ economic systems into the European and global economic and technological structures.221 Latvia became a member of a number of regional organisations, several of which will be discussed in greater detail below.

The Baltic Assembly The Baltic Assembly (BA) is an organisation which was officially founded on 8 November 1991. This organisation aims to strengthen regional co-operation between the Baltic states in relation to common issues and undertakings.222 It was originally founded to influence processes in the USSR, to represent Baltic interests, to solve common problems and to reach common goals. The necessity to create the BA was caused by the inexperience of all three

216 Ibid. 217 Interview R12; interview R62. 218 Interview R62. 219 Ibid. 220 Interview R02; interview R73. 221 B. Melnikas, ‘Integration Processes in the Baltic Region: the New Form of Regional Transformations in the European Union’, Engineering Economics, 5(60), 2008, p. 54. 222 E. Vareikis, J. +ygelyt2, ’The Eastern Baltic Subregion: Conflict and Cooperation’, Lithuanian Foreign Poli- cy Review, 7(1), 2001, p. 5. LATVIA AND THE EUROPEAN UNION 197

Baltic states in the international environment; through the BA, these states with hardly any diplomatic experience, had the opportunity to represent their interests on an international level.223 The goals that were set out at the beginning of the BA were:

‘1) the fight for the right of national self-determination and state sovereignty; 2) the restoration and strengthening of the independence of the Baltic states; 3) gradual demilitarisation of Baltic territories; 4) economic protection of the Baltic states and the formation of a common Baltic market; 5) harmonised foreign policy and foreign trade and; 6) formation of a common Baltic information system.’224

The most important achievements that the BA has reached since its foundation are: the creation of the Baltic Free Trade Agreement (BFTA) on 13 September 1993; troop withdrawal of former Red Army soldiers; integrating the Baltic states within the EU and NATO establishment; harmonising of legislation in conformity with requirements of the EU; and signing a cooperation agreement with the Benelux.225 In the 1990s, the main subjects of the documents formulated by the BA dealt with the following issues: its relations with Russia; the Baltic states’ common defence and security policy, in which the BA has been vocal in its support for tripartite military cooperation; the common action in international organisations like NATO and EU integration; and practical relations with multilateral institutions.226 In her PhD thesis, Mrs Laizane-Jurkane, the current secretary-general of the BA, states that the necessity to create a Baltic organisation was born because of persistent pressure by the Russian Federation.227 This pressure, she claims, is still present. According to Mrs Lai- zane-Jurkane, Russia still finds it difficult to accept the loss of its former satellite states. It therefore continues to have bilateral relations with all of the countries separately and not multilateral relations, by ‘offering one carrot to one member of the family and not one to the other.’228 Today the Baltic Assembly is made up of 12 to 20 deputies from each Baltic parliament, which means that every four years, after each election, each parliament can decide to form a

223 Interview R2. 224 Baltic Assembly, ‘Formation of the Baltic States’ regional organisations, 1988-1991’, retrieved from: http://www.baltasam.org/history/pre-history, consulted on 4 March 2012. 225 Baltic Assembly, ‘International inclusion, 1992-1995’, retrieved from: http://www.baltasam.org/history/international-inclusion, consulted on 4 March 2012. 226 E. Vareikis, J. +ygelyt2, ’The Eastern Baltic Subregion: Conflict and Cooperation’, Lithuanian Foreign Poli- cy Review, 7(1), 2001, p. 6. 227 Laizane-Jurkane, M. Trends in activities and development of the regional organizations of the Baltic States. Riga: University of Latvia 2007, p. 6. 228 Interview R02. 198 POLITICS

delegation of 12, 14, 18 or 20 persons.229 The BA has six committees: Legal Affairs and Se- curity Affairs; Social Affairs; Environment and Energy; Economic Affairs, Communications and Informatics; Education, Science and Culture; and Budget and Audit.230 This structure is an exact copy of that of the Nordic Council, which has influenced the Baltic Assembly to a large degree.231 It has been stated that the competence of the committees mentioned above seems to be rather minimal, as the membership of the parliamentarians in the Baltic Assembly committees and in the permanent committees of the national parliaments often do not coincide.232 A member of the Environment and Energy committee in the Latvian national parliament could be appointed in the Education, Science and Culture committee of the BA, for example, which meant that there was hardly any knowledge and feedback within these committees from the committee national members of parliament were appointed to.233 In 2008 a major change in the organisation was pushed through: now every national committee appoints it members to relevant BA committees. The Assembly committees meet twice a year and have a consultative and coordinating function.234 The BA’s annual budget is 297 148 euros. Latvia’s contribution to this is approximately 97 000 euros.235 Due to the financial crisis, the budget of the BA will not be increased until the economies of all three Baltic states have improved.236 In the beginning, Baltic cooperation failed to produce tangible results, mainly caused by having insufficient resources and a lack of political will.237 A lack of legal harmonisation and different viewpoints on the speed of privatisation and the restitution of private property hin- dered real and effective cooperation in various sector of the economy.238 With the fulfilment of all the objectives mentioned above, the Baltic Assembly seemed to lack a clearly formulated course of action for the future since the Baltic states entered the EU.239 EU membership transferred a number of issues of regional cooperation into the EU context. However, since entering the EU, the BA, advised by the Nordic Council, has formulated new goals. The energy market is the most important one and its main topics concern the allocation of an LNG terminal within the Baltic states (see section 7.8.4), and the third EU

229 Ibid. 230 Ibid. 231 Ibid. 232 A. Ribulis, Baltic parliamentary cooperation between the past and the future, Tallinn: Foreign Affairs Com- mittee of the Estonian Riigikogu 2005, p. 145. 233 Interview R02. 234 P. Van Elsuwege. From Soviet Republics to EU Member States: a Legal and Political Assessment of the Bal- tic states’ accession to the EU. Leiden: Koninklijke Brill NV 2008, p. 118. 235 Interview R02. 236 Ibid. 237 P. Van Elsuwege. From Soviet Republics to EU Member States: a Legal and Political Assessment of the Bal- tic states’ accession to the EU. Leiden: Koninklijke Brill NV 2008, p. 118. 238 Ibid., p. 119. 239 Ribulis, A. Baltic parliamentary cooperation between the past and the future, Tallinn: Foreign Affairs Com- mittee of the Estonian Riigikogu 2005, p. 137; interview R02. LATVIA AND THE EUROPEAN UNION 199

Energy Package. Other important goals are the tackling of organised crime; innovation; healthcare issues; education and science; and environment and natural resources.240 The BA’s future plans are targeted at three interests: to lobby for Baltic-Nordic interests on an EU level and to coordinate common positions; to share experience with sensitive regions like the GUAM-region (Georgia, Ukraine, Azerbaijan, Moldova); and energy and innovation issues.241 The EU has been a big advocate for regional cooperation between the Baltic states, as they believed that the promotion of regional cooperation would strengthen these countries economically against the strong competition in Western markets.242 It would give them an opportunity to develop export markets for their less competitive products. Baltic EU membership was also targeted at teaching the Baltics European democratic and liberal economic standards and values.243 The signing of the BFTA was seen as a major step towards closer (economic) relations with the EU.244 The EU operated as an influential external actor, making clear that regional cooperation by the Baltic states would advance integration into the EU.245 This facilitated further economic cooperation among the Baltic states.246 It was because of persistent pressure by the EU that trilateral cooperation was developed between the Baltic states, as it was considered a first step towards possible EU membership. In the beginning of the BA, there was a genuine fear in some Baltic states that BA activities would pose a threat to a possible EU membership. Later on it became clear that Baltic cooperation was not an alternative to EU membership, but that these efforts were parallel and intertwined.247

Cooperation with the Nordic Council The Nordic Council (NC), formed in 1952, is an organisation for parliamentary co-operation among the Nordic countries, which involves members of parliament, delegated by the five Nordic countries (Denmark, Iceland, Norway, Finland and Sweden) and three autonomous areas (Aland Islands, Faeroe Islands and Greenland).248 Each calendar year one Nordic country presides the NC. In 2012 the country holding the NC presidency is Norway. The BA and the NC have a partnership that is being continually strengthened.249 Coop-

240 Interview R02. 241 Ibid. 242 P. Van Elsuwege. From Soviet Republics to EU Member States: a Legal and Political Assessment of the Bal- tic states’ accession to the EU. Leiden: Koninklijke Brill NV 2008, p. 118. 243 Interview R02. 244 P. Van Elsuwege, From Soviet Republics to EU Member States: a Legal and Political Assessment of the Bal- tic states’ accession to the EU. Leiden: Koninklijke Brill NV 2008, p. 118. 245 Interview R02. 246 P. Van Elsuwege, From Soviet Republics to EU Member States: a Legal and Political Assessment of the Bal- tic states’ accession to the EU. Leiden: Koninklijke Brill NV 2008, p. 119. 247 Interview R02. 248 Nordic Council, ‘About the Nordic Council’, retrieved from: http://www.norden.org/en/nordic-council/the- nordic-council, consulted on 9 June 2012. 249 Nordic Council, ‘Nordic co-operation with Estonia, Latvia and Lithuania’, retrieved from: http://www.norden.org/en/about-nordic-co-operation/areas-of-co-operation/estonia-latvia-and-lithuania/nordic- co-operation-with-estonia-latvia-and-lithuania, consulted on 9 April 2012. 200 POLITICS

eration between the two covers three priorities which are based on the Guidelines for Cooper- ation 2009-2013: closer integration in the Baltic Sea region; helping to build bridges to the EU’s neighbours in the East; and promoting joint approaches to common problems in northern Europe.250 Areas of focus of these priorities include: the Baltic Sea, the environment, human trafficking, drug transit, economics and the labour market.251 To help foster this cooperation, an Action Plan has been signed between the two organisations.252 The NC and the BA agreed on cooperation in 1992. Even before the founding of the BA, the NC was a big advocate of Baltic regional cooperation. There was an impression within the EU that the Baltic states were not pro-regional oriented.253 The help that was offered by the NC meant that the BA started to develop itself according to the structure and guidelines of the NC.254 The BA has two formal agreements of cooperation with the NC, which create a legal basis for cooperation, resulting in terms of practical assistance and advice, especially in the formative stages of the BA’s work, namely the institutional set-up.255

Nordic–Baltic Eight The Nordic–Baltic Eight (NB-8) is a multilateral co-operation between eight countries, within the framework of the NC. It comprises Denmark, Iceland, Norway, Finland, Sweden, Latvia, Lithuania and Estonia. There has been on-going active cooperation within this format since the early 1990s. Under NB-8, regular meetings are held between the Baltic and Nordic countries’ prime ministers, foreign ministers, secretaries of state and political directors of foreign ministries, as well as expert consultations where regional issues and current international topics are reviewed.256 From 2008 onwards, the Baltic states were also involved in coordinating the NB-8 foreign ministry cooperation. In 2010 Latvia coordinated the cooperation among the NB-8 foreign ministries. In this capacity Latvia initiated the preparation of a comprehensive analysis and recommendation on how to advance the Nordic-Baltic cooperation. This report is yet to be finished.257 The priority of the NB-8 will be to ‘continue to build upon existing, effective and well- established cooperation in areas where further work is considered to be of mutual benefit.’258 The priority areas for Nordic Baltic cooperation 2009-2013 include: education, research and innovation; business, cluster networks and creative industries; the environment, climate and

250 Ibid. 251 Ibid.; interview R02. 252 Interview R02. 253 Ibid. 254 Ibid. 255 J. Kapustans, ’Cooperation among the Baltic States: Reality and Prospects’, retrieved from: http://www.nato.int/acad/fellow/96-98/kapustan.pdf, consulted on 9 April 2012; interview R02. 256 Ministry of Foreign Affairs of the Republic of Latvia, ‘Co-operation of Baltic and Nordic States’, retrieved from: http://www.mfa.gov.lv/en/eu/BalticSeaRegion/NordicStates/, consulted on 10 March 2012. 257 Ibid. 258 Ibid. LATVIA AND THE EUROPEAN UNION 201 energy; international challenges faced by welfare societies (e.g. combating human trafficking, developing hospital services); and cross-border regional co-operation to promote joint fundamental values (e.g. democracy, good governance and gender equality).259

The Council of the Baltic Sea States The Council of the Baltic Sea States (CBSS) is an overarching political forum for regional intergovernmental cooperation and was a response to the changes that took place in the Baltic Sea region with the end of the Cold War.260 Since its beginning, the CBSS contributed to ensuring positive developments within the Baltic Sea region and served as a driving force for multilateral cooperation. Currently, its focus lies on developing cross-national cooperation in areas such as environment, economic development, energy, education and culture.261 Its current activities consist of 11 Lighthouse Projects which are aimed at establishing projects for climate change, sustainable urban and rural development, sustainable consumption, production and innovation, and education for sustainable development. 262 It remains unclear on what levels Latvia contributes to or is being assisted by the CBSS directly, since not much information can be found when studying the literature regarding this topic. The Members of the Council are the 11 states of the Baltic Sea region as well as the Eu- ropean Commission. The member states are Denmark, Estonia, Finland, Germany, Iceland, Latvia, Lithuania, Norway, Poland, Russia and Sweden.263 The European Commission aims to participate in the CBSS’ activities and to strengthen its capacity for practical action.264 It is, however, unclear what contributions the Commission has made to the CBSS.

6.3.4 Latvia and international organisations Latvia has joined several international organisations since regaining its independence in 1991. The goal for Latvia in joining these organisations is a deeply embedded wish to finally depart from its troublesome past and its former occupier, Russia.265 By joining these organisations, Latvia has made it clear to the rest of the world that it is willing to participate in a new post- communist global environment. To many people in Latvia, joining these organisations was

259 Nordic Council of Ministers, ‘Guidelines 2009-2013’, retrieved from: http://www.norden.ee/en/about- us/guidelines-2009-2013.html, consulted on 10 March 2012. 260 Council of the Baltic Sea States, ‘History’, retrieved from: http://www.cbss.org/CBSS-The-Council/history, consulted on 10 March 2012. 261 Council of the Baltic Sea States, ‘Environment’, retrieved from: http://www.cbss.org/Environment/policy- work, consulted on 9 June 2012. 262 Council of the Baltic Sea States, ‘Environment’, retrieved from: http://www.cbss.org/Environment/baltic-21- lighthouse-projects, consulted on 10 March 2012. 263 Council of the Baltic Sea States, ‘Council’, retrieved from: http://www.cbss.org/CBSS-The-Council/the- council, consulted on 10 March 2012. 264 Council of the Baltic Sea States, ‘Cooperation’, retrieved from: http://www.cbss.org/Cooperation/cooperation, on 10 April 2012. 265 Interview R12. 202 POLITICS

considered as ‘a return to where we felt we belonged’ but also part of an identity crisis.266 Latvia’s goals are to further strengthen its relations with the countries surrounding the Baltic region. It has shown that it is capable of joining these organisations and to participate and contribute to them.267 Several of these international organisations will be discussed in greater detail below.

United Nations Immediately after its independence in 1991 Latvia applied for UN membership, which was accepted on 17 September 1991, thereby acknowledging Latvia’s commitments to the principles and values of the UN. In recent years, Latvia has been elected as a member to the UN Economic and Social Council (ECOSOC), to the Sustainable Development Commission (CSD) and to the Commis- sion on Science and Technology for Development (CSTD).268 Latvia attaches great importance to the role of ECOSOC in the economic, social, and humanitarian and human rights field, since this membership gives Latvia the opportunity to concentrate on fields where the Commission can be of great value for the country.269 In its UN-membership, Latvia strongly supports waste management, biodiversity and forestry issues and Latvia has always placed promotion of human rights among its top priorities.270 Therefore, Latvia has put forward its candidature for the Human Rights Council at the elections to be held in 2014. As a UN member, Latvia is ready to assume greater international responsibility in order to have a voice in the international scene.271 To gain more international experience, Latvia is planning to engage more actively in the work of the UN Security Council by putting forward its candidature for the non-permanent seat at the elections to be held in 2025.272 As mentioned earlier, Latvia has participated in several international missions: they were involved in the ISAF mission in Afghanistan under UN mandate; and Latvian police officers were and still are sent to train local police trainees in Kosovo, also under UN mandate.273 They are currently participating in several operations, ranging from sending police officers to Kosovo, to taking part in combating piracy in the Gulf of Aden.274

266 Ibid.; interview R62. 267 Interview R62; interview R73. 268 United Nations, ‘Latvia’, retrieved from: http://www.un.int/wcm/content/site/latvia/pid/3650, consulted on 9 April 2012. 269 Interview R73. 270 United Nations, ‘Latvia’, retrieved from: http://www.un.int/wcm/content/site/latvia/pid/3650, consulted on 9 April 2012. 271 Interview R73. 272 United Nations, ‘Member States’, retrieved from: http://www.un.int/wcm/content/site/latvia/cache/offonce/pid/3650;jsessionid=FEB377E2FCD5CA070C52AC0B F1840C0B, consulted on 10 March 2012. 273 Ministry of Foreign Affairs of the Republic of Latvia, ‘Participation in International operations’, retrieved from: http://www.am.gov.lv/en/security/Directions/InternationalOperations/, consulted on 9 June 2012. 274 Ibid. LATVIA AND THE EUROPEAN UNION 203

World Trade Organisation The World Trade Organisation’s (WTO) overriding purpose is to help trade flow as freely as possible, since this is important for economic development and well-being.275 The WTO tries to ensure that individuals, companies and countries know what the rules are in the world and to give them the confidence that sudden changes in policy will not take place. However, if there should occur some disagreements between countries, the most harmonious way to settle them is through a neutral procedure based on an agreed legal foundation, according to the WTO.276 The WTO Working Party on the Accession of Latvia had to make extensive reports about every existing sector in Latvia (eg. the telecommunications sector, sanitation and veterinary services) in order to get a clear picture of Latvia’s economy.277 The Working Party’s aim was to see if Latvia fulfilled all the criteria that were required for joining the WTO, which they eventually did on 10 February 1999, when they became a member. Latvia is now a member of several coalition groups inside the WTO: EU; Friends of Am- bition (NAMA), which seeks to maximise tariff reductions; and ‘W52’ sponsors, which is a multilateral register for protecting ‘modalities’ for wines and spirits.278 Since membership, Latvia has not been included in any disputes on a country-to-country basis. However, it has been involved in disputes where the EU was either a plaintiff, a respondent or a third party (a total of 269 cases).279

OSCE With 56 states from Europe, Central Asia and North America, the Organisation for Security and Cooperation in Europe (OSCE) is the world’s leading organisation regarding regional security and democracy promotion.280 The OSCE offers a platform to its members for political negotiations and decision-making in the fields of conflict prevention, crisis management and post-conflict rehabilitation, and also puts it into practice in the form of field missions.281 The OSCE has deployed several missions in Latvia since its independence. In 1993, the OSCE announced that support would be given to Latvia in order to ‘address citizenship is-

275 World Trade Organization, ‘Who we are’, retrieved from: http://www.wto.org/english/thewto_e/whatis_e/who_we_are_e.htm, consulted on 9 April 2012. 276 World Trade Organization,’What is the World Trade Organization?’, retrieved from: http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm, consulted on 9 April 2012. 277 World Trade Organization, ’Working Party on the Accession of Latvia: WT/ACC/LVA/32/Add.2 30 Sep- tember 1998 (98-3808)’. 278 World Trade Organization, ‘Groups in the negotiations’, retrieved from: http://www.wto.org/english/tratop_e/dda_e/negotiating_groups_e.htm, consulted on 10 March 2012. 279 World Trade Organization, ‘Latvia and the WTO’, retrieved from: http://www.wto.org/english/thewto_e/countries_e/latvia_e.htm, consulted on 10 March 2012; World Trade Or- ganization, ‘The European Union and the WTO’, retrieved from: http://www.wto.org/english/thewto_e/countries_e/european_communities_e.htm#disputes, consulted on 10 March 2012. 280 OSCE, ‘Who we are’, retrieved from: http://www.osce.org/who, consulted on 9 April 2012. 281 Ibid. 204 POLITICS

sues, to provide information and advice to institutions, organisations and individuals and to gather information and report on developments relevant to the full realisation of OSCE principles, norms and commitments.’282 The mission’s mandate expired on 31 December 2001. Since then several other missions have been deployed by the OSCE, mainly related to the observation of elections or the further implementation of the OSCE principles and norms.283 In 2011, the OSCE Office for Democratic Institutions and Human Rights opened an election observation mission to monitor the early parliamentary elections in Latvia on 17 Septem- ber. The observers concluded that although there is ‘an existence of a genuine choice between parties, the political landscape continued to be generally divided along ethnic and linguistic lines.’284 Latvian authorities, however, believe that it is not the OSCE as an organisation that is criticising Latvia’s ethnically divided society, but that Russia is using this platform to raise the issue of the Russian-speaking minority in all the Baltic states.285

European Security and Defence Policy The European Security and Defence Policy (ESDP) is an integral part of the EU Common Foreign and Security Policy (CFSP). The Saint Malo Declaration made clear that the EU must have the capacity for autonomous action, backed up by credible military forces.286 Currently, EU and NATO cooperation is based on the Berlin Plus agreement, which entails that the EU has access to capabilities of NATO.287 Latvia has participated in several ESDP missions under an EU, UN and/or NATO mandate. The missions that it participated in or still is participating in are: the Rule of Law Mis- sion in Kosovo (EURLEX); the Monitoring Mission in Georgia; the Police Mission in Af- ghanistan; the Integrated Rule of Law Mission in Iraq; the Police Mission for the Palestinian Territories; the Border Assistance Mission for the Rafah Crossing Point in Gaza-Strip; and the Border Assistance Mission to Moldova and Ukraine (EUBAM).288 The Latvian government believes it is important to continue the EU–NATO partnership in crisis management, and to ensure mutually reinforcing military capability development

282 OSCE, ‘The OSCE Mission to Latvia’, retrieved from: http://www.osce.org/node/43972, consulted on 10 March 2012. 283 OSCE, ‘Search results’, retrieved from: http://www.osce.org/search/apachesolr_search/Latvia%20elections?filters=type%3Aeom, consulted on 2 June 2012. 284 OSCE, ‘The Republic of Latvia: Early Parliamentary Elections 17 September 2011’, retrieved from: http://www.osce.org/odihr/elections/Latvia/86363, consulted on 10 March 2012. 285 Interview R73. 286 European Union Institute for International Studies,’European Security and Defence Policy’, retrieved from: http://www.eulex-kosovo.eu/training/material/docs/esdp/consilium/ESDP_10-web.pdf, consulted on 12 April 2012. 287 Ministry of Foreign Affairs of the Republic of Latvia, ‘The changed strategic situation and role of Latvia after joining NATO and EU’, retrieved from: http://www.am.gov.lv/en/copenhagen/news/latvian- news/template/?pg=10092&print=on, consulted on 10 April 2012. 288 Ministry of Foreign Affairs of the Republic of Latvia, ‘Participation in International operations’, retrieved from: http://www.mfa.gov.lv/en/security/Directions/InternationalOperations/, consulted on 10 April 2012. LATVIA AND THE EUROPEAN UNION 205 where requirements overlap.289 For instance, NATO can learn a lot from the EU’s experience regarding civilian planning missions, but the EU can learn a great deal of NATO’s military planning expertise.290 Therefore, Latvia strongly believes that EU-NATO cooperation is important for the ESDP to survive and to fulfil its full potential.291 However, overlapping functions and duplication of efforts or the creation of new structures pose real threats, which can only be resolved if both structures use each other’s know-how and capabilities.292 Another argument brought forward by the Latvian authorities concerns the EU’s complicated and difficult organisational structure and its intergovernmental approach to decision-making procedures.293 The fact that there are 27 Member States makes it difficult to agree upon a common approach to international issues.294 As a consequence, the Latvian people are losing their interest and belief in a strong ESDP policy.295 Therefore, the suggestion has been made to further integrate the two structures by offering EU Member States and NATO member states funds to start a common project within the ESDP structure.296

6.4 Towards EU membership

Latvian independence On 27 August 1991, the European Commission recognised the recently proclaimed independence of the Baltic states.297 (Latvia’s move towards independence is discussed in more detail on page 42.) On 6 September 1991, Latvia’s independence was recognised by the Soviet Un- ion as well.298 The next years were dedicated to ensuring sovereignty and freedom, and regaining democracy.299 The first free parliamentary elections were held in 1993.300 The next step was to enter into political dialogue with the rest of Europe, of which Latvia had already

289 Ministry of Foreign Affairs of the Republic of Latvia, ‘The changed strategic situation and role of Latvia after joining NATO and EU’, retrieved from: http://www.am.gov.lv/en/copenhagen/news/latvian- news/template/?pg=10092&print=on, consulted on 10 April 2012; interview R73. 290 Interview R73. 291 Interview R12. 292 Z. Ozalina, ‘European Security and Defence Policy’, in: Clive Archer ed., New Security Issues in Northern Europe: The Nordic and Baltic States and the ESDP, New York: Routledge 2008, p. 127; Ministry of Foreign Affairs of the Republic of Latvia, ‘Latvia’s Foreign Policy Guidelines 2006-2010’, retrieved from: http://www.mfa.gov.lv/en/policy/guidlines/#4, consulted on 10 April 2012; interview R73. 293 Z. Ozalina,‘European Security and Defence Policy’, in: Clive Archer ed., New Security Issues in Northern Europe: The Nordic and Baltic States and the ESDP, New York: Routledge 2008, p. 128. 294 Interview R73. 295 Interview R62; interview R73. 296 Interview R62. 297 Ministry of Foreign Affairs of the Republic of Latvia, ‘Latvia and the European Union’, retrieved from: http://www.am.gov.lv/en/eu/history/4348/#1991, consulted on 6 June 2012. 298 Ibid. 299 V. Vike-Freiberga, ‘Address by H.E. Dr. VairaVike-Freiberga, President of Latvia at International Confer- ence in Riga (Nov 11-14, 2004)’, in: SPPI,Negotiating futures - states, societies and the world -proceedings of the International Conference (Riga, November 11-14 2004;), Riga: LatvijasUniversitate 2005, p.8. 300 BBC News, ‘Latvia timeline’, retrieved from: http://news.bbc.co.uk/2/hi/europe/1108059.stm, consulted on 6 June 2012. 206 POLITICS

been a part before occupation.301

Becoming a member of international organisations Until the early 1990s, Europe had been divided into two spheres of influence, with Latvia ‘belonging’ to the Eastern part.302 When Latvia restored its independence, the political elite were quick to formulate its wish for reunification with the West, or ‘the return to Europe’.303 In line with this, Latvia announced its aspirations to join the EU, the NATO and the WTO soon after the declaration of its independence. Latvia believed that membership of these international organisations would guarantee the survival of its recently restored sovereignty and freedom.304 However, in the early post-communist years, the issue of EU accession was not one of Latvia’s external policy priorities.305 Latvia’s main concerns were achieving membership of the UN, the OSCE, the CoE and NATO, since the country was longing for ‘hard security’.306 Latvia became a member of the UN, OSCE and CoE in the next years, but due to opposition from Russia, the chance of joining NATO in the near future diminished soon. In reaction to this development, Latvia’s interest in the EU gradually increased, since it could provide a good alternative in terms of security: ‘soft security’.307 Furthermore, the Bal- tic states’ trade with the EU had more than doubled since the countries’ independence: the EU was the destination of 61 % of Latvia’s exports, while it provided for 53 % of its imports. After the Russian financial crisis in 1998, which had a damaging effect on many Latvian businesses, economic interests in the EU further increased. On top of the economic and security reasons for EU accession, there was a feeling that membership of both the EU and NATO could be a fundamental turning-point in Latvia’s history and that it would provide for long- term stability prospects, as well as a buffer against Russia.308 Many respondents mentioned that Latvia, being the small country that it is, could simply not stay independent, and that joining the EU was the ‘least evil’ option.309 Vaira Vike-Freiberga, who was President of Latvia between 1999 and 2007, actively pushed for membership of these international organisations. By the end of 1997, Latvia was

301 V. Vike-Freiberga, ‘Address by H.E. Dr. VairaVike-Freiberga, President of Latvia at International Confer- ence in Riga (Nov 11-14, 2004)’, in: SPPI, Negotiating futures - states, societies and the world -proceedings of the International Conference (Riga, November 11-14 2004), Riga: LatvijasUniversitate 2005, p.8. 302 Ibid., p.8. 303 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics, 27 (4), 2004, p. 716. 304 V. Vike-Freiberga, ‘Address by H.E. Dr. VairaVike-Freiberga, President of Latvia at International Confer- ence in Riga (Nov 11-14, 2004)’, in: SPPI, Negotiating futures - states, societies and the world -proceedings of the International Conference (Riga, November 11-14 2004), Riga: LatvijasUniversitate 2005, p.7. 305 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics, 27 (4), 2004, p. 718. 306 Ibid., p. 718. 307 Ibid., p. 718. 308 Ibid., p. 719; interview R35. 309 Interview D07; interview R35; interview R59. LATVIA AND THE EUROPEAN UNION 207 invited by the heads of the EU governments to begin negotiating their accession to the EU. Negotiations were completed in time for the Copenhagen European Council summit in De- cember 2002. Latvia received EU membership on 1 May 2004. By that time, Latvia had also joined NATO on 29 March 2004.

6.4.1 Latvia’s EU accession negotiations EU interests in an enlarged Union After the accession of Finland, Sweden and Austria in 1995, the EU started negotiations with the next 12candidate countries. The EU agreed to open the accession talks with the following six countries in December 1997: Cyprus, the Czech Republic, Estonia, Hungary, Poland and Slovenia. In December 1999 the Helsinki European Council agreed to start accession negotiations with six more countries, including Lithuania and Latvia.310 The EU’s reasons to further enlarge were both political and economical. One of the political reasons was that the eastward enlargement would (further) stimulate regional stability in Europe.311 Furthermore, enlargement would bring new experience and potential to the EU, with regard to research and development, education and culture.312 Another important reason to start negotiations with the eastern neighbours, including the Baltic states, was energy.313

EU-Latvia relationship before the accession negotiations Right after Latvia’s declaration of independence in 1991, the first agreement with the EU was signed in May 1992on trade and commercial economic cooperation, which was followed by a political declaration.314 This was followed by an important agreement on fishery in May 1993 and an agreement on Free Trade and Trade Related Matters between Latvia and the EU in the summer of 1994, which replaced the agreement of 1992.315 On 12 June 1995, Latvia and the EU signed a Europe (Association) Agreement, which formed the basis for intensified bilateral relations between Brussels and Riga.316 After the Saeima gave unanimous support to the Pres- ident’s Declaration on the Integration of Latvia into the EU in October 1995, the Latvian government submitted Latvia’s application for the accession to the European Council.317

310 F. Cameron, ‘Principles and Problems of EU Eastern Enlargement’, in: H. Hubel ed., EU Enlargement and Beyond: The Baltic States and Russia, Berlin: BERLIN VERLAG Arno Spitz GmbH 2002, p. 108. 311 L. Spaepen, ‘De Europese Unie breidt uit naar het Oosten ja, maar wanneer en hoe?’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, p. 183. 312 Ibid., p. 184. 313 Ibid., p. 184. 314 Ministry of Foreign Affairs of the Republic of Latvia, ‘Latvia and the European Union’, retrieved from: http://www.am.gov.lv/en/eu/history/4348/?print=on, consulted on 6 June 2012. 315 D. Krievane, ‘Letland en de uitbreiding van de EU: alle hoop op “het snelle spoor” ’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, p. 203. 316 Ibid., p. 204. 317 Ministry of Foreign Affairs, ‘Latvia and the European Union’, retrieved from: http://www.am.gov.lv/en/eu/history/4348/?print=on, consulted on 6 June 2012. 208 POLITICS

Main steps on Latvia’s road to accession During the accession negotiations, the EU chose to use a somewhat different strategy for the Baltics than it did for the other central and eastern European candidate Member States.318 Dif- ferences included the financial instruments and the use of ‘Europe Agreements’ instead of the usual ‘Partnership and Cooperation Agreements’.319 However, in its ‘Agenda 2000’ document, which was first presented by the Commission in July 1997, the EU gave an outline of its plans for implementation of the entire eastern enlargement.320 In the document, the EU gave its opinion on the applications of the candidate Member States and formulated pre- accession strategies, aimed at closer cooperation between the EU and the potential Member States.321 With regard to Latvia’s application, the Commission judged that the country was doing well on the political aspects of the Copenhagen criteria: it had become a stable democracy, in which human rights and minorities were generally respected.322 However, Latvia’s policy towards the non-Latvian population did not meet the human rights standards of the EU yet.323 For example, the naturalisation policy was not liberal enough,.324With regard to economic criteria, Latvia had made progress but it was not ready for competition on the EU market.325 Furthermore, Latvia had also made progress in complying with the acquis, but more changes to Latvia’s legal framework were still necessary to continue the accession negotiations.326 In July 1998, the EU divided the candidate countries into two groups, according to their capability to adjust their political, economic and judiciary systems to the EU norms.327 Latvia was one of the countries of the second group, which still required more assistance, advice and preparation, for the reasons mentioned above. The first group started their negotiations in March 1998.328 The countries in the second group were not content when they heard their

318 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics, 27 (4), 2004, p. 719. 319 Ibid., p. 719. 320 L. Spaepen, ‘De Europese Unie breidt uit naar het Oosten ja, maar wanneer en hoe?’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, p. 183. 321 D. Krievane, ‘Letland en de uitbreiding van de EU: alle hoop op “het snelle spoor” ’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, p. 205. 322 Ibid., p. 204. 323 Ibid., p. 204. 324 Interview R30. 325 D. Krievane, ‘Letland en de uitbreiding van de EU: alle hoop op “het snelle spoor” ’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, p.204. 326 Ibid., p. 204. 327 L. Spaepen, ‘De Europese Unie breidt uit naar het Oosten ja, maar wanneer en hoe?’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, p. 187. 328 Ibid., p. 188. LATVIA AND THE EUROPEAN UNION 209 negotiations would be postponed.329 Disappointment was big in Latvia at this point. In the next few months, the government evaluated their EU integration programs extensively and set new priorities in the meantime.330 They lobbied intensively in Brussels, emphasising how hard the country was working to meet the Copenhagen criteria.331 Latvia formulated 49 concrete measures in a new Action Plan, which it would take as soon as possible. It was clearly following a ‘fast track’ strategy, aiming to join the first group of accession countries at some point.332 The rush to join can be explained by history: it can be regarded as a consequence of being left out of the earlier European integration process which took place during the Cold War.333 However, it has been suggested that speed seemed to be more important than quality.334 The Latvian strategy worked: already in 1998 the Commission noticed that Latvia was working very hard.335 They even mentioned that, if things continued like this, the negotiations might be able to start at the end of 1999 already.336 In December 1999, at the Helsinki Coun- cil, the idea of the two groups was renounced. A few months later, the ten candidate countries were reunited and Latvia’s accession negotiations started. In the next few years the country would be busy with closing the 31 acquis chapters one by one, to become a full member of the EU in 2004. Before and during the accession talks, Latvia could count on support from several Nordic countries. This can be explained by the large amount of cooperation between the Baltics and the Nordic countries in many fields, as well as their shared history. 337 Latvian inter- parliamentary contacts were strongest with Denmark and Sweden.338 The Scandinavian countries also were the main supporters during the ‘fast track’ strategy mentioned earlier.339

329 Ibid., p. 188. 330 D. Krievane, ‘Letland en de uitbreiding van de EU: alle hoop op “het snelle spoor” ’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, p.204. 331 L. Spaepen, ‘De Europese Unie breidt uit naar het Oosten ja, maar wanneer en hoe?’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, p.188. 332 D. Krievane, ‘Letland en de uitbreiding van de EU: alle hoop op “het snelle spoor” ’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, p.204. 333 A. Lejins, ‘Latvia and EU enlargement’, in: H. Hubel ed.,EU Enlargement and Beyond: The Baltic States and Russia, Berlin: BERLIN VERLAG Arno Spitz GmbH 2002, p.271. 334 Interview R45. 335 D. Krievane, ‘Letland en de uitbreiding van de EU: alle hoop op “het snelle spoor” ’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, pp. 206-207. 336 Ibid., pp. 206-207. 337 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics, 27 (4), 2004, p. 719. 338 H. Grabbe, ‘A Partnership for Accession? The Implications of EU Conditionality for the Central and East European Applicants’, retrieved from: http://www.esiweb.org/enlargement/wp- content/uploads/2010/01/grabbe_conditionality_99.pdf, consulted on 6 June 2012. 339 L. Spaepen, ‘De Europese Unie breidt uit naar het Oosten ja, maar wanneer en hoe?’, in: L. Carrafiello, L. Spaepen en N. Vertongen ed., De Balten - op de tweesprong tussen Oost en West, Leuven-Apeldoorn: Garant 1999, p.188. 210 POLITICS

Transition periods During the accession talks, Latvia agreed to affirm to 35 transition periods in areas such as transport policy, tax policy, social policy and employment, agriculture and fisheries, environment and energy.340 An example is the transition period of up to seven years before free movement of labour was allowed, which the EU-15 Member States asked for. It has been said that one of the last transition periods, concerning provision of good quality (drinking) water in the entire country, lasts until 2013.341 Another remaining transition period concerns energy; for more information on this, please refer to section 7.8.1. Also, there are some acquis chapters regarding agriculture which have not been closed yet.342

6.4.2 Referendum on EU accession Once Latvia received the green light for accession, the Latvian government decided to hold a referendum on joining the EU, following the example of other post-communist candidate countries, such as Estonia.343 Consequently, the parliament amended the constitution in May 2003 to allow for referendums on international matters. The referendum was to be held in Latvia on 20 September 2003 and asked the following question: ‘Do you support membership for Latvia in the European Union?’.344 EU membership would only be valid if 50 % of the voters in the previous national elections would turn out to vote, and if more than 50 % of these voters would vote ‘Yes’ on the referendum. All in all, the decision for a referendum was rather risky, since authorities were aware of the low public support for EU accession.345 Lat- via was indeed regarded as one of the more sceptical candidate countries, but most polls in the months preceding the referendum showed an advantage for the supporters of the accession. During the campaign, support rose up to 50 %.346

Proponents and their arguments In general, there was strong cross-party and elite support in Latvia for EU accession.347 The

340 Euractiv.com, ‘Latvia: Saying ‘I do’ to Europe’, retrieved from: http://www.euractiv.com/enlargement/latvia- saying-europe/article-118228, consulted on 6 June 2012. 341 Interview R45. 342 Ibid. 343 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics 27 (4), 2004, p. 724. 344 European Parties Elections and Referendums Network, Sussex European Institute, ‘Referendum Briefing No 10: Latvia’s EU accession referendum, 20 September 2003’, retrieved from: http://www.sussex.ac.uk/sei/research/europeanpartieselectionsreferendumsnetwork/epernreferendumbriefings, consulted on 6 June 2012, p.1. 345 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics 27 (4), 2004, p. 730. 346 European Parties Elections and Referendums Network, Sussex European Institute, ‘Referendum Briefing No 10: Latvia’s EU accession referendum, 20 September 2003’, retrieved from: http://www.sussex.ac.uk/sei/research/europeanpartieselectionsreferendumsnetwork/epernreferendumbriefings, consulted on 6 June 2012, p.2. 347 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and LATVIA AND THE EUROPEAN UNION 211 government’s coalition and business community were both in favour of joining the EU. At the citizen level, support for EU accession was highest among ethnic Latvians, the higher educated and people with high incomes.348 Among others, proponents argued that accession would give the country access to EU markets and that it would provide protection from pressure from Russia. Another economic argument was that Latvia would receive more EU funds as a Member State. Furthermore, it would serve as a final cut with the Soviet past and as an alternative for international semi-isolation in a ‘historically vulnerable geopolitical location in Europe’.349 Other pro-accession arguments were that Latvia would gain influence by becoming part of a large and important organisation such as the EU, and that EU and NATO membership did not exclude each other, but were parallel and complementary.350

Opponents and their arguments Even though there was wide cross-party consensus on EU accession in the Saeima, some parties were less enthusiastic than others. Especially leftist and right-wing conservative parties expressed their concerns. However, due to electoral outcomes and the increased probability of EU membership after the 2002 Copenhagen summit, those parties adopted a more neutral stance since outright euroscepticism would be electorally harmful.351 The changed attitude of the leftist parties was especially remarkable, as they were traditionally associated with the Russian minority and usually tended to maintain good relations with Russia. With the increased consensus on EU accession, the chances for a positive outcome of the referendum increased as well.352 At the citizen level opinions were rather divided on the issue. According to a Eurobarom- eter survey in May 2003, 47 % of Latvians believed that Latvia could benefit from EU membership, against 29 % who thought the opposite.353 Opposition was highest among ethnic Rus- sians in the poorer regions of Latvia.354 Among other things, the Russian-speaking part of the population was concerned that EU membership would increase the distance between Russia and Latvia.355 Even though the Russian minority wished to remain in Latvia, there was some national sentiment involved. Also, the construction of the Schengen border and the questions

Latvia’, West European Politics 27 (4), 2004, p. 717. 348 Ibid., p. 727. 349 Ibid., p. 723. 350 Ibid., p. 734. 351 Interview R30. 352 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics 27 (4), 2004, p.720. 353 European Commission, ‘Eurobarometer CC-EB 2003.2 – Public opinion in the candidate countries’,retrieved from: http://ec.europa.eu/public_opinion/archives/cceb/2003/2003.2_highlights.pdf, consulted on 11 June 2012. p. 14. 354 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics 27 (4), 2004, p. 727. 355 Euractiv.com , ‘Latvia: Saying ‘I do’ to Europe’, retrieved from: http://www.euractiv.com/enlargement/latvia-saying-europe/article-118228, consulted on 6 June 2012. 212 POLITICS

of visas would most likely lead to worsened relations with Russia.356 Another argument of the opponents was that Latvia should not surrender its sovereignty, which it had regained after the Cold War.357 Those opponents felt that the EU would be a new Union, with similar rules and structures as the ‘USSR’.358 They were afraid of the EU’s bureaucratic regulations and possible interference in national affairs.359 Furthermore, opponents suggested that Latvia would suffer economically, being the poorest of all candidate countries.360 They expected that the opening of Latvia’s market to EU members would lead to a rise in inflation and interest rates, as well as tighter fiscal policies.361

Campaign The campaign for the referendum began in early May 2003 with the Europe Week, which was organised by the European Movement Latvia.362 Prior to the campaign, statistics had revealed that many citizens were still undecided. This meant that there was quite some potential for both the ‘Yes’ and the ‘No’ campaigns. European Movement Latvia was of great importance for the ‘Yes’ effort in the campaign. The ‘Yes’ campaign was superior to the ‘No’ campaign in terms of organisation, resources, leadership, planning and EU experience. Anti-EU forces were small, divided and lacked funding. This imbalance was decisive for the result of the referendum.363 Even though the ‘Yes’ campaign was well organized, it did run into some issues. An important one was the general lack of trust in politicians and officials by society. The proponents feared that the public would think that this was ‘just another campaign of the political elite and officials’.364 They confronted this problem by minimising the role of party politicians and by using cultural figures instead. The exception to this strategy was the Latvian President Vike-Freiberga: Latvia’s most popular president and a strong proponent for EU membership.365 The ‘No’ campaign used slogans such as ‘EU = Soviet Union’ and ‘Independence outside

356 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics 27 (4), 2004, p. 722. 357 D. Grammaticas , ‘Latvia wrestles with a dream’, retrieved from: http://news.bbc.co.uk/2/hi/europe/3124576.stm, consulted on 6 June 2012. 358 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics 27 (4), 2004, p. 721. 359 Ibid., p. 721. 360 BBC News, ‘Latvia votes Yes to EU entry’, retrieved from: http://news.bbc.co.uk/2/hi/europe/3126100.stm, consulted on 6 June 2012. 361 CNN.com, ‘World/election watch - Latvia’, retrieved from: http://edition.cnn.com/WORLD/election.watch/europe/latvia4.html, consulted on 6 June 2012. 362 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics 27 (4), 2004, p. 731. 363 Ibid., p. 734. 364 Interview R35. 365 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics 27 (4), 2004, p. 734. LATVIA AND THE EUROPEAN UNION 213 the EU’.366 Despite a range of considerable arguments, the anti-EU cause did not get carried out convincingly. The pro-accession arguments were simply more developed and diverse.367 Aside from the ‘Yes’ and ‘No’ campaigns, independent organisations such as Providus tried to give a more neutral overview of the advantages and disadvantages of joining.368

Turnout and results The Latvian referendum had the highest turnout of any of the eastern European countries holding referendums in 2003.369 Around 67 % voted in favour of EU membership in the referendum. The turnout level reached 72.5 %. Both the percentage of ‘Yes’ voters and the turnout were much higher than expected based on earlier opinion polls, in which the public enthusiasm for integration was much lower than in other central and eastern European countries. The ‘Yes’ vote was ahead in 30 of 34 electoral districts. Latvians abroad were the biggest supporters: 90 % of them voted in favour. It has been suggested that in the end, most Latvians calculated that the membership would bring more advantages to the country and its citizens than disadvantages.370 However, the results might not be completely representative of the opinion of the whole population in Latvia, since Latvia’s sizeable Russian minority (644 000 people; almost one- third of the total population) was largely excluded from the vote.371 Most Russians who were allowed to vote, including some in the Latgale region, voted ‘No’. Nonetheless, the President of Latvia, Vaira V!)e-Freiberga, described the result as ‘wiping out forever the divisions on the map of Europe that the odious Molotov-Ribbentrop Pact of 1939 placed here.’372 Latvia was ready to enter the EU.

Public opinion before and after the EU referendum Ever since independence, the Latvian citizens have been rather sceptical of politics, democracy and anything related to authorities (see also page 232). Some attribute this to the Latvian culture, others refer to a historically-based ‘you can’t fool me’ sentiment.373 Many Latvians did not like the idea of joining another Union, just after having left the USSR. More generally, many Latvians are not actively involved in political organisations and civil society, which perhaps makes them a little ignorant about elections and other political events.374 Political

366 Ibid., p. 734. 367 Ibid., p. 734. 368 Interview R45. 369 E. Mikkel, G. Pridham, ‘Clinching the ‘Return to Europe’: the Referendums on EU accession in Estonia and Latvia’, West European Politics 27 (4), 2004, p. 739. 370 Interview R59. 371 Euractiv.com, ‘Latvia: Saying ‘I do’ to Europe’, retrieved from: http://www.euractiv.com/enlargement/latvia- saying-europe/article-118228, consulted on 6 June 2012. 372 The Guardian, ‘Latvian yes completes EU sweep’, retrieved from: http://www.guardian.co.uk/world/2003/sep/22/eu.politics1, consulted on 6 June 2012. 373 Interview R35. 374 Interview R30; interview R35; interview R59. 214 POLITICS

parties have very low membership numbers for example, even when compared to the other Baltic states.375 In Eurobarometer polls Latvia often has the highest number of neutral responses, since many people simply cannot be bothered to become involved in political debates.376 The Latvian public is also only interested and involved in anything related to the EU to a minimal extent. It has therefore been suggested that we should call the Latvian public ‘eurominimalist’, rather than ‘eurosceptic’.377 In the years after the ‘Yes’ vote for the EU many Latvians felt disappointed by the membership.378 Especially outside Riga, which is relatively wealthy, direct results were hard to observe. Some people even longed back to the Soviet Union, where everybody had a job, a salary and free education.379 Eurobarometer polls have always shown negative trends in the public opinion towards the EU in Latvia. Some observers suggest that his might be explained by the fact that the Latvians who benefited most from the membership have left the country and therefore do not participate in these surveys.380 The people who have stayed are the ones who have not seen many advantages of Latvia’s EU membership. A general trend in Latvia is the public opinion cleavage between the political elite and the citizens with regard to the EU. The Latvian public has always been quite eurosceptic, whereas elites have never been anti-EU.381 For example, the opinions on further enlargement differ extremely: the government is actively pushing for the integration of countries such as Georgia and Moldova, whereas the Latvian public suffers from ‘enlargement fatigue’.382 This situation has been described as ‘two completely different, parallel worlds’.383

6.5 Overview of the first years as an EU Member State

6.5.1 Setting priorities within the European Union After gaining EU membership, Latvia formulated its goals, priorities and actions for the Eu- ropean Union for the period 2007 – 2013.384 Latvia realised that, in order to achieve a high quality of life in Latvia, it was necessary to use all opportunities provided by the EU. It had already defined key action areas on the national level in the National Development Plan for 2007 – 2013 and the EU priorities were linked to this program. Key policy priorities were the

375 Interview R35. 376 Interview R59. 377 Ibid.; interview R45. 378 Interview D07. 379 Interview D07. 380 Interview R45. 381 Interview R30; interview R45. 382 Interview R45; interview R59. 383 Interview R45. 384 Commission of Strategic Analysis, ‘Report on Latvia’s participation in the European Union - basic principles, goals, priorities and actions in 2007-2013 - Accepted by the Cabinet of ministers of the Republic of Latvia on 6 November 2006’, in: !aneta Ozoli"a ed., Yearbook of Politics Latvia 2006, Riga: Zin!tne 2007, p. 213. LATVIA AND THE EUROPEAN UNION 215 following:385

1. Development of human resources and promotion of employment; 2. Promotion of entrepreneurship and innovation; 3. Improvement of infrastructure; 4. Development of agriculture and fishery; 5. Strengthening of security, the rule of law and democracy in neighbouring countries; 6. Consolidation of the national identity, preservation and development of Latvia’s cultural values; 7. Promotion of sustainable development.

The development of human resources and the promotion of employment (priority 1) includes actions such as improving working conditions, increasing labour force productivity and labour market flexibility, and developing higher education.386 The programme also mentions the wish for closer cooperation and coordination of the Member States in the areas of demogra- phy and family support, taking into account the imbalanced demographic situation in Latvia (see page 13).387 With regard to the promotion of entrepreneurship and innovation (priority 2), Latvia wants to stimulate the creation of new jobs, aside from improving the entrepreneurship environment and support measures.388 Entrepreneurship should be based on knowledge and innovation. Latvia wants to attract EU funding for this, as well as make use of the experience of other Member States. In the traditional branches of the economy (wood-processing, machine manufacturing etc.), new technologies and science-intensive products need to be developed. Lastly, protection of intellectual property needs to be improved and the existing obstacles for the four basic freedoms need to be removed.389 As for the improvement of infrastructure (priority 3), there is much to be improved in Latvia. Services have low accessibility and quality and in general there is a high degree of depreciation. Infrastructure (both transport and ICT) needs to be improved to ensure economic growth and competitiveness.390 Agriculture and rural development (priority 4) is divided into several priorities, such as the increase of welfare of the rural population, further rural development and the promotion of equal conditions for all Member States and further rural development.391 Another important priority is the strengthening of security, rule of law and democracy in the EU’s ‘near abroad’. Latvia seeks active involvement in the development of the EU Com-

385 Ibid., p. 213. 386 Ibid., p. 213. 387 Ibid., p. 213 388 Ibid., p. 218. 389 Ibid., p. 218. 390 Ibid., p. 219. 391 Ibid., p. 213. 216 POLITICS

mon Foreign and Security Policy (CFSP) and good use of the instruments of the European Security and Defence Policy (ESDP), the European Neighbourhood Policy (ENP), EU enlargement policy and the European Union Development Cooperation Policy.392 According to Latvia, the latter should focus primarily on the ENP countries in the CIS region. As long as future candidate countries meet the Copenhagen criteria, Latvia will support further EU enlargement, since it will most probably lead to more stability and new opportunities for economic cooperation for Latvia. Latvia aims to develop close relationships with the main partners of the EU (the U.S., Russia, Japan and China, among others). Lastly, Latvia would like to see the development of an integrated EU foreign policy.393 For more information about Lat- via’s position on the CFSP, the ESDP and the ENP, please refer to section 6.3. The last two priorities are the consolidation of national identity and cultural values (promoting the preservation, study and accessibility of the national cultural heritage and historical memory, among other things) and the promotion of sustainable development (balancing economic, social and environmental protection goals).394 The Latvian government believes that it could only reach these goals if it actively involved NGOs, social partners and the public in all national decision-making as a preparation for the Latvian input on the European level. The government also envisages an active dialogue with the other Member States, in particular with the other Baltic and Nordic countries.395 However, in practice, this social dialogue often does not take place.396 The next paragraphs will show whether the other key actions and priorities have been achieved in the past decade.

Referendum on the European Constitution Only one year after Latvia’s accession, Latvia was asked to approve the European Constitu- tion. Latvia had the choice to do this by referendum or solely through voting in the Saeima. Prior to the decision to do the latter, then-President Vike-Freiberga argued that it would not be necessary to hold a referendum, considering its recent EU referendum where the Latvians had in essence approved the substance of the Reform Treaty already.397 She also said that the Lat- vians viewed the new Treaty as a pragmatic document, necessary to prevent stagnation of further integration of the Union of 27 members.398 There was no protest against this decision; not by the citizens, nor by the parliamentarians. The Reform Treaty did indeed not get a referendum and on 8 May 2005, 71 out of 100 Latvian Members of Parliament voted in favour of

392 Ibid., p. 220. 393 Ibid., p. 220. 394 Ibid., p. 223. 395 Ibid., p. 223. 396 Interview R30. 397 National Forum on Europe, ‘Latvia has already had its EU – Forum told’, retrieved from: http://www.forumoneurope.ie/index5e9b.html?locID=366&docID=1450, consulted on 6 June 2012. 398 Ibid. LATVIA AND THE EUROPEAN UNION 217 it.399 During the negotiations and drafting of the Treaty, Latvia was a strong supporter of keeping the 6-monthly rotating presidency in the European Council and one Commissioner per state, as it increases the small country’s chances of holding EU presidency at some point.400

6.5.2 Evaluation of Latvia as EU Member State: achievements and disenchantments Latvia’s EU membership has had a positive effect on Latvia in many aspects. Many agree that the young generation has benefited most from Latvia’s membership, since they get to travel, study, live and work abroad.401 In the next part some of the most important achievements and disenchantments of EU membership will be discussed. Firstly, the availability of public services and hence the standard of living, has improved significantly, partly due to financial assistance from the EU.402 Both transport and ICT infrastructure have been enhanced in the entire country. Furthermore, water and waste management facilities have been created and renovated.403 In the field of energy security, 54 million euros were made available in 2010 for energy infrastructure modernisation in Latvia.404 Lat- via is pleased with the fact that the integration of the Baltic energy market is among the EU’s priorities.405 A third positive development has to do with Latvia’s position in the EU and the world. By becoming a member of the EU, Latvians were able to strengthen their ties with other Eu- ropeans, through travel, study, and exchange of knowledge and experience.406 The mobility of Latvians within the EU was also enhanced by the Schengen Treaty.407 Aside from the better inter-European relations, Latvia was able to start cooperating with third countries on topics such as climate change, migration and international terrorism.408 In general, the EU has brought a feeling of security to the Latvians.409 Another achievement for both Latvia and the EU was the establishment of the first macro-regional strategy, the EU strategy for the Baltic Sea Region. Latvia believes that this strategy can be a tool for closer, multi-level cooperation in the region.410 Latvia is also content about the establishment of the EU agency BEREC (Office of Body of European regulators for

399 C. Church, D. Phinnermote, ‘The Rise and Fall of the Constitutional Treaty’, in: M. Cini ed., European Union Politics, Oxford: Oxford University Press 2007, p.51. 400 D. Akule, ‘The Europeanization of Latvia: Becoming good Europeans?’, retrieved from: archive.politika.lv/index.php?f=1122, consulted on 6 June 2012, p.10. 401 Interview D07; interview R35; interview R45. 402 Interview A02. 403 Interview A02; interview R45. 404 Interview A02. 405 Ibid. 406 Ibid. 407 Ibid. 408 Ibid. 409 Interview R35. 410 Interview A02. 218 POLITICS

Electronic Communications) in Riga.411 Furthermore, it is suggested that government transparency has improved due to monitoring by the European Commission.412 However, Latvia remains unsatisfied with the EU’s Common Agricultural Policy (CAP). It considers the current Direct Payment system unfair and inefficient.413 In 2010, Latvia received only 83 euros per hectare; an amount far below the European average of 200 euros per hectare.414 It is suggested that some farmers received more during the Soviet times.415 Others state that farmers would earn much less without the EU subsidies.416 Latvia will continue to strive for a fair and equal distribution in the future.417 Some say there is full agreement on this question throughout the Baltics, across all party lines.418 For further information on this debate, please refer to page 303.

Current position and role in the EU Latvia is often referred to as a ‘follower’ in the EU.419 In its first years of membership it was rather passive, or perhaps cautious, in negotiation rounds and did not have much influence in the EU’s agenda setting process either.420 This can be blamed partly on the time that was necessary to fully understand the internal procedures in the EU institutions, but it also has to do with a lack of competence, professionalism and language skills of many Latvian ministers and high officials necessary to act efficiently in Brussels.421 However, in both fields, Latvia has learned a lot and has consequently matured in the past years.422 Latvia has become a much more active Member State; its contribution to the debate on the direct payment system of CAP and the fiscal compact are examples of this.423 Brussels is said to regard Latvia as a good but inconsequential member of the EU.424 On the one hand, it is too small to make a difference. On the other hand, Latvia’s economy can be used as a role model; it is already being presented as such. Nonetheless, neither the positives nor the negatives have much impact on the rest of the EU at the moment.425

Cooperation with other Member States Latvia has a close relationship with the Nordic countries, both the neighbours and the Scandi-

411 Ibid. 412 Interview R59. 413 Interview A02. 414 Ibid. 415 Interview D07. 416 Interview A02; interview R30; interview R45. 417 Interview A02. 418 Interview R30; interview R35; interview R45; interview R59. 419 Interview R59. 420 Ibid. 421 Ibid. 422 Interview R45. 423 Ibid. 424 Interview R59. 425 Ibid. LATVIA AND THE EUROPEAN UNION 219 navian countries, which is most apparent through the ‘3 + 3 framework’ and the ‘5+3 framework’.426 The 3 + 3 framework facilitates cooperation between the three Baltic countries and Denmark, Sweden and Finland in the EU and beyond. The 5 + 3 framework also includes Norway and Iceland. Within the Council of Ministers, Latvia tries to cooperate with the large Member States, since they have the largest voting weight and are therefore important partners automatically, and with Member States with similar interests. For example, within the CAP negotiations, Latvia cannot pass Germany and France, as they are large Member States and are also the main countries other Member States have to deal with.427 Spain and the U.K. are also important in this field , since they have similar goals regarding this policy.428 On other topics, the other central European Member States were mentioned as allies as well.429

Goals for the next decade Even though important steps have been made in the first eight years of membership, there are some things which need to be improved in the next decade.430 Among others, Latvia wants deeper involvement in the EU’s decision-making processes and it believes it has the potential to do so. Latvia aims to increase the number of Latvians working at the EU institutions, especially at the EEAS, since it considers the EU’s foreign policy very important.431 Latvia believes that the EU should speak in one common voice to the outside world through the EEAS. Furthermore, Latvia, as a small state, finds it very important that the EU member states also integrate their foreign policies into one.432 Another goal remains joining the Eurozone in Jan- uary 2014.433 Latvia is doing all it can to decrease its budget deficit beforehand; this effort is discussed in more detail on page 260. Yet another objective is a good preparation for a successful first EU presidency in 2015.434 Above all, Latvia strives to become part of ‘Core Eu- rope’, in case the EU splits into a Europe of two speeds.435

6.5.3 Latvia’s Institutional framework for EU affairs The Ministry of Foreign Affairs is the central coordinating institution for EU issues in Lat- via.436 Among others, the ministry analyses Latvia’s priorities in the EU, coordinates the development and implementation of all EU related issues and prepares proposals for Latvia’s

426 Interview R35; interview R59. 427 Interview R35. 428 Interview R45. 429 Ibid. 430 Interview A02. 431 Ibid. 432 Ibid. 433 Ibid. 434 Ibid. 435 Interview R35. 436 Es.gov.lv – Latvia in the European Union, ‘Coordination of the European Union Affairs in Latvia’, retrieved from: http://www.es.gov.lv/latvia-in-the-european-union/coordination-of-the-european-union-affairs-in-latvia, consulted on 6 June 2012. 220 POLITICS

EU related policy.437 It also prepares the prime minister’s participation in the European Coun- cil meetings and Latvia’s participation in Coreper meetings. All the other ministries prepare national position papers on EU issues which fall under their competence, in cooperation with social partners, NGOs and other institutions.438 Every ministry has an EU department or division with one or more EU coordinators who make sure that all documents from the institutions are circulated internally. The ministries frequently report back to the EU Coordination department of the Ministry of Foreign Affairs. The Meet- ing of Senior Officials brings high-level officials from the state institutions together to discuss Latvian priorities in the EU and Latvia’s participation in the EU decision-making process as a whole.439 Other members of this meeting are representatives of the Bank of Latvia and the European Integration Bureau.440 During each Presidency of the Council of the EU the Latvian government formulates the national priorities. Furthermore, the government needs to approve the national position papers of the ministries. Lastly, the government decides which minister or high official will represent Latvia in ministerial meetings of the Council of the EU.441 The Saeima holds a debate on foreign affairs and EU issues every year. Aside from this debate, not much time is spent on EU topics, even though there are many issues which could be discussed.442 Some of this is done by the European Affairs Committee of the Saeima, consisting of 19 MPs from different parties, which talks about EU issues two or three times a week.443 Among others, the committee approves the national position papers of Latvia before the Latvian position is presented in the Council of the EU or the European Council meetings.444 The committee has quite a lot of power here; if it does not approve the national position papers, it will not go to Brussels.445 Important topics which the current Saeima has dealt with include the Middle East (aftermath of the Arab revolutions and Arab spring; Syria), Belarus and the Eastern Partnership. It is not too hard to reach consensus and to take decisions, since the government coalition has a majority if everyone is present in the committee.446 On some occasions, the committee has

437 Ibid. 438 Ibid. 439 Ibid. 440 I. Reinholde, ‘Role of senior officials in public administration in Latvia’, retrieved from: http://unpan1.un.org/intradoc/groups/public/documents/nispacee/unpan004360.pdf, consulted on 6 June 2012. 441 Es.gov.lv – Latvia in the European Union, ‘Coordination of the European Union Affairs in Latvia’, retrieved from: http://www.es.gov.lv/latvia-in-the-european-union/coordination-of-the-european-union-affairs-in-latvia, consulted on 6 June 2012. 442 Interview R30; interview R45. 443 Republic of Latvia – 11th Saeima, ‘Committees’, retrieved from: http://titania.Saeima.lv/personal/deputati/Saeima11_depweb_public.nsf/structureview?readform&type=3&lang= EN, consulted on 6 June 2012; interview R35. 444 Es.gov.lv – Latvia in the European Union, ‘Coordination of the European Union Affairs in Latvia’, retrieved from: http://www.es.gov.lv/latvia-in-the-european-union/coordination-of-the-european-union-affairs-in-latvia, consulted on 6 June 2012. 445 Interview R35. 446 Ibid. LATVIA AND THE EUROPEAN UNION 221 contact with the Latvian MEPs, the European Commission and Latvian businesses and organisations in Brussels.447 The European Commission is present in Latvia through the Representation of the Euro- pean Commission. This office is part of DG Communication, which is responsible for the Commission’s communication with European citizens. The main task of the office is to provide accurate, fair information to the public at large on the European Commission and the EU in a broader sense.448 Furthermore, the Representation provides the Commission with information on the Latvian public’s opinion about the EU and citizens’ concerns.449 The main tools for communication with the public include mass media and the organisation of conferences, visits of Commissioners, etc. On some occasions, the Representation collaborates with the Information Office of the European Parliament, primarily for efficiency reasons.450 The Information Office of the European Parliament links the European Parliament (EP) and the Latvian citizens. On the one hand, they communicate to the Latvian public about what happens in the EP, through the organisation of activities and (social) media.451 On the other hand, the office informs the EP’s DG Communication about national issues which are of importance for the EP. Both the Commission Representation and the EP’s Information Office closely cooperate with Latvian civil society as well.452 Latvia aims to involve social partners and NGOs in the preparation of national positions on EU topics. Ministries and other government institutions inform them on a regular basis. Furthermore, social partners and NGOs are invited to inter-institutional meetings in which the national point of view is discussed. The Meeting of Senior Officials, which was mentioned earlier, is also open for the social partners. At this meeting, civil society representatives are also allowed to propose topics for discussion.453 Important NGOs with regard to EU affairs are Civil Alliance, the European Movement, the Europe Direct Centres, LAPAS and Provi- dus.454 However, civil society is rather undeveloped in Latvia, compared to other Member States.455

6.5.4 Latvian representation in EU institutions Latvia is represented in all EU institutions. Latvia has 9 members in the European Parliament,

447 Ibid. 448 Interview R20. 449 Ibid. 450 Interview R20; interview R59. 451 Interview R59. 452 Ibid.; interview R20. 453 Es.gov.lv – Latvia in the European Union, ‘Coordination of the European Union Affairs in Latvia’, retrieved from: http://www.es.gov.lv/latvia-in-the-european-union/coordination-of-the-european-union-affairs-in-latvia, consulted on 6 June 2012. 454 Es.gov.lv – Latvia in the European Union, ‘EU Information’, retrieved from: http://www.es.gov.lv/EU- Information, consulted on 6 June 2012. 455 Interview R35. 222 POLITICS

of a total of 736, who are spread over the European political parties as follows:456

Alliance of Liberals and Democrats for Europe: 1; European People’s Party: 4; Progressive Alliance of Socialists and Democrats in the EP: 1; European United Left - Nordic Green Left: 1; The Greens - European Free Alliance: 1; European Conservatives and Reformists: 1.

As can be concluded from this distribution, the Latvians are mostly represented in the (center) right conservative groups of the EPP (European People’s Party and European Conservatives and Reformists). This is in line with the national political situation. The Latvian MEPs are well-known amongst the Latvian public, since most have carried out important functions in past governments.457 Among others, former PM Mr. Godmanis, three foreign ministers and three finance ministers have been MEPs for Latvia.458 Most people find it an honour to become an MEP for Latvia; this is a trend in most new Member States of the EU.459 The European Commissioner from Latvia is Andris Piebalgs. In the period from 2010 until 2014 he is the Commissioner for Development Cooperation. Piebalgs is an experienced politician who has occupied several key positions in the national and European field.460 He was Commissioner of Energy in the first Barroso Commission and The Economist honoured him with the title of ‘Eurocrat of the year 2007’.461 Before he entered the European stage, he was the Minister of Education in Latvia, followed by a tenure as Minister of Finance and Deputy Prime Minister. As the Minister of Education in the period just after independence, he was responsible for setting up an independent educational system.462 In Latvia, Andris Piegbals used to be a member of the Communist party. He is now no longer affiliated with a political party at the national level. At the EU level, he is affiliated with the European Peo- ple’s Party. Within the Council of Ministers, Latvia’s voting weight is 4 out of 345.463 This is the same as the individual voting weights of Estonia, Cyprus, Slovenia and Luxembourg. Lithua- nia has 7 votes.

456 Es.gov.lv – Latvia in the European Union, ‘Coordination of the European Union Affairs in Latvia’, retrieved from: http://www.es.gov.lv/latvia-in-the-european-union/coordination-of-the-european-union-affairs-in-latvia, consulted on 6 June 2012. 457 Interview R59. 458 Ibid. 459 Ibid. 460 European Commission, ‘Andris Piebalgs. Member of the European Commission – Biography of Andris Pie- balgs’, retrieved from: http://ec.europa.eu/commission_2010-2014/piebalgs/about/bio/index_en.htm, consulted on 6 June 2012. 461 Ibid. 462 Ibid. 463 Europa Nu, ‘Letland - politieke situatie’, retrieved from: http://www.europa-nu.nl/id/vgaxlcr1jzkj/letland#p1, consulted on 6 June 2012. LATVIA AND THE EUROPEAN UNION 223

Furthermore, Latvia has 7 representatives in the European Economic and Social Commit- tee. Latvia is also represented in the Committee of the Regions with 7 full members and 7 alternate members, out of a total of 344. Furthermore, Latvia has one member each in the Eu- ropean Court of Justice, the General Court and the European Court of Auditors.464

2009 European Parliament elections The Latvians voted for their 9 members of the European Parliament on 6 June 2009. 17 parties competed for 9 MEP posts.465 Those parties included both nationalist and eurosceptic parties, and parties geared towards the Russian-speaking population.466 At the time of the elections, Latvia was suffering heavily from the economic crisis.467 The GDP was shrinking dramatically, while unemployment was quickly rising. Against the backdrop of these economic (and also social and political) tensions, most Latvian candidates focused their campaigns on solutions to the crisis through the EU and the EP specifically.468 Latvia’s turnout was higher than the EU average: 53 % voted in the European elections, which were combined with the municipal elections.469 With Concord Centre and Civic Union being the biggest winners, the EP elections were a clear reaction to and punishment for the governing parties in Latvia.470

6.5.5 Main EU projects in Latvia and the Baltic Sea region EU strategy for the Baltic Sea region In 2009 DG Regional Policy introduced the EU Strategy for the Baltic Sea Region (SBSR), a macro-regional strategy that was requested by the European Council after preparatory work by the European Parliament.471 The strategy aims to connect regions of eight Member States across the Baltic Sea (Latvia, Lithuania, Estonia, Finland, Sweden, Poland, Germany and Denmark) and nearly 100 million people, enabling the macro-region to enjoy optimal economic and social development, as well as an unpolluted environment.472 The strategy also welcomes cooperation with non-EU countries, such as Russia, Norway and Belarus, for which

464 Es.gov.lv – Latvia in the European Union, ‘Representatives in the European Union institutions’, retrieved from: http://www.es.gov.lv/latvia-in-the-european-union/representatives-in-the-european-union-institutions, consulted on 6 June 2012. 465 D. Akule, ‘Latvia: The European Debate and Politics in a Time of Economic Crisis, retrieved from: http://eupi.osi.bg/fce/001/0070/files/Latvia_UpdatedEP_EuPIPolicyBrief9June2009.pdf, consulted on 6 June 2012, p. 1. 466 Ibid., p. 1. 467 Ibid., p. 2. 468 Ibid., p. 4. 469 Ibid., p. 4. 470 Ibid., p. 5. 471 European Commission, Directorate-General for Regional Policy, ‘EU strategy for the Baltic Sea Region at a glance’, retrieved from:http://ec.europa.eu/regional_policy/cooperate/baltic/pdf/panorama/minipano_en.pdf, consulted on 6 June 2012, p. 2. 472 Ibid., p. 2. 224 POLITICS

the Northern Dimension Framework can serve as a basis.473 The Commission’s initial Action Plan listed 80 projects, covering projects for improvements in four pillars: sustainable environment, regional prosperity, accessibility and attrac- tiveness, and safety and security.474 The projects will ultimately help to reach 15 connected priorities, distributed under these pillars.475 Examples of these priorities are climate change, research and innovation, and maritime safety and security.476 The pace and success of this depends on the commitment of many partners, stakeholders and strong political will in all eight Member States.477 The EU deliberately chose to let the success of the project depend on the will of all involved actors; a new way of working together.478 The strategy is only directed at better coordination and utilisation of the existing, regular (national) structural funds in the region and within cross-border and transnational programmes, such as the Baltic Sea region programme; it did not receive additional funding. However, the Baltics would benefit from the Regional Policy and other EU funding between 2007-2013.479 The establishment of the SBSR was a reaction to the increasing amount of problems in the area, such as the decreasing quality and biodiversity of the Baltic Sea, lacking transport systems and energy networks, and the low level of internal competitive pressure.480 The existing initiatives and policies lacked coherence and practical application to solve these issues effectively.481 In reaction to this, the SBSR is based on strong cooperation and an integrated approach in which needs and solutions are identified and then matched to available resources.482 The SBSR falls under the territorial cooperation objective of the EU’s regional policy. Ideally, the SBSR would act as a model of regional cooperation and as a best practice for other states and regions. The Strategy is the first macro-regional policy in the EU and an ambitious project with many different objectives. At its start, some scientists expressed their worries about certain aspects. For instance, according to Bengttson, the first challenge is to

473 U. Wikström, ‘Implementation of the European Union Strategy for the Baltic Sea Region’, retrieved from: http://www.efinord.efi.int/files/attachments/efinord/stockholm_2011/wikstrom_april_2011.pdf, consulted on 6 June 2012, slide 3. 474 European Commission, Directorate-General for Regional Policy, ‘EU strategy for the Baltic Sea Region at a glance’, retrieved from: http://ec.europa.eu/regional_policy/cooperate/baltic/pdf/panorama/minipano_en.pdf, consulted on 6 June 2012, p. 2. 475 U. Wikström, ‘Implementation of the European Union Strategy for the Baltic Sea Region’, retrieved from: http://www.efinord.efi.int/files/attachments/efinord/stockholm_2011/wikstrom_april_2011.pdf , consulted on 6 June 2012, slides 7 – 13. 476 European Commission Regional Policy – Inforegio, ‘Baltic Sea Region Strategy: priority areas’, retrieved from: http://ec.europa.eu/regional_policy/cooperate/baltic/priority_en.cfm, consulted on 6 June 2012. 477 European Commission, Directorate-General for Regional Policy, ‘EU strategy for the Baltic Sea Region at a glance’, retrieved from: http://ec.europa.eu/regional_policy/cooperate/baltic/pdf/panorama/minipano_en.pdf, consulted on 6 June 2012, p. 2. 478 Ibid., p. 2. 479 Ibid., p. 5. 480 Ibid., p. 5. 481 Ibid., p. 3. 482 U. Wikström, ‘Implementation of the European Union Strategy for the Baltic Sea Region’, retrieved from: http://www.efinord.efi.int/files/attachments/efinord/stockholm_2011/wikstrom_april_2011.pdf , consulted on 6 June 2012, slide 32. LATVIA AND THE EUROPEAN UNION 225 achieve more efficient cooperation in a context of overlapping national agendas and a lack of division of labour among the schemes of cooperation that are already in operation.483 Other issues include the governance of the strategy once it would be adopted and how to assure real commitment from the entire EU.484 Lastly, Bengttson claimed that the strategy lacks external perspective: many of the priorities and programmes require assistance or cooperation of Rus- sia, which has been kept out of the strategy by the EU.485 There has been progress in several areas of the SBSRin its first two years of existence.486 Among others, financial support was found for new projects (e.g. cooperation with farmers, improved planning for transport infrastructure). Furthermore, there is improved cooperation between regions and other partners, including the private sector, and many Russian partners in areas such as water quality, innovation and environmental protection.487 Before the emergence of the SBSR, Latvia was already involved in the so-called Baltic Sea Region Programme. The Latvian opinion on the EU strategy is divided. Opponents find it mostly cumbersome, since priorities within many other projects, including the Baltic Sea Re- gion Programme, had to be changed accordingly.488

Rail Baltica Rail Baltica is one of the priority projects of the EU’s Trans-European Transport Networks (TEN-T). Rail Baltica is to become a continuous railway of 950 kilometres that will connect Finland, the Baltic states and Poland.489 Riga is one of the main stops.490 Furthermore, it should improve the route between central and eastern Europe and Germany. In the first years, the section between Helsinki and Tallinn will be connected by ferries. A tunnel is to be built between the two cities in the future.491 The transport ministers of the Baltic Sea states included Rail Baltica in their list of priority projects of spatial planning in September 2001.492 The European Council added it to its priority list in 2003. A Rail Baltica international coordination group was set up, which managed to attract resources from two EU funds for the development of the railway: the Interreg

483 R. Bengtsson, ‘An EU Strategy for the Baltic Sea Region: Good Intentions Meet Complex Challenges’, retrieved from: http://www.cespi.it/GOVMED/Swedish_institute_rapport_baltique.pdf, consulted on 6 June 2012, p. 8. 484 Ibid., p. 8. 485 Ibid., p. 8. 486 European Commission Regional Policy – Inforegio, ‘Baltic Sea Region Strategy: priority areas’, retrieved from: http://ec.europa.eu/regional_policy/cooperate/baltic/priority_en.cfm, consulted on 6 June 2012. 487 Ibid. 488 Interview R37. 489 Rail Baltica, ‘Project description’, retrieved from: http://www.rail-baltica.com/pub/, consulted on 6 June 2012. 490 Ibid. 491 Uutiset, ‘Helsinki-Tallinn Rail Tunnel Link?’, retrieved from: http://www.yle.fi/uutiset/news/2008/03/helsinki-tallinn_rail_tunnel_link_288304.html, consulted on 6 June 2012. 492 Rail Baltica, ‘Project description’, retrieved from: http://www.rail-baltica.com/pub/, consulted on 6 June 2012. 226 POLITICS

IIIB (regional development) and the Cohesion Fund (research of infrastructure development).493 The project is also partly financed from the EU’s TEN-T budget and from structural funds available for new EU members.494 The costs will be between 1.5 billion euros and 2.4 billion euros, depending on the exact choice of the route and speed limits.495 The first phase of the project is planned to be completed by 2013; the second phase in 2020.496 However, the commencement of the project depends on the outcome of the negotiations on the new Multi- annual Financial Framework for the years 2013 – 2020; it will be discussed together with the cohesion policy and agricultural policy.497 Rail Baltica will support the larger EU goals of equal access to services and infrastructure in all EU Member States and the development of sustainable modes of transportation.498 Fur- thermore, economic and transport integration of Baltic states and Poland with the western part of Europe will lead to more economic growth and trade. Rail Baltica is part of the portfolio of the Commissioner of Transport.499 The Latvian Ministry of Transport is very much in favour of the project.500

Other important EU projects in the Baltic States As discussed in section 7.8 of this report, the EU has had a great influence on the development of the Latvian energy market through the establishment of the Baltic Energy Market Interconnection Plan (BEMIP). Furthermore, the EU is finalising the content of the Connect- ing Europe Facility: a programme (and fund) which will help connect Europe in transport, energy and telecommunications as well as ICT. With regard to electricity infrastructure, one of the biggest EU funded projects is the Nordic Power Exchange, which is to be completed by 2012.

Management Partnership On 10 July 2009, the Latvian government and the European Commission signed a Manage- ment Partnership for the next four years.501 This Partnership document determines a need to

493 Ibid. 494 Europa Press Releases RAPID, ‘Trans-European Transport Network (TEN-T): selection of projects for the TEN-T multi-annual programme 2007-2013 and the annual TEN-T programme 2007’, retrieved from: http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/07/491&format=HTML&aged=0&language= EN&guiLanguage=en, consulted on 6 June 2012. 495 European Commission, Directorate-general Regional Policy, ‘Feasibility study on Rail Baltica railways’, http://ec.europa.eu/regional_policy/sources/docgener/evaluation/railbaltica/concl_en.PDF, consulted on 6 June 2012. 496 Information Agency rzd.partner, ‘Latvia to begin constructing Rail Baltica’, retrieved from: http://www.rzd- partner.com/news/2008/04/18/322781.html, consulted on 6 June 2012. 497 Interview R20. 498 Rail Baltica, ‘Project description’, retrieved from: http://www.rail-baltica.com/pub/, consulted on 6 June 2012. 499 Interview R20. 500 Ibid. 501 Es.gov.lv – Latvia in the European Union, ‘Management Partnership’, retrieved from: http://www.es.gov.lv/communication-with-society/management-partnership, consulted on 6 June 2012. LATVIA AND THE EUROPEAN UNION 227 improve communication on the EU and to enhance the knowledge in society of citizens’ opportunities, responsibilities and rights within the EU.502 It therefore aims to increase cooperation between the government and the EU institutions in the field of EU communication. The Communication Plan includes chapters on active participation of society in EU processes, on how to spread information on what the EU does for EU citizens, and on opportunities for special programs for the Latvian youth.503 Latvia receives 200000 euros annually for this programme.504 In practice, the Management Partnership is run by the Representation of the Euro- pean Commission and the Information Office of the European Parliament.505

6.5.6 Latvia’s role and position on the EU’s external policies: the Eastern Partnership The Eastern Partnership arose in reaction to the establishment of the Union of the Mediterra- nean and the Northern Dimension. It serves as a Partnership between the EU and Belarus, Armenia, Azerbaijan, Georgia, Moldova and Ukraine.506 The Eastern Partnership acts as a forum and aims to improve the political and economic trade relations of these six Post-Soviet states. It also strives for promotion of human rights and rule of law, as well as good governance. Since Latvia is located at the border of these Eastern Partners, it finds the Partnership of great importance. In March 2012, both Latvia and the Visegrad Group (Hungary, Poland, Czech Republic and Slovakia) have asked the European Commission and the EEAS to set ambitious goals for the Eastern Partnership roadmap which should be achieved in 2013, when the next summit takes place.507 Latvia is in favour of adopting a differentiated approach with the different partner states, in which the EU would provide more support to those who carry out the reforms faster and more successfully.508 It especially supports a closer partnership with Moldova and Georgia.509 It has been suggested that this is because Latvia would like them to become members of the EU in the (near) future.510 Others believe that Latvia will not actively push for more than close partnerships with both countries.511 However, in the meantime, Latvia is advising many former Soviet countries, including Georgia and Moldova, on their transition process to de-

502 Ministry of Foreign Affairs of the Republic of Latvia, ‘Communication with Society’, retrieved from: http://www.am.gov.lv/en/eu/communication/?print=on, consulted on 6 June 2012. 503 Es.gov.lv – Latvia in the European Union, ‘Management Partnership’, retrieved from: http://www.es.gov.lv/communication-with-society/management-partnership, consulted on 6 June 2012. 504 Ibid. 505 Interview R20. 506 Barentsobserver, ‘EU might get new Eastern Partnership’, retrieved from: http://www.barentsobserver.com/eu-might-get-new-eastern-partnership.4485264-16149.html, consulted on 23 May 2012. 2. 507 Ministry of Foreign Affairs of the Republic of Latvia, ‘Foreign Minister Rink&vi*s in Prague supports visa liberalisation and free trade between EU and Eastern Partnership countries’, retrieved from: http://www.am.gov.lv/en/eu/news/archive/document/?pg=13238, consulted on 23 May 2012. 508 Ibid. 509 Ibid. 510 Interview R45. 511 Interview R59. 228 POLITICS

mocracy, through bilateral consultancy programmes. Latvia is involved in all these programmes because it wants to share its experiences and lessons learned in the early 1990s.512 The consulting has spread towards topics such as education policy, social inclusion and criminal justice.513 In November 2011, in the aftermath of the Arab Spring, Foreign Minister of Latvia Rink&vi*s met with the European Commissioner for Enlargement and European Neighbour- hood Policy Füle, and took the opportunity to emphasise that the political events in the North- ern African countries should not divert attention from the Eastern neighbours.514 The Europe- an Affairs Committee also makes sure that the Eastern dimension receives enough attention in the Saeima and does not fade into the background due to all the turbulence in the Middle East in the last years.515 Another view is that the turbulence in the Middle East actually makes the Eastern Partnership more important, since it can lead to increased energy security, whereas this is decreasing in the Southern neighbourhood.

6.5.7 Current EU policy priorities of Latvia The Latvian government clearly formulated its EU policy priorities at the start of the Danish presidency of the Council of the European Union, in January 2012. For the most part, the list is in line with past priorities, including further EU enlargement, the European Neighbourhood Policy, a fairer Common Agricultural Policy and Cohesion policy funding and the Eastern Partnership programme. During the Danish presidency, one of the main priorities for Latvia is the continuation of the discussion on the EU Multi-annual Financial Framework for the period 2014-2020 and the related legislative initiatives concerning the revenues and expenditures part of the budget.516 Another important point for Latvia is the continuation of the negotiations on the Cohesion Policy for the period after 2013, as well as continued discussion about the Commission’s proposals concerning the Common Agricultural Policy after 2013.517 Latvia strives for fair and equitable direct payment and equal distribution of funds under the rural development policy for farmers in all the EU member states.518 Latvia finds the current level of direct payments unreasonably low. With regard to energy and transport policy, Latvia aims for, amongst other things, a common energy market in which the Baltic energy market interconnection plan

512 Interview R45. 513 Ibid. 514 Ministry of Foreign Affairs of the Republic of Latvia, ‘Foreign Minister Rink&vi*s in Brussels calls on EU for continued attention to Eastern neighbours’, retrieved from: http://www.am.gov.lv/en/news/press- releases/2011/november/14-2, consulted on 23 May 2012. 515 Interview R35. 516 Ministry of Foreign Affairs of the Republic of Latvia, ‘Priorities of Latvia during the Danish Presidency’, retrieved from: http://www.am.gov.lv/en/eu/Presidencies/dkp-presid-2012/, consulted on 23 May 2012. 517 Ibid. 518 Ibid. LATVIA AND THE EUROPEAN UNION 229

(running from Sweden to Lithuania)519 is implemented.520 The country also wants a debate on the guidelines for the development of the Trans-European Transport Networks, such as Rail Baltica.521 Another important topic which, strangely enough, is not mentioned in the government’s priorities, is emigration of Latvians to other EU countries; a phenomenon which has increased significantly due to free movement of labour in the EU.522 The topics mentioned above are the main priorities of Latvia. However, the Ministry of Foreign Affairs mentions many others on its website. An overview is given below. Latvia is a proponent of stricter coordination of economic policies and fiscal discipline in the Eurozone. According to the Latvian government, a new inter-governmental treaty should be drafted and a new economic governance legislative package for the Eurozone needs to be discussed. Furthermore, regulation and supervision of the financial market should increase and a crisis management framework needs to be developed. Other topics which need to be discussed are the possibilities regarding a financial transaction tax and a common consolidated basis for the company tax. Latvia would like for the EU to establish a common digital market and to create green and sustainable growth throughout the Union, as well as a long- term climate and energy strategy (until 2050).523 Foreign policy is covered extensively in the priorities statement. On the European conti- nent, Latvia expects progress in the EU integration process in the Western Balkan states. Fur- thermore, Latvia finds that the Danish presidency must start to develop an Eastern Partnership Roadmap, as was agreed upon at the Eastern Partnership Summit in Warsaw in September 2011. This roadmap should include the establishment of far-reaching Association Agree- ments, Deep Free Trade Agreements and visa regulations with individual Eastern Partnership states. With regards to EU enlargement, Latvia hoped for a smooth process of ratification of membership of Croatia, which will result in membership in July 2013. Other countries to which European integration should be extended are Turkey and Iceland. There certainly is a feeling of solidarity towards all (potential) candidate Member States, since they are in the same position Latvia was in.524 However, it has been suggested that many of the governments’ statements about enlargement are not necessarily followed up by a pro-active stance in Brussels.525 The priorities statement also mentions the EU strategy for the Baltic Region. It asks the EU to prioritise the strategy targets and to report on the Strategy Action Plan in May 2012.526

519 Interview R45. 520 Ministry of Foreign Affairs of the Republic of Latvia, ‘Priorities of Latvia during the Danish Presidency’, retrieved from: http://www.am.gov.lv/en/eu/Presidencies/dkp-presid-2012/, consulted on 23 May 2012. 521 Ministry of Foreign Affairs of the Republic of Latvia, ‘Priorities of Latvia during the Danish Presidency’, retrieved from: http://www.am.gov.lv/en/eu/Presidencies/dkp-presid-2012/, consulted on 23 May 2012. 522 Interview R20. 523 Ministry of Foreign Affairs of the Republic of Latvia, ‘Priorities of Latvia during the Danish Presidency’, retrieved from: http://www.am.gov.lv/en/eu/Presidencies/dkp-presid-2012/, consulted on 23 May 2012. 524 Interview R59. 525 Ibid. 526 Ministry of Foreign Affairs of the Republic of Latvia, ‘Priorities of Latvia during the Danish Presidency’, 230 POLITICS

The list of priorities also mentions foreign policy outside European territory. Firstly, Latvia wants the EU to continue its financial support to North-African countries, in order to achieve democratic reform in the area. With regard to the Middle East Peace Process and Palestinian statehood, Latvia strives for a balanced and common position of the EU. Also, Latvia wants to start/continue the economic and political cooperation with the South-East Asian nations, the U.S., China and Japan. Lastly, the Latvian government prioritises development issues, possibly because the EU Commissioner of Latvia carries that portfolio. Latvia strongly believes that the Eastern European Member States and their history of transition to democracy can be of great help for non-European countries who are undergoing the same process.527 All foreign policy should be underpinned by European values (democracy, human rights, rule of law and economic freedoms).528 Furthermore, Latvia would like to enhance the cooperation between the EEAS and the foreign ministries of the EU Member States.529

6.5.8 Latvian presidency of the Council of the European Union Latvia will hold the presidency of the Council of the European Union in the first half of 2015. The presidency will be an opportunity for Latvia to present itself to the other EU Member States and to show the Latvian citizens what the EU does and means for Latvia.530 Prepara- tions for this important task started in January 2012, when the Secretariat of Latvia’s presidency was installed after the Secretariat’s Rules of Procedure were approved by the Cabinet of Ministers.531 The Secretariat of the Latvian presidency started working on 1 February 2012 and will remain in place until late 2015. For the moment, there are three staff members of the Latvian EU Presidency Secretariat, including the Head of the Secretariat. It is probable that this number will already increase in 2012. The secretariat is an institution subordinate to the Ministry of Foreign Affairs.532 The Latvian presidency of the Council of the European Union aims to closely cooperate with different ministries and other central and local government institutions, as well as with civil society organizations, the private sector and individuals.533 The Information Office of the

retrieved from: http://www.am.gov.lv/en/eu/Presidencies/dkp-presid-2012/, consulted on 23 May 2012. 527 Ibid. 528 Ministry of Foreign Affairs of the Republic of Latvia, ‘Foreign Minister calls for strengthening relations with EU strategic partners’, retrieved from: http://www.am.gov.lv/en/eu/news/4341/?pg=13246, consulted on 23 May 2012. 529 Ibid. 530 Interview D7. 3. 531 Ministry of Foreign Affairs of the Republic of Latvia, ‘Secretariat of Latvian Presidency of the Council of the European Union to start working on 1 February’, retrieved from: http://www.am.gov.lv/en/eu/news/archive/document/?pg=13138, consulted on 23 May 2012. 532 Ministry of Foreign Affairs of the Republic of Latvia, ‘Agreement reached on institutional setup for the Pres- idency preparation secretariat’, retrieved from: http://www.am.gov.lv/en/news/press-releases/2011/november/30- 1, consulted on 23 May 2012. 533 Ministry of Foreign Affairs of the Republic of Latvia, ‘Secretariat of Latvian Presidency of the Council of the European Union to start working on 1 February’, retrieved from: http://www.am.gov.lv/en/eu/news/archive/document/?pg=13138, consulted on 23 May 2012. LATVIA AND THE EUROPEAN UNION 231

European Parliament and the Representation of the European Commission in Riga will also be involved in the organization. At the international level, it is likely that Latvia will make use of experiences of other Member States with regard to the preparation and holding of the EU presidency. At a meeting of EU ambassadors in November 2011, several ambassadors declared their readiness to share their knowledge with Latvia.534 Latvia has started talks with several Member States in the past months.535 It has been suggested that Latvia’s priority might become ‘Green growth’, since Latvia has been rated second greenest country in the world.536 Another option might be the making of a re-draft of the Millennium goals, which end in 2015, at the European level.537 The Eastern Partnership was also mentioned, just like the relationship with Russia, the transatlantic relationship and the relations with Central Asia.538 Latvia believes that it can certainly add value to these topics during its presidency.539

6.6 Public opinion

6.6.1 Waves of democratisation After the collapse of communism in central and eastern Europe at the end of the 1980s, the countries that were previously occupied by the Soviet Union started their process towards democratisation, mainly from the early 1990s onwards.540 Huntington describes this process of democratisation as the ‘third wave of democratisation’.541 This ‘wave’ has also taken place in Latvia. To put this into context: the first wave is used to describe the period of extending universal suffrage from the late 19th century until the rise of fascism in the 1920s; a process also observed in Latvia. The second wave started after the Second World War up until the 1970s.542 The democratisation process has not been easy for Latvia, as the country encountered many problems and obstacles on its way to democracy. First of all, it is a difficult process to change a communist economy into a fully functioning market economy.543 Second, a country needs to establish institutions and laws to carry out and protect the newly planted seed of democracy. This raises an important question that was also discussed in Latvia: ‘can a newly liberated nation-state afford to grant full democratic rights to a sizable national minority made

4. 534 Ministry of Foreign Affairs of the Republic of Latvia, ‘Foreign Minister Edgars Rink&vi*s discusses priorities of Latvia’s foreign affairs with EU ambassadors’, retrieved from: http://www.am.gov.lv/en/news/press- releases/2011/november/08-1/, consulted on 23 May 2012. 535 Interview R73. 536 Interview R59. 537 Ibid. 538 Interview R73. 539 Ibid. 540 S.P. Huntington, The Third Wave. Democratizationin the Twentieth Century, Norman: University of Oklaho- ma Press, 2001. 541 Ibid. 542 Ibid. 543 A. Åslund & V. Dombrovskis, How Latvia Came Through the Financial Crisis, Peterson institute for Interna- tional Economics, 2011. 232 POLITICS

up of its previous occupiers?’544 Third, it is known that popular support for a democratic regime lays the foundation for its legitimisation. This implicates that the success of a democratic regime is for a large part based on the citizen support of democratic values.545 As a study conducted in 1996 has shown, most Latvians can be placed in the category of ‘weak democrats’ at 61 %, which means that most Latvians still hold some reservations when it comes to democracy.546 Thus, an important challenge for Latvia lays in convincing its citizens that a move from a communist autocracy to a democratic capitalist society is in their best interest. As might be expected, these changes have put a strain on Latvia’s society. For example, Latvians born in the 1970s or 1980s have had to adapt to and accept new rules and values when Latvia became independent in 1991.547 Consequently, the youngest members of society, who have only (consciously) witnessed Latvia as a democracy, often have more in common with their grandparents who have lived in an independent Latvia during most of the first half of the 20th century, than with their parents who have lived much of their lives under Soviet rule.548

6.6.2 Popular support for democracy Popular support for democracy can be defined as the situation where a majority of citizens consider democracy as the best (or least bad) form of rule possible.549 However, it is more difficult to find out what actually influences the level of popular support. Easton argues that support is a key variable for the survival of democratic political systems in a society.550 Ber- glund states that ‘[support] may be specific, an expression or feeling of gratitude for services rendered, or diffuse, generalised feelings of support often as a by-product of successful political socialisation’.551 These feelings can be towards the political community, the regime itself and the authorities of a country. The importance of support of a regime can be explained as follows: ‘[The regime] refers to the feeling that the members of a given society should have a common division of political labour because they are of the same nationality, speak the same language, and share a common history’.552 These last points are especially interesting in the case of Latvia, where a large part of the inhabitants are not Latvian by ethnicity or nationality, nor do they speak the same language. Moreover, their shared history is one in which the majority was suppressed by the minority.

544 Klingemann, et al. eds., Democracy and Political Culture in Eastern Europe. New York: Routledge 2006, p. 2. 545 Ibid., p. 4. 546 I. Koroleva & R. Rungule, ‘Democracy as an Abstract Value’, In: Klingemann, et al. eds., Democracy and Political Culture in Eastern Europe, New York: Routledge 2006. 547 Ibid. 548 Ibid. 549 D. Easton, A Framework for Political Analysis. New York: Prentice Hall, 1965a. 550 Ibid. 551 S. Berglund, ‘Prospects for the Consolidation of Democracy in East Central Europe’, in: Japanese Journal of Political Science 4 (2), p. 193. 552 Ibid., p. 193. LATVIA AND THE EUROPEAN UNION 233

However, Berglund also adds some marginal notes to his concept, by paraphrasing Norris in stating that dissatisfaction with the performance of a regime might not necessarily mean dissatisfaction with democracy on a more fundamental level.553 In other words, people can support the basics of a democracy (diffuse support), yet feel dissatisfied with the way democracy is carried out in their country (specific support).554 These findings are reflected in the responses Latvians gave when they were asked about their satisfaction with democracy, as will be discussed below.

Level of support for democracy As mentioned above, a 1996 survey showed that most Latvians can be considered ‘weak democrats’, whilst only 10 % is a ‘strong democrat’.555 Only 3 % of Latvians considered themselves to be autocrats, but that leaves more than a quarter of citizens who remained undecided on the matter.556 The conclusion that can be drawn from these percentages is that most Latvians held reservations when it comes to democracy. Despite these numbers, most Latvians believed that democracy is indeed a better form of government than any other (81 %).557 Thus, although Latvians believe that democracy is good, they are not yet convinced of its superiority over other forms of government. The same study shows that many Latvians (46 %) consider a strong, autocratic leader very good or fairly good.558 Koroleva et al. argue that these numbers are commonly found in countries previously belonging to the Soviet Union, where democracy and democratic attitudes have not yet taken root and a strong leader and democracy are not considered mutually exclusive.559 Respondents were also asked to express their opinion towards the effectiveness of democracy and most respondents believed that the democratic system had some considerable weaknesses, especially in the area of economy and, to a lesser extent, decision-making and maintaining order. 73 % of respondents agreed that democratic rule has caused the economic system to run badly. 49 % agreed that democratic regimes were not very capable of maintaining order, and 41 % that democratic regimes were too indecisive.560 Berglund’s 2003 research, based on data from 2001, shows an equally bleak picture in Latvians’ level of satisfaction with democracy, thus showing that little has changed in the

553 Ibid., p. 195. 554 Table from: S. Berglund, ‘Prospects for the Consolidation of Democracy in East Central Europe’, in: Japa- nese Journal of Political Science 4 (2), p. 193. Data from: P. Norris, ‘Introduction: The Growth of Critical Citi- zens’, in: P. Norris ed., Critical Citizens: Global Support For Democratic Governance. Oxford: Oxford Univer- sity Press 1999. 555 I. Koroleva & R. Rungule, ‘Democracy as an Abstract Value’, In: Klingemann, et al. eds., Democracy and Political Culture in Eastern Europe, New York: Routledge 2006, p. 236. 556 Ibid., p. 236. 557 Ibid., p. 236. 558 Ibid., p. 237. 559 Ibid., p. 237. 560 Ibid., p. 238. 234 POLITICS

attitude of the Latvians towards democracy.561 According to his research, only 32 % of respondents were ‘fairly satisfied’ by the way democracy works in their country.

Level of support for government The aforementioned survey also covered people’s opinions on the ideal distribution of roles between individuals and the Latvian state. On a scale from 1 to 10, with 1 meaning that the government should provide for everyone and 10 meaning individuals need to provide for themselves, 1 was the answer given most often.562 When respondents were asked about the role of the government in business, Latvians were very divided. This can be explained by the fact that ‘having experienced […] a state-centred economy, citizens are against total government control, while […] they also fear the emerging market-economy and its impact on the individual employee’.563 In 2004, the Latvian population was again asked about their trust in their government, democracy in general and its governmental institutions. This particular survey was carried out by Eurobarometer, a survey series carried out on behalf of the European Commission. It showed that only 35 % of respondents stated they were satisfied with the workings of democracy in Latvia.564 However, there were clear differences in the level of satisfaction between ethnic Latvians and non-ethnic Latvians, the latter being far less satisfied than the former.565 In 2007, Latvians responded to another Eurobarometer poll, which queried their level of trust in the national government. Not surprisingly, only 20 % of Latvians were satisfied with their government, which is 21 percentage points below the EU average of 41 %.566 On average, it can be said that Latvians are sceptic towards their government and are not yet convinced of the benefits of democracy. This sentiment was generally confirmed during our field research, although it seems as though trust in the current government is higher than the level of trust in previous governments.567 A wide range of observers stated that the Latvi- an governments are generally more occupied with short-term solutions and lacked the vision to form long-term strategies.568

561 S. Berglund, ‘Prospects for the Consolidation of Democracy in East Central Europe’, in: Japanese Journal of Political Science 4 (2), p. 202. 562 I. Koroleva & R. Rungule, ‘Democracy as an Abstract Value’, In: Klingemann, et al. eds., Democracy and Political Culture in Eastern Europe, New York: Routledge 2006, p. 241. 563 Ibid., p. 241. 564 Eurobarometer, ‘Report. Executive Summary’, retrieved from: http://ec.europa.eu/public_opinion/archives/eb/eb61/exec_lv.pdf, consulted on 4 April 2012. 565 Ibid. 566 Eurobarometer, ‘National Report. Executive Summary’, retrieved from: http://ec.europa.eu/public_opinion/archives/eb/eb67/eb67_lv_exec.pdf, consulted on 23 May 2012. 567 Interview R05. 568 Ibid.; interview R31; interview R67. LATVIA AND THE EUROPEAN UNION 235

6.7 Conclusion

In general, it can be said that Latvians are sceptical towards their government and are not yet convinced of the benefits of democracy. During the field research in Latvia people from different backgrounds and working in different fields often mentioned, that the Latvian governments have generally been occupied with short-term solutions and have lacked the vision to form a long-term vision. It must be said however, that trust in the current government is higher than the level of trust in previous governments. Despite this positive trend, Latvia’s satisfaction with democracy is still ranked as one of the lowest in Europe. This might be linked to the turbulent political landscape. The country has seen many different, center-right governments in the past two decades, which were often dismissed due to cases of corruption. However, in recent years, national politics have somewhat stabilised. Perhaps the current government can make the first steps towards making Latvia a consolidated and trustworthy democracy. Latvia’s place on the international scene has been predominantly determined by its choice to join all the international organisations since its independence. After ten years of EU membership, Latvia has matured as a Member State: it now knows its role and position and understands how things work in Brussels. The country is a net-receiver of many EU funds, which has already led to far-reaching development of the country. The next years will show whether a two-speed Europe will evolve. In the case of this happening, Latvia is very eager to remain in ‘Core Europe’. However, this might become difficult, regarding Latvia’s arrears in several sectors. Nonetheless, the country claims to lead the way regarding fiscal austerity, referring to the way Latvia solved its own financial crisis. It is too early to define Latvia’s foreign relations and goals in a few sentences, but one can carefully state that Latvia’s role in the world has been largely influenced by its former ‘occupier’, Russia. The role that Russia played during Soviet occupation of Latvia and in the two decades after that, has shaped Latvian foreign relations, leading them to seek (economic and military security by joining ‘Western’-oriented international organisations and by working closely with its neighbours. Latvia is trying to find its position in the international arena and is therefore setting high ambitions for itself for the near future. Looking back at what Latvia has achieved in the last two decades, these ambitions will most likely be achieved in a matter of years. The role of Russia, however, must not be underestimated, since both countries are intrin- sically linked by its shared history, culture, economy and society. Although grievances about historical events and interpretations still differ, Latvia has to acknowledge that Russia still plays an important role, since, in an interdependent world, a country as strong as Russia simply cannot be ignored.

LATVIA AND THE EUROPEAN UNION 237

7. Economy

7.1 Introduction

Since its independence in 1991, Latvia’s economy has gone through a series of booms and busts. After EU accession in 2004 the country witnessed soaring growth rates and unemployment fell rapidly. However, this boom was followed by a severe bust in 2008 and 2009. The combined effects of a deflating real estate bubble and the global economic downturn caused the Latvian economy to shrink by over a quarter in 2009 – a global record. In addition, the Latvian government faced increasing instability in the country’s financial system. These combined challenges led the government to seek international financial assistance, which should also help stabilise the country to adopt the euro by 2014. Latvia’s economy is heavily service-based, with a large trading and transportation sector. As will be discussed below, this provides both opportunities and challenges. Two economic sectors will be analysed in particular detail: the energy sector, because of its strategic importance, and the agricultural sector, because of its connection with regional development. More broadly, the organisation and impact of EU structural funds on Latvia as a whole, and Latgale (its poorest region) in particular, will also be reviewed. As has briefly been discussed in section 3.10, Latvia’s experience with communism has made the current economic system highly liberal. This has also impacted the labour market and the public’s stance towards social security and other government support. These socioeconomic issues will be explored further in this chapter. Finally, Latvia’s extensive shadow economy will also be discussed, since it has become much more visible due to the economic crisis.

7.2 Key sectors

The most important sectors of the Latvian economy are trade, industry, the forest sector and the banking sector. The service sector is by far the most important overarching sector of the Latvian economy. In 2010, this sector’s share of GDP was 74 %.1 The service sector consists of logistics, IT, financial services and trade. Manufacturing (industry) only contributes 13.4 % to the Latvian GDP.2 This sector consists of activities in wood, metal, chemicals, pharmacy and food.

7.2.1 Trade Latvia has an export driven economy, because the Latvian population is too small to provide a

1 Ministry of Finance of the Republic of Latvia, ‘Investor presentation’, April 2012, p. 3. 2 Ibid., p. 3. 238 ECONOMY

large consumption market.3 The trade sector has recovered well from the recession.4 Whereas the export of merchandise, for example, shrank during 2009, it grew steadily in 2010 and 2011, with 19.8 % growth in the fourth quarter of 2011 compared to the fourth quarter of 2010.5 Latvia’s location at the shore of the Baltic Sea provides the country with an opportunity to realise a large trading network. Not only does trade provide many jobs for Latvians, it is also economically important.6 About 14 % of the total Latvian GDP is realised through trade, especially with Russia and the other countries of the former Commonwealth of Independent States (CIS).7 The countries near the Baltic Sea are also important trading partners, since 70 % of total trade is realised with these countries.8 The balance of Latvian external trade was -1.6 billion euros in 2010, which is almost the same as in 2009 (-1.5 billion euros).9 This means that the total value of imports was higher than the total value of exports. A possible explanation for this is that value-added production facilities are scarce in Latvia. For example, wood is often exported in a raw form. If Latvia would make for instance furniture out of the wood it would add a lot of value to the product.10 The transit (transport) sector is one of the largest industrial sectors in Latvia.11 The sea- ports of Riga, Ventspils and to a lesser extent Liepaja are crucial in the transport sector, because some 90 % of Latvia’s total trade is realised through shipment. Railing comes second.12 The port of Riga is the biggest port in the Baltic states. It is bigger than the ports of Tal- linn and Vilnius.13 As far as short sea shipping (SSS) is concerned, the port of Riga plays an important role in the EU.14 SSS is a term that is used to describe coastal shipment, where boats only navigate through parts of a sea or ocean and do not cross an entire ocean directly.15

3 Interview R19. 4 Interview R08. 5 Ministry of Finance of the Republic of Latvia, ‘Investor presentation’, April 2012, p. 3. 6 Interview R43. 7 The World Bank, ‘Transport, Latvia’, year unknown, retrieved from http://web.archive.org/web/20080908042001/http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/E CAEXT/EXTECAREGTOPTRANSPORT/0,,contentMDK:20647605~pagePK:34004173~piPK:34003707~theS itePK:571121,00.html, consulted on 12 February 2012. 8 Interview R19. 9 Eurostat, ‘International trade in goods, figure: external trade, 2009-2010 (EUR 1000 million)’ (May 2011), retrieved from: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:External_trade,_2009- 2010_%28EUR_1_000_million%29.png&filetimestamp=20111207151950, consulted on 11 April 2012. 10 Interview R43. 11 Latvian Institute, ‘Industry Profiles of Latvia’ (2006), retrieved from http://www.li.lv/index.php?option=com_content&task=view&id=121&Itemid=1125, consulted on 12 February 2012. 12 The World Bank, ‘Transport, Latvia’, retrieved from http://web.archive.org/web/20080908042001/http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/E CAEXT/EXTECAREGTOPTRANSPORT/0,,contentMDK:20647605~pagePK:34004173~piPK:34003707~theS itePK:571121,00.html, consulted on 12 February 2012. 13 Interview R19. 14 Eurostat, ‘Maritime transport statistics - short sea shipping of goods’, retrieved from: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Maritime_transport_statistics_- _short_sea_shipping_of_goods#Top_EU-27_ports, consulted on 16 March 2012. 15 Ibid. LATVIA AND THE EUROPEAN UNION 239

In 2009, Riga ranked 16th in the list of most important SSS ports of the EU, the highest ranked SSS port of the new Member States. In the SSS of dry bulk, Riga even scored highest of all EU ports. In total port activity, the growth rate of Latvia’s ports scored below the EU average in 2010.16 The activity of the total goods handled in all EU ports grew 5.7 % in 2010 compared to 2009, whereas the total goods handled in Latvian ports decreased by 2.3 %, from 58.6 million tonnes in 2009 to 57.1 million tonnes in 2010.17 Latvia’s main trading partners of goods are the other 26 EU countries and only to a small extent non-EU countries.18 The percentage of the total goods traded intra-EU through shipment, serves as a good indicator for this. Com- pared to other EU countries Latvia had the largest share of intra-EU trade in goods in 2010, compared to extra-EU trade in goods.19 Latvia’s intra-EU trade amounted to 74 % of the total, whereas extra-EU trade amounted to 25 % of the total in 2010.20 The average of the EU was 26 % intra- and 63 % extra-EU trade in 2010. When looking at trade of goods through shipping within the national borders Latvia scores low (in 2010), with 0 %, compared to the EU average of 10 %.21 The Riga port has firm competition from the Tallinn port, which is the only Baltic port in the top 20 ports of the EU (on the basis of gross weight of goods handled in million tonnes). In 2009 Ainars Slesers, then vice-mayor of Riga as well as the board chairman of the Riga port, announced that several 100 million lats would be invested in the port of Riga in the coming four years by the Latvian state, the EU’s structural funds and private investors.22 However, the ‘several 100 million lats’ were never invested in the Riga port;23 it turned out to be a slightly politically coloured statement.24 Despite this disappointment the port has invested in the development of infrastructure itself in the past years.25 The plan for the coming years is to move the harbour activity that is currently left in the city of Riga more towards the river mouth.26

16 Eurostat, ‘Maritime ports freight and passenger statistics, figure: Seaborne transport of goods between main ports in the reporting country and their partner ports grouped by main geographical areas (in % of total gross weight of goods transported)-2009-2010’ (January 2012), retrieved from: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Seaborne_transport_of_goods_between _main_ports_in_the_reporting_country_and_their_partner_ports_grouped_by_main_geographical_areas_%28in _%25_of_total_gross_weight_of_goods_transported%29-2009-2010.PNG&filetimestamp=20120223103625, consulted on 10 April 2012. 17 Ibid. 18 Ibid. 19 Ibid. 20 Ibid. 21 Ibid. 22 Baltic News, The Free Library, Wire Reports, ‘Rapid development planned for Riga’s port’ (2009), retrieved from: http://www.thefreelibrary.com/Rapid+development+planned+for+Riga%27s+port.-a0208134028, consulted on 10 April 2012. 23 Interview R34. 24 Ibid. 25 Ibid. 26 Ibid. 240 ECONOMY

7.2.2 Industry At the end of the Soviet occupation of Latvia the share of industries as part of the total GDP amounted to around 35 %.27 This number dropped after independence, since the Latvian industry was not able to compete adequately in the world market.28 The share of the industry sector dropped to 9 % of GDP just before the most recent financial crisis. In 2007, 158 000 people were employed in the manufacturing industry.29 At the moment, the share of manufacturing is back at 13.4 % of GDP and increasing.30 The annual growth rate for Latvian industry, excluding construction, was reasonably high before the crisis. In 2008 industry still experienced a growth of 15.7 % (at gross series of the domestic output price index), but in 2009 a sudden drop to a negative growth of -1.8 % was recorded.31

7.2.3 Forest sector A crucial sector in the Latvian economy, which survived the crisis quite well, is the forest sector.32 The forest sector is of strategic importance to the Latvian economy as 8 % of all Lat- vian companies are linked to the forest sector and it employs around 5 % of Latvia’s labour force.33 It contributes roughly 5 % to the GDP.34 In 1923, 27 % of the Latvian land was covered by forest. This amount has increased significantly: today the amount of forest, including marshes and meadows, reaches over 50 % of the Latvian territory.35 This growth of forest is expected to continue as artificial afforesting continues and natural overgrowing of abandoned agricultural areas will continue. The most dominant forest trees are coniferous trees, which cover almost half of the forest area, and birch trees, which account for 28 % of the forests.36 The Latvian forest sector has two main sub-sectors: forestry, which deals with forest preservation, maintenance, renewal and planning; and the timber industry, which includes the production of wood, paper, manufacturing components and furniture.37 The Latvian forest

27 Interview R19. 28 Ibid. 29 Eurostat, Europe in figures: Eurostat yearbook 2011, Luxembourg: Publications Office of the European Union 2011, p. 313. 30 Ministry of Finance of the Republic of Latvia, ‘Investor presentation’, April 2012, p. 3; interview R19. 31 Eurostat, Europe in figures: Eurostat yearbook 2011, Luxembourg: Publications Office of the European Union 2011, p. 332. 32 Interview R76; Latvia Forest Industry Federation, Forest Sector in Latvia 2008, Riga: Latvia Forest Industry Federation 2008, p. 11. 33 Latvia Forest Industry Federation, ‘Forest Sector in Latvia 2008’, Riga: Latvia Forest Industry Federation 2008, p. 11. 34 Forest Department of the Ministry of Agriculture, Latvia’s forests during 20 years of independence, Riga: BALTI Group 2011, p. 35. 35 Ibid., p. 11; interview R76. 36 Latvia Forest Industry Federation, Forest Sector in Latvia 2008, Riga: Latvia Forest Industry Federation 2008, p. 7. 37 Ibid., p. 11. LATVIA AND THE EUROPEAN UNION 241 sector yearly produces around 12 million m3 of timber, a little less than half of which is cut in state-owned forests and over half of which is cut in private-owned forests.38 The value of the turnover of the forest sector was almost 2 billion euros in 2007.39 The timber industry is also expected to become increasingly important for the energy production, as the manufacturing of timber products intended for the energy market increases. The amount of timber in the total energy balance of Latvia in 2008 reached a level of 23.5 % and this share has remained stable over the last several years.40 Traditionally, forest is used for heating in private houses in Latvia, which is necessary six to seven months per year.41 Improvement of technologies, cooperation with private forest owners and optimal use of forestry scraps suitable for energy production could make it possible to double the use of timber for the energy industry. This could be beneficial for Latvia’s future heat production and energy independence. (For a detailed discussion of the role biomass plays in Latvia’s energy policy, please refer to page 279.) The forest sector can be seen as a crucial export sector of the Latvian economy. Export of woodworking products in 2008 has reached a peak, compared to the last two decades.42 But there is more to gain for Latvia in the processing sector of the wood. Nowadays, the wood is partly shipped to other countries as a raw material. A lot of value can be added to the wood when Latvian companies would make products of the wood, such as furniture. This increases the value of each cubic metre of wood and makes the export more beneficial. So this value- added production has the potential to be profitable for Latvia.43 At the Latvia University of Agriculture, situated in Jelgava, the economic importance of the forest industry has been confirmed by the number of applicants in forest studies. During these economically harsh times it is remarkable that the number of students that assigned at the forest faculty increased significantly in 2011.44

7.2.4 Construction industry Construction and real estate used to be big sectors before the crisis, but now they are much smaller.45 Since construction is a labour-intensive sector, many construction workers have

38 Forest Department of the Ministry of Agriculture, Latvia’s forests during 20 years of independence, Riga: BALTI Group 2011, p. 31. 39 Latvia Forest Industry Federation, Forest Sector in Latvia 2008, Riga: Latvia Forest Industry Federation 2008, p. 11. 40 Ibid., p. 19; interview R76. 41 Interview R76. 42 Information export support website of the Belarusian National Centre for Marketing and Price Study, ‘Forest industry exports at LVL 1.175 bln in 2011; growth 15.7 %’ (22-02-2012), retrieved from: http://export.by/en/?act=news&mode=view&id=40433, consulted on 18 March 2012. 43 Interview R43. 44 Forest Department of the Ministry of Agriculture, Latvia’s forests during 20 years of independence, Riga: BALTI Group 2011, p. 25. 45 Interview R43. 242 ECONOMY

been laid off since the recession.46 A large part of the construction that pulled the average of the sector’s performances down during the latest recession, was residential construction.47 Before the crisis, mortgage lending stimulated the demand for residential construction, because it made it easier for people to buy residences.48 In 2005, 2006, 2007 and 2008 the annual growth rates for construction (concerning gross series for new residential buildings) were high, with respectively 11.8 %, 19.5 %, 31.6 % and 15.6 %.49 This construction boom had severe effects for labour safety in Latvia, as is discussed in section 7.6.5. When the crisis hit, mortgages were not provided that easily anymore and as a result residential construction decreased.50 In 2009 this number had even decreased to -6.2 %.51 However, because of the recovery of the trade sector in Latvia the construction sector has also rebounded: the number of infrastructure projects and the construction of production units are increasing again.52

7.2.5 Banking sector The commercial banking sector in Latvia plays a large role in the funding of the real economy. The banks are the main source of funding for companies in Latvia.53 The last couple of years the Latvian banking sector, which is predominantly owned by foreign banks, was confronted with some problems: the government found it necessary to nationalise Parex Bank in November 2008 in order to stabilise the turbulent banking system. In Latvia the banking sector recovered strongly from the crisis. When measuring the financial strength and stability of a country’s banks, a common measure is the Capital Adequa- cy Ratio (CAR).54 This is a percentage ratio that shows the banks’ primary capital to its assets (loans and investments). In Latvia the minimum CAR lies at 8 %.55 However, the actual Ade- quacy Ratio for the Latvian banks amounted to 17.4 % in February 2012.56 This shows that Latvia’s banking sector remains well capitalised.57 The liquidity of Latvia’s banks seems to be sufficient too: in February 2012 the liquidity ratio amounted to 62.3 % of total capital, where

46 Interview R08. 47 Ibid. 48 Ibid. 49 Eurostat, Europe in figures: Eurostat yearbook 2011, Luxembourg: Publications Office of the European Union 2011, p. 334. 50 Interview R08. 51 Eurostat, Europe in figures: Eurostat yearbook 2011, Luxembourg: Publications Office of the European Union 2011, p. 334. 52 Interview R08. 53 Ibid. 54 Reserve Bank of New Zealand, ‘Capital adequacy ratios for banks – simplified explanation and example of calculation’, retrieved from: http://pages.stern.nyu.edu/~igiddy/articles/capital_adequacy_calculation.pdf, consulted on 12 June 2012, p. 1. 55 Ministry of Finance of the Republic of Latvia, ‘Investor presentation’, April 2012, p. 14. 56 Ibid., p. 14. 57 Ibid., p. 14. LATVIA AND THE EUROPEAN UNION 243 a minimum of 30 % is required.58 However, the number of loans provided by the banks that are not paid back in time has increased largely from 2007 onwards.59 Measuring all the loans that are paid past due, as a percentage of all the loans, this amounted to 7.1 % in the third quarter of 2007. This number increased to 11.7 % in the third quarter of 2008, 25.2 % in the third quarter of 2009 and 28.5 % in the third quarter of 2010. However, a decrease towards 24.5 % can be noticed in the fourth quarter of 2011.60 The banking sector seems to have overcome the financial crisis as far as profits are concerned.61 Whereas in 2008 the profit was still marginally positive (100 million dollars), in 2009 the loss amounted more than 1 400 million dollars, in 2010 a loss of around 600 million dollars, and in 2011 a loss of 300 million dollars.62 A gradual improvement can clearly be noticed.

7.2.6 Tourism

A relatively small number of people is employed in the tourism industry in Latvia. For example, in 2007 there were only 32 000 people employed in hotels and restaurants.63 International tourism contributes little to the GDP of Latvia, especially compared to the share that international tourism has in Estonia’s GDP. In Latvia, the share of international tourism to the total GDP was 2.2 % in 2005,64 whereas in Estonia this number was 6.9 % in the same year.65 A side mark to this is that these numbers only present the contributions of ‘foreigners’ to the tourism revenues. The share of Latvians to their own tourism revenues is not included in this number. The proportion of international tourism compared to the total tourism in Latvia is 61.2 %.66 The direct share of the tourist and travel sector as a percentage of total GDP is around 3 %.67 As can be seen in Figure 7.1, the tourist and travel industry is gradually rising. The data up to 2010 are real data and the data of 2011 and 2021 are forecasts, made by the World Travel & Tourism Council.

58 Ibid., p. 14. 59 Ibid., p. 14. 60 Ibid., p. 14. 61 Ibid., p. 14. 62 Ibid., p. 14. 63 Eurostat, Europe in figures: Eurostat yearbook 2011, Luxembourg: Publications Office of the European Union 2011, p. 313. 64 Eurostat, Panorama on tourism, Luxembourg: Office for Official Publications of the European Communities 2007, p. 52. 65 Ibid., p. 45. 66 Ibid., p. 52. 67 World Travel & Tourism Council, ‘2011: Latvia’, retrieved from http://www.wttc.org/site_media/uploads/downloads/latvia.pdf, consulted on 13 February 2012. 244 ECONOMY

Figure 7.1: the direct contribution of travel and tourism to GDP in Latvia, in million lats (left) and in % of the total GDP.68 The development of tourism is promoted by the Latvian government by investments in marketing campaigns and the development of infrastructure projects, such as the International Airport of Riga. Tourism industry companies also benefit from a reduced value-added tax rate: 12 % instead of the standard rate of 22 %.69

7.2.7 Agriculture The share of agriculture in the Latvian GDP is gradually declining. In 2002 it amounted to 2.6 % and in 2010 it had dropped to 1.7 %. In 2010 the total agricultural turnover was 216 million lats.70 Since 2002 the number of people employed in agriculture has also been steadily declining. Whereas in 2002 11.4 % of the Latvian population was employed in agriculture, it had dropped to 7.0 % in 2010.71 The agricultural sector is described in more detail in section 7.9 (page 281).

7.2.8 Fishery In Latvia the share of fisheries in the GDP has gradually decreased, from 1.1 % in 2006 to 0.7 % in 2010.72 Moreover, the share of fisheries in the total amount of Latvia’s export has decreased, from 3.1 % in 2006 to 2.0 % in 2010.73 Despite the fact that the fishery sector only

68 Ibid. 69 Author unknown, ‘Economy of Latvia’, retrieved from http://balticexport.com/?article=latvijas- ekonomika&lang=en, consulted on 13 February 2012. 70 Ministry of Agriculture of the Republic of Latvia, Agriculture of Latvia, Riga: Ministry of Agriculture (year unknown, probably 2011/2012), p. 13. 71 Ibid., p. 11. 72 Ministry of Agriculture of the Republic of Latvia, Department of Fisheries, ‘Latvia’s Fisheries and Trade’, retrieved from: http://www.eurofish.dk/pdfs/Istanbul-presentations/Countries/Latvia.pdf, consulted on 10 April 2012. 73 Ibid. LATVIA AND THE EUROPEAN UNION 245 employs 1.1 % of the working population of Latvia, it has an important role in the social and economic regional development of Latvia, especially in the countryside.74 The number of vessels is also declining. In 2007, the fishing fleet of Latvia consisted of almost 900 vessels, of which 734 vessels fish in the offshore waters of the Baltic Sea and the Gulf of Riga.75 As of 1 January 2012 the Latvian fishing fleet consisted of 731 vessels, of which 648 vessels were operating in Baltic coastal fishery, 74 in Baltic Sea offshore fishery and 9 vessels in high sea fishery.76 The amount of fish caught is similarly declining. The total Latvian catch in 2010 was 164 503 tonnes of fish.77 In 2011, a total of 154 513 tonnes of fish has been caught.78 The biggest part of the catch has been made by large vessels. However, the number of small vessels in Latvia’s fleet is large. Fishing in coastal waters (up to 20 meters isobaths) accounts for only 1.5 % of the total Latvian catch and almost half of the vessels used in coastal waters are without engine.79 Fishing vessels outside the coastal waters in the Gulf of Riga and the Baltic Sea combined with high-seas fishery with large ships going to international waters account for the rest of the Latvian catch. Despite the overall decline, fishery is an important sector for Latvia. There is a net export in Latvia’s fisheries sector. In the last three years, exports to EU countries have increased by 53 %.80 The main Latvian trading partners in fishery in the EU are Denmark, Germany, France, Lithuania, Estonia and Poland. In export to non-EU countries the main partners are Morocco, Belarus, Mauritania, Ukraine and Russia.81 Besides fishing, there are three other areas of activity within the fishery sector. The first area is aquaculture or fish farming, which in Europe accounts for almost 20 % of the fish production, but in Latvia for only 0.2 % of the total fish catch.82 In the aquaculture industry, fish and also aqua plants are cultivated under controlled conditions. In Latvia there currently are 241 fish farms and most of them consist of fishponds producing different kinds of fish and crayfish.83 Secondly, Latvia has a big canning industry; in 2010 there were 107 fish pro-

74 Interview R75. 75 Ministry of Agriculture of the Republic of Latvia, Operational Programme for the Implementation of the Eu- ropean Fisheries Fund Support in Latvia for 2007 – 2013, Riga: Ministry of Agriculture of the Republic of Lat- via 2007, p. 06. 76 Ministry of Agriculture of the Republic of Latvia, ‘Marine fisheries’, retrieved from: http://www.zm.gov.lv/?sadala=2089, consulted on 10 April 2012. 77 Ibid. 78 Ibid. 79 Ibid. 80 Ministry of Agriculture of Latvia, Department of Fisheries, ‘Latvia’s Fisheries and Trade’, retrieved from: http://www.eurofish.dk/pdfs/Istanbul-presentations/Countries/Latvia.pdf, consulted on 10 April 2012. 81 Ibid. 82 Ministry of Agriculture of the Republic of Latvia, ‘Aquaculture’, http://www.zm.gov.lv/?sadala=2085, consulted on 6 April 2012; European Commission, ‘Aquaculture-Fish Farming’, retrieved from: http://ec.europa.eu/fisheries/cfp/aquaculture/index_en.htm, consulted on 6 April 2012. 83 Ministry of Agriculture of the Republic of Latvia, ‘Aquaculture’, retrieved from: http://www.zm.gov.lv/?sadala=2085, consulted on 6 April 2012. 246 ECONOMY

cessing companies in Latvia.84 The third area is the marketing of fishery products; active marketing is for example necessary to stimulate the Latvian export of fishery products. Just like with agriculture, the EU also has a Common Fisheries Policy (CFP), aimed at managing fishery and to achieve a competitive and sustainable European fishing industry.85 The European Fisheries Fund (EFF) has a budget of 4.3 billion euros for 2007 – 2013 and funding is available for fishing, aquaculture and the processing and marketing of fisheries products.86 The EFF has allocated a total of 125 million euros to Latvia for the period of 2007 – 2013. The funds coming from the EFF are very important for the Latvian fishery sector; they attract for example entrepreneurs in the fishery sector. In general, Latvia is content with the CFP but they are more reserved about the fact that they are not really able to influence the common policy affecting them.87 One expert emphasised that it is remarkable that 27 Member States decide on the Baltic Sea, whilst only 8 Member States are connected to it.88 Therefore, despite the fact that the majority of the Baltic Sea region countries are sometimes unhappy with a decision, nonetheless it is taken because there is a majority in the 27-member Coun- cil.89 This is especially true regarding the EU decision on the reduction of quotas in the Baltic Sea, which is problematic for Latvia.90

7.3 Financial crisis and aftermath

Latvia’s economy has been hit relatively hard by the financial crisis compared to other EU Member States.91 The income level upon entering the EU was at around 45 % of the EU- average.92 During the boom years of 2005 and 2006 this grew to 60 %, but after the crisis it dropped again to 55 %.93 This is one of the many indicators of Latvia being affected by the crisis. Other indicators are high unemployment (discussed separately in section 7.6.1), plum- meting exports and decreasing household consumption and borrowing, and a peak in net emigration. In February 2009, public unrest reached its peak when Latvians blamed their government for the rising unemployment and the weak economy and expressed their lack of con-

84 Ministry of Agriculture of the Republic of Latvia, ‘Fish Processing’, retrieved from: http://www.zm.gov.lv/?sadala=2087, consulted on 7 April 2012; interview R75. 85 European Commission, ‘Common Fisheries Policy’, retrieved from: http://ec.europa.eu/fisheries/cfp/index_en.htm, consulted on 6 April 2012. 86 European Commission, ‘European Fisheries Funds - Fact Sheet’, retrieved from: http://ec.europa.eu/fisheries/documentation/publications/cfp_factsheets/european_fisheries_fund_en.pdf. consulted on 18 March 2012. 87 Interview R75. 88 Ibid. 89 Ibid. 90 Ibid. 91 T. Parry, CBC News, ‘Europe’s sickest country’, retrieved from: http://www.cbc.ca/news/world/story/2009/02/26/f-rfa-parry.html, consulted on 18 March 2012. 92 Interview R19. 93 Ibid. LATVIA AND THE EUROPEAN UNION 247 fidence during the worst riots Latvia had seen since 1991.94 As a result, the centre-right coalition government of Latvia resigned in February 2009.95

7.3.1 Causes of the financial crisis

Vanags states that the Latvian recession was the worst recession in Europe.96 He argues that the booming of the housing and property prices around 2005, which was a normal development compared to the rest of the world, made people feel richer and made them consume and borrow more. ‘And then, the real estate bubble began to deflate and we were hit by the general effects of the world financial crisis’, Vanags says. The main cause of the crisis was that there was too much money in circulation, partly caused by the banks that were lending out a lot of money.97 Also, after the accession to the EU in 2004, there were a lot of capital inflows that were producing very strong overheating pressures, particularly in the labour market.98 As a consequence the inflation went up temporarily.99 There was also a sudden large external demand and as a consequence the export rose significantly.100 Furthermore, domestic consumption was high and the Latvian economy was too open, too flexible and without regulations controlling this growth.101

7.3.2 Exports during the crisis Latvia’s exports have also been affected by the crisis. In April 2009, exports plummeted by more than 40 % compared to April 2008. After the bad year of 2009, exports rose again in 2010. In 2011 exports rose with almost 30 %, and up to April 2012 they rose again with almost 20 %.102

7.3.3 Household consumption and borrowing during the crisis Hugh claims that the consumer demand has until now not recovered completely from the 2009 recession. He argues that it is not likely to rise again in the near future because of an ageing population and debt problems. Observing the total Latvian household consumption, as displayed in Figure 7.2 below, a sharp decrease can be noticed in 2008 already, probably because of a loss of confidence. In 2009 household consumption reached its lowest point, after

94 T. Parry, CBC News, ‘Europe’s sickest country’, retrieved from: http://www.cbc.ca/news/world/story/2009/02/26/f-rfa-parry.html, consulted on 18 March 2012. 95 Huffington Post, ‘Latvia’s government resigns amid economic crisis’, retrieved from: http://www.huffingtonpost.com/2009/02/20/latvias-ivars-godmanis-re_n_168564.html, consulted on 18 March 2012. 96 T. Parry, CBC News, ‘Europe’s sickest country’, retrieved from: http://www.cbc.ca/news/world/story/2009/02/26/f-rfa-parry.html, consulted on 18 March 2012. 97 Interview R19. 98 Interview R08. 99 Ibid. 100 Interview R19. 101 Ibid. 102 Ibid. 248 ECONOMY

which it recovered in 2010.103

Figure 7.2: Household consumption in Latvia (in billion Euros).104

Another indication of the wellness of an economy is citizens borrowing money and generating money circulation. Until the summer of 2007, the total household borrowing increased every month with around 75 % compared to the previous year.105 This indicates that Latvians had confidence in the booming Latvian economy. A decline in the increase of household borrowing started in the summer of 2007. In April 2009 the tipping point was reached: consumer borrowing started to decrease compared to April 2008. The most recent figures show a fall of household borrowings of 9 % per year, implying there is still little confidence of the Latvians in the economy.106

7.3.4 Emigration Latvia has experienced net emigration in the last decade.107 Many people in the labour force leave the country, because the salaries in western European countries are four or five times higher than in Latvia and there are better conditions when one gets unemployed.108 When abroad, Latvians usually work in low-skilled sectors like construction, agriculture and the service industry.109 As a result of the crisis the net emigration intensified in 2008 and in 2009, while in 2011 the outflows started to decrease again, perhaps because of the improving economic situation of the country.110

103 E. Hugh, Latvia economy watch, ‘BELLs in hell that don’t go ting a ling a ling’, retrieved from: http://latviaeconomy.blogspot.com/, consulted on 19 March 2012. 104 Ibid. 105 Ibid. 106 Ibid. 107 Ibid. 108 Interview R19. 109 Interview R08. 110 Ibid. LATVIA AND THE EUROPEAN UNION 249

Two potential problems can arise as a result of the emigration of the past years. Firstly, there is a possibility that Latvia will suffer from labour shortage, because the majority of emi- grants belongs to Latvia’s labour force. The risk of a ‘brain drain’, where well-educated people leave the country, is also present.111 In Latvia there is a real shortage of high-skilled pro- fessionals.112 Secondly, the unsustainability of the pension system and the welfare system is a potential problem. Latvians are getting older but there are no employment opportunities for the people who have to work longer.113 If many Latvian labourers emigrate, it will be increasingly harder for the remaining Latvian labourers to provide the Latvian children and elderly with financial assistance. There is a risk of a huge population decline in the medium-term.114

7.3.5 The Latvian ‘example’ Latvia has had one of Europe’s toughest crises, but nowadays Latvia is widely seen as a country that is good at solving crises.115 The Latvian Minister of Finance even gives speeches abroad to explain ‘the Latvian example’.116 The Latvian case seems to have worked, since most of the GDP decline came from the period before the consolidation took off, in the summer of 2009.117 From that period onwards there has been stabilisation and recovery.118 Latvians believe that acting fast, cutting hard and raising taxes are the main ingredients for a successful solution for the financial crisis.119 There is a political factor which contributed to the fast implementation of the austerity measures.120 In the beginning of the crisis there was a minority government, so the support of the opposition was needed to implement the measures of consolidation. The opposition understood the necessity of this for the country and supported the austerity measures. Hereby, a majority was easily formed when voting took place in the parliament. The role of the Bank of Latvia in trying to solve the crisis has been to coordinate everything concerning the funding of last resort of the Parex Bank, to lower the interest rates and reduce its own reserve requirements.121 However, the government chose for a mathematical solution during the crisis, by cutting and looking at the fiscal balance. The government did not make any long-term goals.122

111 Interview R43. 112 E. Marino, Latvia economy watch, ‘The social impacts of the economic slowdown’, retrieved from: http://latviaeconomy.blogspot.com/, consulted on 19 March 2012. 113 Interview R43. 114 E. Marino, Latvia economy watch, ‘The social impacts of the economic slowdown’, retrieved from: http://latviaeconomy.blogspot.com/, consulted on 19 March 2012. 115 Interview R43. 116 Interview R19. 117 Interview R08. 118 Ibid. 119 Interview R19. 120 Ibid. 121 Interview R08. 122 Interview R43. 250 ECONOMY

7.4 Latvian government finances

7.4.1 2004-2007: Real estate bubble Between 2000 and 2007, the Latvian GDP rose with a yearly average of nine per cent, which was the fastest in the EU.123 While this growth could have been interpreted as Latvia converg- ing to the economic standards of other EU members, the boom turned out to be based on a real estate bubble. This became apparent in 2006, with house prices rising 60 % per year in 2005 and 2006, and with the credit supply growing by over 50 % per year.124 According to the IMF, the bubble was to some extent inflated further by pro-cyclical government policies: revenue spending was high and there was a significant influx of EU funds.125 Since the EU funds Latvia receives are mostly earmarked for structural development, it seems likely that these funds contributed to the boom in construction work. Much of the liquidity that was needed to fuel this real estate boom was supplied by foreign banks. In 2008, the majority of assets (almost 60 %) were controlled by foreign-owned banks; most of these banks are based in Sweden and other Nordic countries.126 Partially as a result of this, the majority of loans were denominated in foreign currency instead of in lats; in 2008, these foreign currency loans accounted for around 90 % of all private loans.127 As described on page 258, this may explain why the Latvian government has been so determinate about not devaluating the lats: it would instantly multiply Latvia’s foreign debt burden. In a further sign of how the influx of foreign credit helped inflate the real estate bubble, the IMF reports that around a quarter of all corporate loans were extended for construction.128 The IMF and the Bank of Latvia already warned the Latvian government about the overheating of the economy due to excessive liquidity in 2006.129 They warned not only against the effect of foreign bank lending, but also against Latvia’s loose tax regulation for income de- rived from real estate. The IMF noted that the pro-cyclical fiscal policies were all the more worrisome considering the lack of monetary policy instruments that could be used to cool down the economy.

7.4.2 2007-2011 economic crisis In the beginning of 2007, the worldwide financial and economic crisis started to affect Latvia negatively. The slowdown of the Latvian economy in 2008 coincided with this worldwide

123 IMF, ‘Republic of Latvia: Request for Stand-By Arrangement - Country Report No. 09/3’, 19 December 2008, p. 5. 124 Ibid., p. 5. 125 Ibid., p. 5. 126 Ibid., p. 6. 127 Ibid., p. 33. 128 Ibid., p. 33. 129 IMF, ‘Republic of Latvia - 2006 Article IV Consultation Mission: Preliminary Conclusions’, retrieved from: https://www.imf.org/external/np/ms/2006/060606a.htm, consulted on 8 April 2012; interview R08. LATVIA AND THE EUROPEAN UNION 251 financial crisis, which may explain why Latvia has been ‘among the hardest hit’130 by the global economic downturn. The 2008 global financial crisis, which fully erupted with the collapse of the U.S. investment bank Lehman Brothers, affected Latvia like it did most countries: capital flows dried up and foreign investors pulled back their assets. Combined with several credit rating downgrades in November 2008, the Latvian financial sector faced severe difficulties.131 During this crisis, Latvia’s short-term maturity debt – debt with a maturity of one year or less132 – rose significantly compared to 2007. In late 2008 and early 2009, Latvian macroeconomic conditions weakened abruptly. This was a reflection of the collapse of the domestic demand, the burst of the credit and housing bubble and the significant deterioration in the external economic environment.133 These developments, together with continued rumours about an impending devaluation of the lats (see below), led to a run on the Parex Banka. Towards the end of 2008, the Latvian banking system suffered from liquidity tensions and the Parex Banka had lost 19.2 % of its non-resident deposits compared to a year earlier.134 Since Parex was the largest domestic bank and the former largest independent Baltic Bank, its collapse would have had far-reaching consequences for the Latvian financial sector and the rest of the Baltic region.135 In order to make sure that Parex could meet its obligations, the Latvian government was forced to nationalise the bank. By acquiring a majority stake at two euros per share and by recapitalising Parex, this nationalisation led to expenditures in excess of one billion euros.136 The Parex Bank was the first major casualty of the global credit crisis in the former East- ern Bloc. The neighbouring countries Estonia and Lithuania responded relieved to the take- over, fearing a domino effect in the economically vulnerable region if the bank would have collapsed.137 Since the Latvian financial system remained functional in 2009, it might be said that the government bailout was a success, in the sense that it achieved the goal of preventing total financial meltdown. However, this success came at a cost. The recapitalisation of Parex alone cost around 800 million lats, or five per cent of GDP.138 Together with other stabilisation measures for the

130 European Bank for Reconstruction and Development, ‘Transition Report – Crisis and transition: The people’s perspective’, 2011, p. 4. 131 E. Sumilo and M. Apsalone, ‘The impact of international financial crisis on capital migration into Latvia’, Baltic Rim Economies (2), 2009, pp. 34-35. 132 Ehow, ‘Long-term Vs. Short term Debt’, retrieved from: http://www.ehow.com/facts_5986191_long_term- vs_-short_term-debt.html, consulted on 8 April 2012. 133 European Central Bank, ‘Convergence Report’, May 2010, p. 44. 134 E. Sumilo and M. Apsalone, ‘The impact of international financial crisis on capital migration into Latvia’, Baltic Rim Economies (2), 2009, pp. 34-35. 135 I. Kasjanovs and A. Kasjanova, ‘The Crisis in Latvia: reasons and consequences’, World Economics 12 (3), 2011, p. 112. 136 A. Skudra, ‘Latvia’, in: Jan Putnis (Ed.), The Banking Regulation review, London: Law Business Research 2010, pp. 198. 137 NRC Handelsblad, ‘Letse overheid nationaliseert bank Parex’, retrieved from: http://vorige.nrc.nl/economie/article2055339.ece/Letse_overheid_nationaliseert_bank_Parex, consulted on 17 March 2012. 138 I. Kasjanovs and A. Kasjanova, ‘The Crisis in Latvia: reasons and consequences’, World Economics 12 (3) 252 ECONOMY

financial sector, expenditures to maintain the currency peg, and a soaring fiscal deficit, Prime Minister Godmanis announced his administration would have to seek international financing assistance in order to cope with the effects of the crisis. This international financial assistance was highly needed in order to stabilise the financial sector and to restore confidence. 139

7.4.3 EU and IMF structural funds The major Latvian fiscal imbalances prompted the Latvian government to turn to the EU, the IMF and neighbouring countries for financial assistance. In total, Latvia was granted an international financial aid package of which they could borrow up to a total of 7.5 billion euros in the period up until the first quarter of 2011. The EU, the IMF, and a few neighbouring countries provided for this Latvian aid package.140 The EU provided the major part of this financial assistance. The ECOFIN Council decided on 20 January 2009 to provide a total amount of up to 3.1 billion euros in financial assistance to Latvia. Both parties, Latvia and the EU, signed a Memorandum of Understanding on 26 January 2009. This Memorandum specified the fiscal, financial sector, and structural reform conditions attached to this assistance. These conditions included the need for fiscal consolidation, measures to strengthen fiscal governance, reforms in the financial sector, regulation and supervision, and other fiscal reforms that are required in order to meet the objectives that were set out in the context of the Lisbon Strategy.141 The payment of the six instalments were planned in respectively each of the four quarters of 2009, in the third quarter of 2010 and finally in the first quarter of 2011. The European Court of Auditors was responsible for the technical or financial control audits regarding the implementation of the fiscal, financial sector and structural reform conditions attached to this assistance. After the first instalment, each further instalment was dependent on Latvia’s progress of the implementations of the conditions set by the EU in the Memorandum of Understanding.142 The executive board of the IMF decided on 23 December 2008 that the IMF would provide Latvia with 1.68 billion euros under an IMF Stand-by arrangement, to support the country’s programme to restore confidence and stabilise the economy. An immediate amount of 591.5 million euros became available for Latvia after the agreement, the further nine instalments were available after quarterly reviews.143 The arrangement was approved under the

2011, p. 112. 139 A. Åslund and V. Dombrovskis, How Latvia Came Through the Financial Crisis, Washington, DC: Peterson Institute for International Economics 2011, p. 40. 140 European Commission, ‘EU provides 3.1. billion Community financial assistance to Latvia’, retrieved from: http://ec.europa.eu/economy_finance/articles/financial_operations/article13872_en.htm, consulted on 10 April 2012. 141 European Council, ‘Presidency Conclusions Lisbon European Council 23 and 24 March 2000’, retrieved from: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/00100-r1.en0.htm, consulted on 8 April 2012. 142 European Community and the Republic of Latvia, ‘Memorandum of Understanding between The European Community and the Republic of Latvia’, 26 January 2009, pp. 7-8. 143 International Monetary Fund, ‘Press release: IMF Executive Board Approves 1.68 Billion (US$2.35 Billion) LATVIA AND THE EUROPEAN UNION 253

IMF’s fast-track Emergency Financing Mechanism procedures, which entails exceptional access to IMF resources.144 Like the EU, the IMF set conditions for this financial assistance. The main goals of the IMF’s assistance were to maintain Latvia’s exchange rate peg, immediate measures to stem the loss of bank reserves and international reserves, restore confidence in the banking system, and to ensure financial consolidation.145 The remaining amount of the financial assistance package was provided to Latvia by the Nordic countries (Sweden, Denmark, Finland, Norway) and Estonia, who provided a total amount of 1.9 billion euros. The World Bank accounted for 0.4 billion euros, the European Bank for Reconstruction and Development, the Czech Republic and Poland accounted for another 0.4 billion euros.146 In the years after the signing of the multilateral financial assistance agreement, 4.5 billion euros of the 7.5 billion euros was actually paid out. The EU contributed with a total amount of 2.9 billion euros, the IMF contributed 1.1 billion euros, the World Bank contributed 400 million euros and the European Bank for Reconstruction and Development contributed 80 million euros. The decision of the ECOFIN of 20 January 2009 expired on 19 January 2012. Un- til Latvia has repaid 75 % of the funds allocated by the EU, the Post Programme Surveillance will be carried out by the European Commission to ensure sound policies and repayment.147

7.4.4 Excessive deficit procedure In 2009, the Latvian general government budget showed a deficit of nine per cent of GDP, a percentage that exceeded the EU’s reference value of three per cent of GDP.148 As a result, Latvia was subject of an EU Council Recommendation concerning the existence of an excessive debt.149 According to the statistics of the European Central Bank that can be found in the Convergence Report of May 2010, Table 7.1 below shows that the general government debt (36.1 % of GDP) was below the estimated reference value of 60 %. Compared to the statistics of the previous year, the budget balance worsened by 4.9 percentage points, whilst the government debt ratio increased by 16.6 percentage points. Over the period 2000 to 2009, the

Stand-by Arrangement for Latvia’, retrieved from: http://www.imf.org/external/np/sec/pr/2008/pr08345.htm, consulted on 10 April 2012. 144 International Monetary Fund, ‘IMF Crisis Lending’, retrieved from: http://www.imf.org/external/np/exr/facts/crislend.htm, consulted on 10 April 2012. 145 International Monetary Fund, ‘Press release: IMF Executive Board Approves 1.68 Billion (US$2.35 Billion) Stand-by Arrangement for Latvia’, retrieved from: http://www.imf.org/external/np/sec/pr/2008/pr08345.htm, consulted on 10 April 2012. 146 European Commission, ‘Balance-of-payment assistance to Latvia’, retrieved from: http://ec.europa.eu/economy_finance/eu_borrower/balance_of_payments/latvia/latvia_en.htm, consulted on 10 April 2012. 147 European Commission, ‘Latvia: an economic success story in the making’, retrieved from: http://ec.europa.eu/economy_finance/articles/financial_operations/2012-03-05_latvia_economic_en.htm, consulted on 10 April 2012. 148 European Central Bank, ‘Convergence Report’, May 2010, p. 113. 149 Council of the European Union, ‘Council recommendation to Latvia with a view to bringing an end to the situation of an excessive government deficit’, ECOFIN 490 UEM 203, Brussels, 6 July 2009. 254 ECONOMY

developments in Latvia’s budgetary position show a gradual decline (from 2.8 % of GDP to 0.3 % of GDP) in the deficit-to-GDP ratio until 2007.150 After 2007, the deficit-to-GDP ratio increased sharply from 0.3 % of GDP to 4.1 % of GDP in 2008. According to the 2009 Sustainability Report of the European Commission, it seemed that the sustainability of the government finances of Latvia were at high risk.151 As a result of the sharply increased deficit ratio, the ECOFIN Council decided on 7 July 2009 that an excessive deficit situation existed in Latvia and set the deadline for its correction at 2012.152 Because of the excessive deficit-to-GDP ratio of nine per cent, comprehensive fiscal consolidation was required in order to comply with the budgetary objectives set out in the Stability and Growth Pact of the EU.153

Table 7.1: The Latvian government’s fiscal position, 2008-2010. 154

7.4.5 Latvian fiscal consolidation The Latvian authorities entered into a stand-by agreement with the IMF in 2008 and also obtained medium-term financial assistance from the EU in 2009. The focus of the assistance from the IMF and the EU was to reduce the current government expenditure and to replace unrealistic budgetary plans.155 In order to comply with the comprehensive consolidation measures agreed in the context of the financial assistance programme led by the EU and the IMF, Latvia faced a fiscal challenge. In order to reduce the fiscal imbalance, the Latvian government implemented significant consolidation measures.156 From 2009 to 2012, expenditure cuts were implemented in several areas. In the public administration sector the number of employees and the wages were reduced, and a number of institutions were abolished or merged in order to reorganise this sector. 157 These reforms

150 European Central Bank, ‘Convergence Report’, May 2010, pp. 113-114. 151 Ibid., p. 115. 152 Ibid., pp. 111-119. 153 Ibid., pp. 111-119. 154 Ibid., p. 124. 155 Latvian Institute Factsheet No 112, ‘Parliament passes Latvia’s 2010 budget’, retrieved form: http://www.li.lv/images_new/files/2009_12_02_%20No112-state%20budget%202010.pdf, consulted on 12 February 2012. 156 Ibid. 157 Ministry of Finance of the Republic of Latvia, ‘Investor presentation’, April 2012, p. 17. LATVIA AND THE EUROPEAN UNION 255 were in line with the requirements of the excessive deficit procedure of the EU. Also, expenditure cuts were made in the defence sector and implementation of investment projects were carefully revised. Social welfare, health care and education were streamlined as well. The Latvian government reduced the level of social benefits, while expanding the social safety net.158 The preservation of a social safety net was in line with the objectives of the IMF. The IMF stressed the need to protect social spending, even with severe budget cuts in other areas.159 However, social safety in Latvia is quite marginal compared to Nordic European countries. This marginal social safety net can be seen as a combined result of a lack of government capital, and an anti-communism mentality which has led to a more right-wing oriented government.160 In order to increase revenues, various taxes were raised between 2009 and 2012. The Value Added Tax (VAT) was raised from 18 % in 2009 to 22 % in 2011, income tax was raised from 23 % to 26 % and new taxes were introduced, such as a progressive tax on real estate and a gambling tax.161 However, the Latvian government is aiming for a reduction of taxes on a short term, in order to keep competiveness and to reduce the size of the grey economy.162 The cuts in expenditures and the raising of the taxes have led to a radical change in Lat- vian government finances. The cuts in expenditure have had the desired effect, and have ena- bled the reduction of fiscal imbalances. Latvia complied with the fiscal targets that were set by the IMF and the EU, and the excessive deficit procedure ended at the end of 2011.163 The general government debt was 43 % of GDP at the end of 2011 – which is below the Maas- tricht threshold of 60 % of GDP – and the Latvian budget deficit is estimated below 3 % in 2012 and beyond.164 The international financial aid package was ended at the end of 2011 as well. Latvia used a total amount of 4.5 billion euros of the funds available. The majority of these funds received were used to finance the deficit and government loans (48 % of the total aid package) and debt repayment (36 % of the total aid package).165 In its Convergence Report of May 2010, the ECB stressed the importance of a further strengthened Latvian fiscal framework in order to improve fiscal governance and strict expenditure rules. This should contribute to avoiding Latvian pro-cyclical fiscal policies in the future. Also, the ECB stressed the importance of further unit labour cost restraint. This is needed to foster the improvements of Latvia’s competiveness and the competiveness of the

158 Ibid., p. 17. 159 IMF, ‘Latvia emerges stronger as international support winds down’, retrieved from: http://www.imf.org/external/pubs/ft/survey/so/2012/int020712a.htm, consulted on 18 March 2012. 160 Interview R19. 161 Ministry of Finance of the Republic of Latvia, ‘Investor presentation’, April 2012, p. 17. 162 Interview R19. 163 Ministry of Finance of the Republic of Latvia, ‘Investor presentation’, April 2012, p. 21. 164 Ibid., pp. 21, 27. 165 Ministry of Finance of the Republic of Latvia, ‘Investor presentation’, April 2012, p. 21. 256 ECONOMY

tradable sector in particular.166 Special attention is needed to reduce the incidence of structural unemployment. In addition, an increase in the participation rate is important in order to support growth in the future. Also, by making further progress in the restructuring of the state-owned banks, confidence in the Latvian economy can be restored.167 Finally, the European Commission and the EU’s Economic Policy Committee forecast a noticeable ageing of the Latvian population. There- fore, it is likely that the Latvian government will experience an increase in age-related public expenditure amounting to 1.3 % of GDP in the years to 2060, which should be taken into account.168 The EU recently stated that it regarded the EU balance-of-payments assistance as successful. Nevertheless, challenges remain. At a joint seminar on 1 March 2012 in Brussels, organised by the Bank of Latvia and Directorate General for Economic and Financial Affairs, Marco Buti, Director-General for Economic and Financial Affairs at the European Commis- sion, said: ‘As a result of hard work Latvia brought its budget deficit under control and the economy on a growth path again, and this has been rewarded by its successful return to the financial markets. Further reforms need to be carried out to secure this progress and deal with remaining challenges, but what we have seen so far is certainly a very good start.’169

7.5 Monetary policy

7.5.1 Bank of Latvia Monetary policy in Latvia is administered by the central bank of the Republic of Latvia: the Bank of Latvia (Latvijas Banka), which is a member of the European System of Central Banks (ESCB). The Bank of Latvia’s independence from the government is established by law;170 members of the governing Council of the Bank of Latvia are appointed by the parliament for a term of six years and cannot be dismissed, except in cases of resignation, a criminal verdict or long-term illness.171 Nonetheless, mid-level and senior officials from the Bank of Latvia and the Ministry of Finance are in frequent contact to ensure the country’s fiscal and monetary policies are properly coordinated.172 The Bank of Latvia’s independence from the government can easily be observed: since 2004, it has had various rather public clashes with the Ministry of Finance about Latvia’s fis-

166 European Central Bank, ‘Convergence Report’, May 2010, pp. 111-119. 167 Ibid., pp. 111-119. 168 Ibid., pp. 111-119. 169 European Commission, ‘Latvia: an economic success story in the making’, retrieved from: http://ec.europa.eu/economy_finance/articles/financial_operations/2012-03-05_latvia_economic_en.htm, consulted on 10 April 2012. 170 Latvijas Banka, ‘Law “On the Bank of Latvia” – Unofficial translation’ (article 13), retrieved from: http://www.bank.lv/en/about-the-bank-of-latvia/law-on-the-bank-of-latvia, consulted on 18 March 2012. 171 Ibid. 172 Interview R08. LATVIA AND THE EUROPEAN UNION 257 cal policy.173 Notably, the Bank of Latvia was among the first to criticise expansionary fiscal policies during the 2004 – 2007 real estate boom. Since 2008, some politicians are firing back criticism, for example by claiming the Bank’s monetary policy is too strict.174 Clearly, the country’s fiscal and monetary authorities function highly independently.

7.5.2 Price stability As in most transition countries, Latvia’s post-independence monetary policy was founded on the goal of internal and external stability of its currency.175 That is: the Bank of Latvia should keep inflation low and the external value of the lats as stable as possible. This price stability obligation is legally founded in Latvia’s central bank law.176 However, due to several factors that will be explained below, the Bank of Latvia’s options to influence price levels are somewhat limited. Latvia is obligated to eventually enter the European Monetary Union (EMU) and participates in the European exchange rate mechanism (ERM-II) since 2005. The lats has been pegged against the euro at a rate of 0.702804 lats per euro ever since this exchange rate was first established. While ERM-II allows for a 15 % margin within which the exchange rate can fluctuate, the Bank of Latvia unilaterally sticks to a 1 % margin.177 This means the exchange rate against the euro is virtually fixed, which should promote trade with Eurozone countries. On the other hand, the participation in ERM-II does eliminate external currency operations as an instrument of monetary policy. Latvia’s ability to maintain stable prices is therefore largely dependent on the soundness of its public finances.178 Another possible instrument to maintain price stability is the interest rate set by the central bank. The Bank of Latvia raised the official interest rate from 5 % in 2006 to 7.5 % in 2007, and the interest rate has not been lowered since then.179 Finally, the Bank of Latvia’s day-to-day operations on the financial markets have some influence on the availability of credit in Latvia, which in turn impacts price levels.180 Nonetheless, inflation in Latvia has been high since its accession to the EU. With the exception of 2010 (when Latvia experienced deflation), the harmonised index of consumer prices (HICP) rose significantly. Compared to 2005, prices had risen by over 43 % in 2011,

173 Ibid. 174 Ibid. 175 G.Y. Ganev, K. Molnar, K. Rybinski & P. Wozniak, ‘Transmission Mechanism of Monetary Policy in Cen- tral and Eastern Europe’, CASE Reports No. 52, 2002, p. 11 176 Latvijas Banka, ‘Law “On the Bank of Latvia” – Unofficial translation’ (article 3), retrieved from: http://www.bank.lv/en/about-the-bank-of-latvia/law-on-the-bank-of-latvia, consulted on 18 March 2012. 177 European Central Bank, ‘Press release: Latvian lats included in the Exchange Rate Mechanism II (ERM II)’, retrieved from: http://www.ecb.int/press/pr/date/2005/html/pr050429.en.html, consulted 12 February 2012. 178 European Central Bank, ‘Convergence Report May 2010’, 2010, p. 46. 179 Eurostat, ‘Central bank interest rates - Quarterly data’, retrieved from: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=irt_cb_q&lang=en, consulted on 6 March 2012. 180 Interview R08. 258 ECONOMY

with a record yearly inflation rate of 15.3 % in 2008.181 In its 2011 convergence report, the ECB writes that although inflation is currently around the reference value, ‘considerable concerns’ remain about Latvia’s long-term ability to keep prices stable.182 According to the ECB, these concerns mainly stem from Latvia’s low income level and the exchange rate regime.

7.5.3 No external devaluation While there already was speculation in 2008 about a future devaluation of the lats in response to the financial crisis, rumours further increased after Atis Slakteris, then Minister of Finance, publicly speculated about the option of releasing the lats’ peg.183 While Slakteris was quickly rebuked by Prime Minister Godmanis and IMF officials,184 others were less fortunate when they expressed pessimistic views on Latvia’s financial situation. During the final quarter of 2008, police detained an economist and a musician for allegedly spreading false information about the country’s financial sector. Ultimately, charges were not pressed.185 Spreading false information about Latvia’s financial system has been a criminal offence since 2007, when legislators added a section entitled ‘Dissemination of Untrue Data or Infor- mation regarding the Condition of the Finance System of the Republic of Latvia’ to the Crim- inal Law (section 194).186 The offense is punishable by up to two years of imprisonment. In 2011, Prime Minister Dombrovskis commented that ‘[t]hese actions stopped short of censorship but violated normal democratic standards.’187 Others have commented that, while this law is in itself needed, the police may have enforced it overzealously in the cases mentioned above.188 Most mortgages in Latvia are denominated in euros or dollars,189 but regulation to control the risks of this mechanism is loose compared to other countries: Latvian mortgage lenders

181 Eurostat, ‘HICP (2005=100) - Annual data (average index and rate of change)’, retrieved from http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=prc_hicp_aind&lang=en, consulted on 6 March 2012. 182 European Central Bank, ‘Convergence Report May 2010’, 2010, p. 45. Available at http://www.ecb.int/pub/pdf/conrep/cr201005en.pdf 183 A. Åslund & V. Dombrovskis, How Latvia Came Through the Financial Crisis, Washington, DC: Peterson Institute for International Economics 2011, p. 40; Thomson Financial News, ‘Latvia needs 'sizable' aid, to keep peg –IMF’, retrieved from: http://www.fxstreet.com/news/forex-news/article.aspx?storyid=f59fe676-5362-4564- ba14-c16023d736aa, consulted on 18 March 2012. 184 International Monetary Fund, ‘IMF Statement on Latvia (Press Release No. 08/310)’, retrieved from: http://www.imf.org/external/np/sec/pr/2008/pr08310.htm, consulted on 18 March 2012. 185 A. Åslund & V. Dombrovskis, How Latvia Came Through the Financial Crisis, Washington, DC: Peterson Institute for International Economics 2011, p. 39; The Wall Street Journal, ‘How to Combat a Banking Crisis: First, Round Up the Pessimists. Latvian Agents Detain a Gloomy Economist; 'It Is a Form of Deterrence'’, retrieved from: http://online.wsj.com/article/SB122809308553167889.html, consulted on 18 March 2012. 186 Valsts Valodas Centrs, ‘The Criminal Law (with amendments to 02.12.2010)’, retrieved from: http://www.vvc.gov.lv/export/sites/default/docs/LRTA/Likumi/The_Criminal_Law.doc, consulted on 18 March 2012; R. Rudusa & A. Pelane, ‘The forbidden "d"-word’, retrieved from: http://www.opendemocracy.net/article/email/the-forbidden-d-word, consulted on 18 March 2012. 187 A. Åslund & V. Dombrovskis, How Latvia Came Through the Financial Crisis, Washington, DC: Peterson Institute for International Economics 2011, p. 39. 188 Interview R08. 189 F. Roy, ‘Mortgage Markets in Central and Eastern Europe – A Review of Past Experiences and Future Per- spectives’, International Journal of Housing Policy 8 (2), 2008, p. 148. LATVIA AND THE EUROPEAN UNION 259 only have to inform consumers about these risks.190 Because of the large difference in interest between lats- and euro-denominated mortgages up to 2005 (mortgages in lats had between 2 and 2.5 percentage points higher interest rates), many Latvians have a euro-denominated mortgage.191 This might explain why the Latvian authorities are so keen to prevent any rumours about a devaluation of the lats: the converse rise in the euro’s exchange rate would instantly increase the mortgage burden of many Latvian households.

7.5.4 Internal devaluation While some deemed the lats’ peg to the euro unsustainable after the economic downturn started in 2008,192 the Latvian government chose to maintain the exchange rate policy outlined above. To improve the country’s international competitiveness, Latvia had to work towards internal devaluation instead. This meant that wage costs for employers had to be cut, either through nominal wage cuts or through lowering real wages by not (fully) compensating for inflation. The Latvian government chose the first option, cutting most public sector wages by 20 % in 2009.193 However, due to a previous wage cut that was part of an earlier austerity package, some public employees’ salaries dropped by 50 % over the course of six months.194 Mid- and high-level staff were notably exempted from these wage cuts.195 A more detailed examination of the government’s fiscal consolidation measures can be found in section 7.4.5. Private sector employees also faced steep pay cuts: in May of 2009, 73 % of all workers had had their wages cut by some amount, and 19 % of workers reported their salaries had at least been halved.196 Latvian workers’ purchasing power was reduced further by inflation, which in 2009 was the fifth highest of all EU countries.197 There is broad consensus among Latvia’s political elite that the internal devaluation strategy was the only meaningful course of action.198 Some of the arguments expressed by officials are as follows: the inflationary pressure that would have resulted from external devaluation would have had a devastating effect on consumers’ purchasing power and industries rely-

190 H.J. Dübel & S. Walley, ‘Regulation of Foreign Currency Mortgage Loans: The Case of Transition Countries in Central and Eastern Europe’, 2010, p. viii. 191 Ibid., p. 17. 192 E. Levy Yeyati, ‘Is Latvia the new Argentina?’, retrieved from: http://www.voxeu.org/index.php?q=node/3683, consulted on 5 March 2012. 193 Reuters, ‘Latvian minister quits over cuts, govt eyes loans’, retrieved from: http://www.reuters.com/article/2009/06/17/latvia-economy-idUSLH62947020090617, consulted on 6 March 2012. 194 Ibid. 195 The New York Times, ‘Latvia Races to Cut Deficit to Keep to Its Bailout Deal’, retrieved from: http://www.nytimes.com/2009/05/24/world/europe/24latvia.html, consulted on 6 March 2012. 196 The Baltic Times, ‘Three-quarters suffer wage cuts in Latvia’, retrieved from: http://www.baltictimes.com/news/articles/22859, consulted on 6 March 2012. 197 Eurostat, ‘HICP (2005=100) - Annual data (average index and rate of change)’, retrieved from: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=prc_hicp_aind&lang=en, consulted on 6 March 2012. 198 Interview R08; interview R19. 260 ECONOMY

ing on imported materials; this strategy allowed for structural reforms to be implemented, paving the way for sustained future growth; and a sense of responsibility towards Estonia and Lithuania, which would have been severely hit by exchange rate pressures.199 Evaluations of the internal devaluation strategy from outside Latvia are varied. On the one hand, both GDP growth and exports recovered in 2010, and Latvia received praise from the German Finance Minister, Standard and Poor’s and the IMF, among others, for sticking to internal devaluation.200 On the other hand, critics point to the cancellation of further austerity measures and to Latvia’s expansionary monetary policy for explaining the economic rebound.201 In their view, devaluing the lats would have ensured a speedier recovery with far less dramatic social consequences.

7.5.5 Eurozone accession Latvia aims to introduce the euro in 2014.202 This timetable has not changed in the aftermath of the economic crisis; in fact, the Letter of Intent that sets out the IMF bailout explicitly states that Latvia’s ‘ultimate economic policy goal’ is ‘entry to the euro-area as soon as possible.’203 Both the public debt ratio and the interest rate on long-term government loans are currently below the norms established in the Maastricht Treaty.204 Full macro-economic convergence is the only remaining obstacle before Latvia can join the euro area; legally and institu- tionally, the Bank of Latvia has complied with all relevant requirements since its accession to the ESCB.205 As mentioned above, Latvia has participated in ERM-II since May 2005. The originally planned introduction of the euro in 2008 fell through because inflation was too high. It has been suggested that the government’s own fiscal policies actually contributed to Latvia’s failure to meet all criteria by 2008, because their pro-cyclical nature pushed up inflation.206 In response to the crisis, several economists suggested that Latvia enter the Euro- zone immediately, so as to ease the process of internal devaluation.207 However, regarding the legal framework for monetary union, this is a strictly theoretical possibility: any country

199 Interview R08; interview R19. 200 The Economist, ‘Baltic thaw, Aegean freeze’, retrieved from: http://www.economist.com/node/15581056, consulted on 6 March 2012; C. Purfield & C.B. Rosenberg, ‘Adjustment under a currency peg: Estonia, Latvia and Lithuania during the global financial crisis 2008-09’ (IMF Working Paper 10/213), 2010. 201 M. Weisbrot & R. Ray, ‘Latvia’s Internal Devaluation: A Success Story?’, 2011, available at http://www.cepr.net/documents/publications/latvia-2011-12.pdf 202 Latvijas Banka, ‘Latvia plans to be ready to introduce the euro in 2014’, retrieved from: http://www.bank.lv/en/for-media/euro-changeover/latvia-plans-to-be-ready-to-introduce-the-euro-in-2014, consulted on 12 February 2012. 203 Ministry of Finance of the Republic of Latvia, ‘Letter of Intent’, retrieved from: http://www.fm.gov.lv/preses_relizes/dok/Letter_of_Intent_2008-12-18.pdf, consulted on 18 March 2012. 204 Latvijas Banka, ‘Compliance with the Maastricht Criteria’, retrieved from: http://www.bank.lv/en/eu-and- euro/compliance-with-the-maastricht-criteria, consulted on 18 March 2012. 205 Latvijas Banka, ‘The Bank of Latvia's Readiness for a Full-Fledged Membership of the EMU’, retrieved from: http://www.bank.lv/en/eu-and-euro/the-bank-of-latvia-s-readiness-for-a-full-fledged-membership-of-the- emu, consulted on 18 March 2012. 206 Z. Darvas, ‘The Baltic challenge and euro area entry’ (Bruegel Policy Contribution 2009/13), 2009, p. 5. 207 Ibid., p. 15. LATVIA AND THE EUROPEAN UNION 261 adopting the euro must comply with the Maastricht criteria. The current priorities to be able to meet the 2014 deadline are the fiscal deficit and, again, inflation.208 Latvia is projected to have a government deficit of 2.1 % over the 2012 budget; the inflation is projected to fall within the Maastricht criteria by March 2013.209 For a full overview of Latvia’s compliance with the Maastricht criteria, please refer to Table 7.2.

Criterion Value (all) Value (Latvia) Complies? Inflation: maximum of 1.5 percentage points 3.1 % 4.0 % No above the best 3 Member States’ average (April 2012) Government deficit: below 3 % of GDP 3 % 3.5 % (2011) No Government debt: below 60 % of GDP 60 % 43.1 % (2011) Yes Public debt long-term interest rate: maximum 7.6 % 5.8 % Yes of 2 percentage points above the 3 best Mem- (March 2012) ber States’ average Exchange rate stability: maximum variation of n/a 1 % Yes +/- 15 %

Table 7.2: Description of the Maastricht criteria for Eurozone accession and Latvia’s relative performance.210

7.6 Labour market

7.6.1 Unemployment Upon independence, there was virtually no official unemployment in Latvia.211 As in all Eu- ropean countries transitioning from a communist state-led system to a free market economy, large portions of the labour force were reallocated between sectors of the economy and unemployment rose, peaking at 20.7 % in 1996.212 After that, sustained economic growth lowered unemployment to 10.6 % in 2003, right before Latvia’s EU accession.213 While the Latvian unemployment rate got as low as 5.5 % in 2007, at the peak of the real estate boom, unemployment soared in the aftermath of the housing collapse and the global financial and economic crisis. Peaking at 20.1 % in the final months of 2009, the unemploy-

208 Latvijas Banka, ‘Latvia's Integration in the European Union and Introduction of the Euro’, retrieved from: http://www.bank.lv/en/eu-and-euro/eu-and-euro, consulted on 18 March 2012; interview R19. 209 Republic of Latvia, ‘Investor presentation (April 2012)’, pp. 12, 16. 210 Latvijas Banka, ‘Compliance with the Maastricht Criteria’, retrieved from: http://www.bank.lv/en/eu-and- euro/compliance-with-the-maastricht-criteria, consulted on 6 June 2012. 211 M. Hazans, ‘Unemployment and the Earnings Structure in Latvia’, World Bank Policy Research Working Paper 3504, 2005, p. 3. 212 Latvijas Statistika, ‘Activity rate, employment rate and unemployment rate (%)’, retrieved from http://data.csb.gov.lv/Dialog/varval.asp?ma=NB0020a&ti=NB02.+ACTIVITY+RATE%2C+EMPLOYMENT+ RATE+AND+UNEMPLOYMENT+RATE+(%25)&path=../DATABASEEN/Iedzsoc/Annual%20statistical%20 data/05.%20Employment%20and%20unemployment/&lang=1, consulted 16 March 2012. 213 Ibid. 262 ECONOMY

ment rate dropped below 15 % in the summer of 2011.214 However, the unofficial unemployment rate, i.e. including those who would like to work more hours per week and those who have given up looking for a job altogether, was estimated by one report to still be significantly higher: 21.1 % in the third quarter of 2011.215 Paradoxically, expert groups such as the OECD and the ILO predict that the Latvian labour market will severely tighten in the coming decades.216 Both the migration rate and the natural rate of population growth have been negative for the last two decades. Furthermore, the emigration of workers, particularly of skilled labourers, has accelerated since Latvia joined the EU. This means the people fit to work will form an increasingly smaller portion of the population, which (unless productivity growth is even higher than the population decrease) might cause major problems in both the labour market and the economy as a whole.217 Latvia has a track record of relatively high youth unemployment. After a decade of independence, 21.2 % of youths were unemployed, which is one of the highest rates among transition countries.218 However, this trend turned around after the year 2000, possibly due to consistent real wage increases and more affordable student loans.219 Youth unemployment then soared in the aftermath of the 2007-2008 financial meltdown, almost tripling from 8.1 % in September 2008 to 22.3 % in March 2010, and even briefly peaking at 44.9 %.220 Since the room for active labour market policies by the government is constricted by fiscal austerity, youth unemployment will need to be addressed to a significant extent through EU programmes.221 These are described in section 7.10.1.

7.6.2 Wages and income distribution At 285 euros per month, Latvia has the fourth-lowest monthly minimum wage of all EU member states.222 The average secondary income in Latvia was 5 517 euros per year in 2010, which is less than a third of the EU average.223 While this amounts to 7 255 euros at purchas-

214 Eurostat, ‘Latvia - Standardised unemployment, Rate, Total (all ages), Total (male & female); unspecified; Eurostat; Seasonally adjusted, not working day adjusted, percentage of civilian workforce(Short-Term Statis- tics)’, retrieved from http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=132.STS.M.lv.S.UNEH.RTT000.4.000, consulted 12 February 2012. 215 M. Weisbrot, R. Ray, ‘Latvia’s Internal Devaluation: A Success Story?’, 2011, p. 8. 216 M. Hazans, ‘Unemployment and the Earnings Structure in Latvia’, World Bank Policy Research Working Paper 3504, 2005, pp. 4-7. 217 Ibid., pp. 4-7. 218 A. Nesporova, ‘Unemployment in the transition economies’, Unece Paper, 2002, p. 26. 219 M. Hazans, ‘Unemployment and the Earnings Structure in Latvia’, World Bank Policy Research Working Paper 3504, 2005, p. 10. 220 M. Tanveer Choudhry, E. Marelli & M. Signorelli, ‘Youth Unemployment and the Impact of Financial Cri- ses’, Quaderni del Dipartimento di Economia, Finanza e Statistica 79/210, 2010, p. 11. 221 C. Purfield & C.B. Rosenberg, ‘Adjustment under a Currency Peg: Estonia, Latvia and Lithuania during the Global Financial Crisis 2008-09’, IMF Working Paper 10/213, 2010, p. 26. 222 Eurostat, ‘Monthly minimum wages - bi-annual data’, retrieved from http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=earn_mw_cur&lang=en, consulted 7 April 2012. 223 Eurostat, ‘Mean and median income by age and gender’, retrieved from http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_di03&lang=en, consulted 17 March 2012. LATVIA AND THE EUROPEAN UNION 263 ing power parity (PPP), this is the lowest average income in the EU after Romania and Bul- garia. This position is retained when looking at the median secondary income: at PPP, the Latvian median income is the third-lowest in the EU, at 5 966 euros per year in 2010.224 Latvia is not only among the poorest Member States in terms of average income: a quarter of the population (25.6 %) is deemed to be at risk of poverty.225 Almost half of all Latvians (45 %) suffer from material deprivation to some degree,226 and 21.3 % of Latvians live below the poverty line, which is the highest rate in the EU.227 Latvia has held this position for three consecutive years. Income inequality in Latvia is significantly higher than the EU average.228 The EU as a whole had a Gini coefficient of .305 in 2010. In contrast, since becoming an EU member, Latvia’s Gini coefficient has been more or less stable around .36, peaking at .392 in 2006 at the height of the construction boom. In 2011, the Gini coefficient dropped to .352, but this still makes Latvia the EU member with the highest income inequality.229 This is reflected in the fact that Latvia has a relatively small middle-class.230

7.6.3 Labour market divisions Geographically, the labour market is clearly divided between rural and urban areas, and between Riga and other cities.231 People in Riga earn the most money on average: up to 37 % more than people working in smaller towns. This difference between the capital and the rest of the country is much larger than in other European countries.232 The Latgale region in the southeast has the most urgent labour market problems: both short- and long-term unemployment are high, while the average wage is the lowest of the whole country.233 People working in Latgale’s biggest city, Daugavpils, on average earn around 11 % less than workers in smaller towns.234 In many cities in Latgale, the unemployment rate is 70 % or higher; in one case it even reaches 87 %.235 Latgale is chronically underdeveloped; more on this topic can be found in section 7.10.8.

224 Ibid. 225 A.B. Atkinson & E. Marlier (Eds.), Income and living conditions in Europe, Luxembourg: Publications Of- fice of the European Union 2010, p. 107. 226 Ibid., p. 138. 227 Eurostat, ‘At-risk-of-poverty rate by poverty threshold, age and gender’, retrieved from http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_li02&lang=en, consulted 17 March 2012. 228 Eurostat, ‘Gini coefficient’, retrieved from http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_di12&lang=en, consulted 17 March 2012. 229 A.B. Atkinson & E. Marlier (Eds.), Income and living conditions in Europe, Luxembourg: Publications Of- fice of the European Union 2010, pp. 109-112. 230 S. Zaidi, ‘Main Drivers of Income Inequality in Central European and Baltic Countries: Some Insights from Recent Household Survey Data’, World Bank Policy Research Paper 4815, 2009, p. 18. 231 M. Hazans, ‘Unemployment and the Earnings Structure in Latvia’, World Bank Policy Research Working Paper 3504, 2005, p. 17. 232 Ibid., p. 40. 233 Ibid., p. 18. 234 Ibid., p. 40. 235 Interview R14. 264 ECONOMY

While the percentage of active men in the labour force is higher than the percentage of active women, the so-called gender gap is significantly smaller in Latvia than in the EU as a whole: Latvian men are less active and Latvian women are more active than the European average.236 Statistics suggest that gender is of virtually no importance for the chances of finding a job in Latvia.237 Still, when the labour force is split according to gender, 14 % of women are unemployed, compared to 8 % of men.238 However, due to the crisis and especially its consequences for the construction sector, this distribution has temporarily been reversed, with unemployment among men being higher than among women.239 Furthermore, on average Latvian women only earn 64 % of what men earn for similar work.240 But among upper- middle-income countries, Latvia is regarded as one of the most egalitarian countries, as far as gender is concerned.241 It has been suggested that Latvia’s communist tradition, where men and women alike were supposed to make a contribution, has led to this degree of equality: Latvians generally do not have a sexist mentality.242 This point of view has also been disput- ed, however; please refer to section 5.11 for an alternative perspective. In the run-up to Latvia’s accession to the EU, labour dissimilarities between ethnic Latvi- ans and non-Latvians grew. Non-Latvians were more likely to be unemployed, faced a higher risk of losing their job and earned significantly less on average (13 % less in 2002).243 It should be noted, however, that this discrepancy cannot be explained by discrimination alone. Since ethnicity patterns vary geographically, part of the ‘ethnicity gap’ could be explained by the fact that members of ethnic minorities live in regions that are economically less strong and where dominant industrial sectors have lower wages.244 For example, many ethnic Russians live in the Latgale region, which (as noted above) has had consistent labour market problems. Furthermore, a lack of language skills might make it more difficult for non-Latvians to find jobs.245 The requirements for language skills were relaxed during the economic boom years (2005-2007) to ease shortages in the labour market, but the resulting drop in the level of Latvian spoken in the workplace led to complaints among the Latvian-speaking population. In response to these complaints, language requirements were applied to over 1 000 types of public and private sector jobs. While this is practically defensible in some cases, in other cases

236 M. Hazans, ‘Unemployment and the Earnings Structure in Latvia’, World Bank Policy Research Working Paper 3504, 2005, p. 10. 237 Ibid., p. 24. 238 R. Hausmann, L.D. Tyson & S. Zahidi (Eds.), The Global Gender Gap Report 2011, Geneva: World Eco- nomic Forum 2011, p. 227. 239 Interview R14. 240 R. Hausmann, L.D. Tyson & S. Zahidi (Eds.), The Global Gender Gap Report 2011, Geneva: World Eco- nomic Forum 2011, p. 226. 241 Ibid., p. 32. 242 Interview R14. 243 M. Hazans, ‘Unemployment and the Earnings Structure in Latvia’, World Bank Policy Research Working Paper 3504, 2005, p. 42. 244 M. Hazans, ‘Unemployment and the Earnings Structure in Latvia’, World Bank Policy Research Working Paper 3504, 2005, p. 39. 245 Interview R14. LATVIA AND THE EUROPEAN UNION 265 these new regulations simply amount to discrimination of the Russian-speaking population. Furthermore, raids by the Language Inspectorate make Russian-speaking Latvians feel discriminated against, even if they do comply with the rules.246 Another division in the labour market can be found when distinguishing between contracted workers and self-employed workers. The number of self-employed persons in Latvia is low compared to other European countries, with most people who are self-employed working in the agriculture sector.247 In spite of the economic crisis, the amount of self-employed Latvians has remained stable since 2005 at around 9 to 10 % of the workforce. The EU average over the same period was significantly higher at 15.3 %.248 Since Latvia consistently gets high scores in the World Bank’s ease of doing business ranking,249 an explanation for the low number of self-employed people might instead be found by looking at cultural factors. Gener- ally speaking, Latvians might have ‘a lack of entrepreneurial talent or lack of self- confidence’, making people less prone to become entrepreneurs.250 Furthermore, some data suggests that many Latvians with an entrepreneurial spirit, instead of starting a business in Latvia, choose to migrate to other countries. Once this segment of the population reaches the host country, the percentage of self-employed Latvians is actually increasing.251

7.6.4 Social partners and dialogue Trade unions Like the other Baltic states, Latvia has a rather weak trade union system.252 Interviews with actors throughout society have confirmed this assessment.253 Before the crisis, an estimated 16 % of Latvian workers were members of a trade union, most of them in the public or semi- public sector.254 In 2012, the membership rate among Latvian workers was estimated to have dropped to 12 %.255 Several factors contribute to the trade unions’ unpopularity among workers.256 Firstly, as a result of Latvia’s Soviet heritage, trade unions are still perceived to be a part of the old communist system (under Soviet rule, trade union membership was obligatory). In addition,

246 Ibid. 247 M. Hazans, ‘Unemployment and the Earnings Structure in Latvia’, World Bank Policy Research Working Paper 3504, 2005, p. 11. 248 Eurostat, ‘Percentage of self-employed by sex, age groups and household composition’, retrieved from: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=lfst_hhsety&lang=en, consulted on 16 March 2012. 249 World Bank, ‘Ease of Doing Business in Latvia’, retrieved from http://www.doingbusiness.org/data/exploreeconomies/latvia/, consulted on 15 May 2012. 250 Interview R14. 251 Ibid. 252 Charles Woolfson, ‘Labour Standards and Migration in the New Europe: Post-Communist Legacies and Per- spectives’, European Journal of Industrial Relations 13 (2), 2007, p. 205. 253 Interview R14; interview R19; interview R31. 254 Heribert Kohl, ‘Where do Trade Unions Stand in Eastern Europe today? Stock-taking after EU Enlargement’, InternationalePolitik und Gesellschaft 3, 2008, p. 110. 255 Interview R52. 256 Ibid. 266 ECONOMY

the low wage level in Latvia makes trade union membership rather costly for many workers. This problem is to some extent remedied through contributions from the European Social Fund.257 Finally, the trade unions’ low level of effectiveness in the national social dialogue might make workers reluctant to join.258 In turn, the unions’ relatively small member base leaves them with little bargaining power, especially against new foreign companies operating in Latvia.259 While the Latvian trade unions are organised in a single national confederation (Latvijas Br!vo arodbiedr!bu savien!ba, LBAS), this has not resulted in a strong position vis-à-vis employers or the government.260 It has been suggested that part of the trade union’s ineffectiveness stems from capacity problems and unrealistic demands.261 In short, there seems to be a downward spiral where ineffectiveness and a lack of membership reinforce each other. While 18 % of Latvian workers could in theory be covered by binding collective sectoral agreements, in practice these types of collective agreements are seldom made.262 Currently only four sectoral agreements are in effect, just one of which is generally binding (in the railway and transport sector).263Fearing rigidity, employers are generally reserved about agreeing to centralised wage bargaining. This might be explained by Latvia’s relatively unstable business climate since its independence.264 Due to strict legislation on industrial action, it is very hard for Latvian workers and trade unions to effectuate a strike.265 Among other demands, employers have to be notified 14 days in advance before a strike can legally take place, and a quorum of 75 % of the workers involved is also required. Like in other former communist countries, this has made industry- wide strikes very uncommon in Latvia.266 Right after acceding to the EU in 2004, Latvian workers found themselves at the fore- front of a legal battle with implications for the whole Union. A conflict broke out between a Latvian construction company (called Laval) and Swedish trade unions over Latvian workers refurbishing a school in Vaxholm, Sweden. The case was eventually referred to the European Court of Justice (ECJ), which ruled that the right to free movement of persons superseded the right to industrial action.267 The case highlighted a lack of coordination between Latvian and

257 Ibid. 258 Interview R14. 259 Heribert Kohl, ‘Where do Trade Unions Stand in Eastern Europe today? Stock-taking after EU Enlargement’, InternationalePolitik und Gesellschaft 3, 2008, p. 110. 260 Ibid., p. 110. 261 Interview R14; interview R31. 262 Heribert Kohl, ‘Where do Trade Unions Stand in Eastern Europe today? Stock-taking after EU Enlargement’, InternationalePolitik und Gesellschaft 3, 2008, p. 120. 263 Interview R52. 264 Interview R31. 265 Heribert Kohl, ‘Where do Trade Unions Stand in Eastern Europe today? Stock-taking after EU Enlargement’, InternationalePolitik und Gesellschaft 3, (2008), p. 122. 266 Ibid., p. 122. 267 ETUC, ‘Laval case (Vaxholm)’, retrieved from: http://www.etuc.org/r/847, consulted on 6 June 2012. LATVIA AND THE EUROPEAN UNION 267

Swedish trade unions, which has since been somewhat improved.268

Employers Latvian employers are organised and represented through the Latvian Confederation of Em- ployers (Latvijas Darba dev&ju konfeder#cija, LDDK). LDDK lobbies the government on behalf of employers, but also represents them in Latvia’s social dialogue.269 However, it should be noted that the majority of employers is not represented by LDDK: the organisation only represents 35 % of all Latvian employers.270 At the company level (and sometimes even at the sectoral level), this might leave trade unions without any actor with whom they can negotiate about wages and other labour issues.271 Notwithstanding LDDK’s somewhat limited representativeness, there seems to be a general consensus that Latvian employers are in a strong position compared to other actors in the social dialogue.272 This is partly due to LBAS’s weak position, which might in turnbe considered a problem for LDDK’s public perception: people might worry that employers’ grip on the socioeconomic dialogue is too firm.273 However, another important factor for employers’ strong position in Latvian society is their interconnectedness with the country’s politics. While two of Latvia’s three so-called ‘oligarch parties’ were voted out of the parliament in 2011 (see page 178), some still regard the ties between the business world and politics as problematic, which causes concerns about the expenditure process of public funds.274 Howev- er, it has also been argued that this interconnectedness is actually beneficial to the Latvian economy, for example by facilitating a strong and efficient response to the economic crisis.275

Tripartite dialogue Since 1993, social dialogue in Latvia has been institutionalised along a tripartite structure, i.e. involving the government, employees (represented by LBAS) and employers (represented by LDDK).276 The institution where this dialogue formally takes place is the National Tripartite Cooperation Council (Nacion#l# tr!spus&j# sadarb!bas padome, NTSP), as laid down in a series of socioeconomic laws.277 Next to executive meetings, the NTSP has several permanent working groups in place where representatives from all three sides discuss topics ranging from the minimum wage to tax policy.278

268 Interview R52. 269 LDDK, ‘About LDDK’, retrieved from: http://lddk.lv/index.php?lang=2, consulted on 6 June 2012. 270 Interview R31; interview R52. 271 Interview R14; interview R52. 272 Interview R14; interview R31; interview R52. 273 Interview R31. 274 Interview R14. 275 Interview R19; interview R31. 276 EIRO online, ‘Latvia: industrial relations profile’, retrieved from: http://www.eurofound.europa.eu/eiro/country/latvia_2.htm, consulted on 6 June 2012. 277 Ibid. 278 Interview R31; interview R52. 268 ECONOMY

Opinions on the effectiveness of social dialogue in Latvia are divided. While some view it as one of the key factors that contributed to wide acceptance of the government’s fiscal consolidation package, others feel that the NTSP is to a considerable degree dominated by employers.279 Several of the issues described above might contribute to this last perception: either LBAS’s structurally weak position, the strong links between the business community and Latvia’s political leadership, or a combination of both. While LBAS and LDDK may frequently clash on certain socioeconomic issues (pension reform currently being the major topic of debate), they also use the tripartite social dialogue for coordinated opposition to government policy. Some of the main common positions where employers and employees exhort the Latvian government to change its policies are the personal income tax rate (which both parties think is too high) and Latvia’s stance towards EU sanctions against Belarus (which they assert the government should veto in the Council).280

7.6.5 Labour safety Latvia has a weak reputation when it comes to labour safety: it consistently ranks among the EU Member States with the highest number of workplace fatalities.281 Furthermore, the number of injuries has increased as a result of the real estate boom.282 It has been suggested that the number of incidents in Latvia is so high partly because enforcement is weak and penalties for violations of safety regulations are low.283 Another major cause is the large grey economy, which makes both sufficient inspecting and reporting labour safety conditions difficult.284 In 2010, almost half of all Latvian workers (47.4 %) indicated that they thought their health or safety were at risk because of their job – the highest rate of all EU Member States.285 Especially employees without a permanent contract indicated their work negatively impacted their health: 57.4 % of those employees felt at risk, which is also the highest rate in the EU. In the same survey, when asked ‘Does your work affect your health, or not?’, 52.7 % of all Lat- vian workers responded ‘Yes, mainly negatively’ – again the highest rate of all EU Member States.286 Among employees without a permanent contract, almost 60 % of respondents said that their work affected their health negatively. These numbers are high among both high- and low-skilled manual labourers. A study conducted from 1995 to 2005 revealed severe incompliances with Latvian labour

279 Interview R14; interview R19; interview R31; interview R52. 280 Interview R19; interview R31; interview R52. 281 J. Sommers & C. Woolfson, ‘Trajectories of Entropy and “the Labour Question”: The Political Economy of Post-communist Migration in the New Europe’, Debatte: Journal of Contemporary Central and Eastern Europe 16 (1), 2008, p. 63. 282 Interview R64. 283 C. Woolfson, ‘Labour standards and migration in the New Europe: post-communist legacies and perspectives’, European Journal of Industrial Relations 13 (2), 2007, p. 203. 284 Interview R52; interview R64. 285 Eurofound, ‘Fifth European Working Conditions survey (q66)’, retrieved from: http://www.eurofound.europa.eu/surveys/smt/ewcs/ewcs2010_07_03.htm, consulted 10 April 2012. 286 Ibid. LATVIA AND THE EUROPEAN UNION 269 law.287 For example, 54 % of employers had never carried out (compulsory) occupational risk assessment, and 22 % had done so only partially.288 The number of fatalities remained more or less stable, but the number of accidents declined consistently, only to rebound in 2005.289 While the official number of workplace safety incidents is relatively low compared to other EU Member States, the authors of the study deem this ‘rather an indication of poor registration of workplace accidents.’290 The Latvian agency overseeing labour safety is the State Labour Inspectorate (SLI), as laid down in the new State Labour Inspectorate Law of 2008.291 As a result of the government’s fiscal consolidation, around a third of the SLI’s inspectors and supporting staff were fired in 2009.292 However, since the crisis also resulted in many construction sites closing down and workers becoming unemployed, the net effect of the crisis was record lows in both safety incidents and lethal accidents in Latvian workplaces in 2009.293 This downward trend stopped in 2011, when the number of incidents went up again, possibly due to the increase in overall economic activity.294 To improve the detection of unsafe labour conditions, the SLI works together with the Latvian trade union confederation (LBAS), for example by sharing information.295 Further- more, the SLI, LBAS and the employers’ confederation (LDDK) frequently organise joint programmes or campaigns to improve labour safety.296 These joint activities are usually funded for a significant part by the European Social Fund (ESF).

7.7 The Latvian welfare state

7.7.1 The origin of Latvian social policy From the independence in the 1990s, many internal and external factors have influenced the Latvian social policy.297 The main internal factors contributing to the establishment of the current social policy in Latvia are the following:

• A social support system had to be established from scratch, considering the Soviet system where social support was arranged in the workplace;

287 D. Sprûd3a, M. Eglîtee.a., ‘Evaluation of work conditions and occupational health risk factors in enterprises within a 10-year period in Latvia’, Proceedings of the Latvian Academy of Sciences, Section B, 64 (1/2), 2010. 288 Ibid., p. 12. 289 Ibid., p. 14. 290 Ibid., p. 17. 291 Translation and Terminology Centre, ‘State Labour Inspectorate Law’, retrieved from: http://www.vdi.gov.lv/files/state_labour_inspectorate_law.pdf, consulted 10 April 2012. 292 Interview R64. 293 LDDK e.a., ‘Darbaapst#k-i un riskiLatvij#, 2009 –2010’, p. 77. Available at: http://www.lm.gov.lv/upload/darba_tirgus/darba_aizsardziba/darbaapstaklilv2009-2010.pdf 294 Interview R64. 295 Interview R52; interview R64. 296 Interview R64. 297 F. Rajevska, ‘Social policy in Latvia, welfare state under double pressure’, Oslo: FAFO 2005, p. 36. 270 ECONOMY

• The new challenge of competing with other EU Member States after the accession in 2004, on the level of labour, salaries and wages; • Influence from the top, not from the bottom. The political elite had a lot of power in determining the social policy, because the employees had a weak organisational structure and could not make their voice heard; The political elite of Latvia has striven towards a liberal market economy. Today, this contributes to the establishment of liberal features in the welfare state; • The low birth rate and the high mortality rate which affect the social policy on the level of family and health policy; • The low GDP rate and impoverishment, which require the state to be actively involved in trying to solve this situation.

The key external factors influencing Latvian social policy since the 1990s were the negotiating processes of the EU, the IMF, NATO, ILO experts and the World Bank.298

7.7.2 Type of welfare state: the Baltic post-socialist welfare state According to Esping-Andersen there are three types of welfare states: the liberal, corporatist and the social-democratic model.299 He created these categories in 1990 to describe the welfare states of the capitalist western countries at that time. This system has been dominant in the debates around welfare states for two decades and has proven to be very useful in the understanding of welfare states throughout the world. Indicators that he uses for the classification are: the degree of de-commodification (the extent to which persons are socially protected); the degree of stratification (the extent to which society is layered through social benefits for particular social groups, maintaining class and status); and the role of the market, the state, and the family regarding social provisions.300 It is interesting to see if the models are applicable to the post-communist states of central and eastern Europe, which of these models is most suitable and why this model is most suitable for Latvia. According to some, the Latvian model is very similar to the model of the U.S. (the liberal model), because it is very much up to individuals to tend for themselves.301 But according to Aidukaite, the Baltic states have features of different types of welfare states. She believes that the country cannot be placed into one single model, since it has features of the liberal, as well as of the corporatist model.302

298 Ibid., p. 37. 299 G. Esping-Andersen, Three Worlds of Welfare Capitalism. In: Pierson, C. & Castles, F.G., The Welfare State Reader, Cambridge: Polity Press 2000, p. 164. 300 Ibid., p. 176. 301 Interview R19. 302 J. Aidukaite, The emergence of the post-socialist welfare state: the case of the Baltic states: Estonia, Latvia and Lithuania, Huddinge: Södertörns Högskola 2004, p. 42; F. Rajevska, ‘Social policy in Latvia, welfare state under double pressure’, Oslo: FAFO 2005, p. 37. LATVIA AND THE EUROPEAN UNION 271

The underlying factors determining this hybrid Baltic model, also called the ‘post- socialist’ welfare state, are the legacy of the Soviet rule and the transformation towards a liberal market economy of the Baltic states.303 In Soviet times, social insurance was arranged through employment. The Baltic states were very adherent to liberal market values when they declared their independence in the early 1990s. In the mixed model, the ‘liberal’ element means that the Baltic states have ‘universalist’ features and a low level of de-commodification, meaning that there is social protection for everyone, but at a very low level.304 In general, social protection is low for labourers in the Baltic states. This has led to an increase in income inequalities and high poverty rates.305 The ‘corporatist’ element of the Baltic welfare state is that quite some social security exists for citizens (more than in the liberal model) and that there is much stratification.306 This means that some people are privileged in society through social benefits. In the Baltic states these are families, which receive relatively large payments compared to other social groups.307 Possible explanations for these family benefits can be that Latvian policy-makers want to increase the birth rate and create equal opportunities for children from all families.308 Another reason comes from politicians desiring to get re-elected.309 However, it can be argued that in Latvia family benefits are not that influential. The opinion of Latvian people is that the social benefits for families and children in Latvia only marginally affect the lives of families and thereby they experience, compared to Lithuanians and Estonians, a lower level of success as a result of these family-benefits.310

7.7.3 Health care system, social security and public services All people in Latvia, citizens and non-citizens, have access to all social rights, including health care.311 Health care in Latvia is partly financed by taxes.312 The total amount of money spent on health care, as a share of GDP, is small in Latvia compared to other EU Member States.313 The Latvian health care system can be compared to that of the United States, Japan

303 Ibid., p. 42. 304 G. Esping-Andersen, Three Worlds of Welfare Capitalism., In: Pierson, C. & Castles, F.G., The Welfare State Reader, Cambridge: Polity Press 2006, p. 176. 305 J. Aidukaite, The emergence of the post-socialist welfare state: the case of the Baltic states: Estonia, Latvia and Lithuania, Huddinge: Södertörns Högskola 2004, p. 42. 306 G. Esping-Andersen, Three Worlds of Welfare Capitalism., In: Pierson, C. & Castles, F.G., The Welfare State Reader, Cambridge: Polity Press 2006, p. 176. 307 J. Aidukaite, The emergence of the post-socialist welfare state: the case of the Baltic states: Estonia, Latvia and Lithuania, Huddinge: Södertörns Högskola 2004, p. 45. 308 Ibid., p. 45. 309 Interview R08. 310 J. Aidukaite, The emergence of the post-socialist welfare state: the case of the Baltic states: Estonia, Latvia and Lithuania, Huddinge: Södertörns Högskola 2004, p. 9. 311 Interview R68; J. Aidukaite, The emergence of the post-socialist welfare state: the case of the Baltic states: Estonia, Latvia and Lithuania, Huddinge: Södertörns Högskola 2004, p. 27. 312 Interview R15. 313 Interview R68. 272 ECONOMY

and Great Britain in terms of a small social security net.314 There are some problems which continue to affect the Latvian health care system. The most important problems are the following:

4 The needs are bigger than the budget, so additional payments have to been done by patients to receive the health care they need;315 4 Although health care is universal in Latvia, the accessibility from services is far from sufficient.316 It is more difficult for low-income individuals to receive all the health care and medicines they need.317 The reason for this is that people wait with calling the doctor or the ambulance, because they might not be able to afford the costs.318 Another problem is the proximity of health care. In rural areas ambulances need an average of 25 minutes to reach patients, while in urban areas it takes only 13 minutes;319 4 Health care is mainly financed through taxation at the state-level.320 Thereby, there is a lack of sufficient state funding for the health care system;321 4 There are not enough specialists in the in the rural areas of Latvia to do complicated operations.322

There are a few ways to qualify for social security benefits in Latvia.323 The main benefits are related to family, sickness, poverty, old-age, death, working disability, maternity, paternity, labour accidents, work-related diseases and unemployment. Furthermore, inhabitants of Lat- via have certain rights regarding the provision of public services, such as education and health care.

7.7.4 Aging population Latvia’s population is aging because of a low birth rate, a declining population and a large group of the working population which is about to retire (see also section 2.3). The labourers need to contribute to the pension of a large group: one labourer needs to provide for the pen-

314 Interview R15. 315 Ibid. 316 Interview R68. 317 E. Tragakes E, G. Brigis, J. Karaskevica, A. Rurane, A. Stuburs , E. Zusmane , O. Avdeeva and M. Schäfer, ‘Latvia: Health system review’, Health Systems in Transition, no. 2 (2008), p. 232. 318 Interview R68. 319 Interview R48. 320 E. Tragakes E, G. Brigis, J. Karaskevica, A. Rurane, A. Stuburs , E. Zusmane , O. Avdeeva and M. Schäfer, ‘Latvia: Health system review’, Health Systems in Transition, no. 2 (2008), p. 79. 321 R. Muci(% (Ministry of Health), ‘Challenges and strategic plans for development of the Latvian health care system’, retrieved from http://www.sykehusplan.no/data/081119_mucins_chalanges_and_strategic_plans_for_developments_in_lv.pdf , consulted on 17 March 2012. 322 Interview R48. 323 E. Tragakes E, G. Brigis, J. Karaskevica, A. Rurane, A. Stuburs , E. Zusmane , O. Avdeeva and M. Schäfer, ‘Latvia: Health system review’, Health Systems in Transition, no. 2 (2008), p. 79. LATVIA AND THE EUROPEAN UNION 273 sion of four pensioners.324 Therefore, the IMF suggested that the pension age should be increased from 62 to 65.325 The government already agreed on this matter, but the proposal is still under consideration by the parliament. The Employers’ Confederation of Latvia (LDDK) agreed to this, but the trade unions disagreed. Another point of discussion is the pre-pensioners clause, according to which employees can retire at the age of 62 in case of health problems or if they have a particular profession. However, this pension is lower than normal. This law was already in force before the crisis, but will expire in 2013. The LDDK argues for the continuation of this clause.

7.7.5 Crisis

During the crisis of 2008-2009 some changes were made to the welfare system.326 At first, politicians tried to cut pensions to 70 % for the working people and to 10 % for the unemployed.327 This proposal was adopted in June 2009. However, the Constitutional Court soon came to forbid this legislation, because it violated legal certainty and legitimate expectations of people.328 Due to this verdict, the Latvian government was obliged to pay back the pensions they had already started to withhold from paying. Since 2009, the pensions have not been subject to inflation corrections; they are only subject to small changes.329 However, the government has cut the budget for health care in the last few years.330 The government announced that 2012 would be the last year of cutting finances in the health sector and that after that the budget will remain the same or even increase.331 The Gini coefficient, a number which shows the extent to which incomes are divided equally under the citizens of a state, has improved (in a sense of becoming more equal) somewhat during the crisis.332 (More on income inequality in Latvia on page 262.) The set-up of the family benefits also changed during the crisis. The amount used to be linked to the wages of the parents, resulting in lower benefits for poorer families and higher benefits for richer families. During the crisis, a ceiling was introduced on the family benefits, thereby creating more equal benefits for all families.333 The reason behind this government decision was that it would generate popular support necessary for the upcoming elections.334

324 Interview R31. 325 Ibid. 326 Interview R08. 327 Interview R17. 328 Ibid. 329 Ibid. 330 Interview R15. 331 Ibid. 332 Interview R08. 333 Ibid. 334 Ibid. 274 ECONOMY

7.8 Energy

7.8.1 Organisation of the Latvian energy market Since Latvia’s independence in 1991, the Ministry of Economics has been the main institution that develops the overall energy policy. Policies on renewable energy are developed by the Ministry of Environment (in the Climate and Renewable Energy Department), but the decisive power remains with the Ministry of Economics.335 The Latvian Investment and Devel- opment Agency (LIAA) has a minor influence at the political level, while the Public Utilities Commission is in charge of setting network tariffs and default supply tariffs.336 In the former Soviet Union, the energy supply was regionally planned in the form of a Baltic grid for the Baltic states. This regional planning explains the current interconnectivity between Estonia, Lithuania and Latvia.337 The regional planning of the Soviet Union also explains the differences in energy sources during the Soviet period. Estonia mainly used oil shale, while Lithuania mainly made use of nuclear energy – until the closure of the power plant Ignalina338 – and Latvia was specialised in the use of hydro plants.339 After regaining independence, the Latvian government stressed the need for a sustainable energy policy. The accession to the European Union also contributed to further efforts for prioritising the Latvian energy sector.340 In 2006, the Latvian government adopted the Euro- pean Guidelines for Development of the Energy Sector for 2007-2016. The main targets of these guidelines for Latvia are ‘the increase of Latvia’s independence in energy supply and the diversification of the availability of primary energy resources’.341 In these guidelines the European Commission also approved the monopoly of the Latvian gas company Latvijas Gaze until 2010, even though this is contrary to the requirements of the Second Gas Di- rective.342 In the last decade, Latvia has been restructuring its industry, which has contributed to the recent decline in Latvia’s energy consumption. Also, the agricultural market and households are switching from district heating to private heating. This has led to a decline in Latvia’s

335 Interview R47. 336 Latvian Export and Import Directory, ‘Renewable energy in Latvia’, retrieved from: http://www.exim.lv/uploaded_files/catalogue_files/Renewable%20Energy.pdf, consulted on 29 May 2012. 337 National Geographic, ‘Hydropower – going with the flow’, retrieved from: http://environment.nationalgeographic.com/environment/global-warming/hydropower-profile/, consulted on 29 February 2012. 338 Interview R47. 339 European Commission, ‘LATVIA – Energy Mix Fact Sheet’, retrieved from: http://ec.europa.eu/energy/energy_policy/doc/factsheets/mix/mix_lv_en.pdf, consulted on 12 February 2012. 340 G. Lejins & M. Aljens, ‘Energy Law in Latvia–Recent Developments in Latvian Energy Market’, retrieved from: http://www.rln.lv/en/publications/European_Energy_Review.pdf, consulted on 09 April 2012. 341 Ibid. 342 The European Parliament and the Council, Directive 2009/73/EC of 13/07/2009, Concerning common rules for the internal market in natural gas an repealing Directive 2003/55/EC, available at http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:211:0094:0136:en:PDF. LATVIA AND THE EUROPEAN UNION 275 total energy consumption.343 As a result, Latvia’s total energy consumption in 2004 was 39 % lower than in 1990.344 Nearly all of Latvia’s domestic supply of energy is provided by hydro plants and gas, while wind and biomass constitute a share of less than one per cent of all energy production from renewable energy sources.345 The different energy markets in Latvia are the heat market, the electricity market and the gas market.346These will be described in more detail below.

7.8.2 The Latvian heat market The Latvian heat market is very domestic and not commercial. The heat supply is centralised, which means that Latvian citizens make use of district heating.347 This sector is regulated by the Public Utility Commission. The prices differ among the regions to some extent, because they are set by the local authorities. Cogeneration stations are used for the production of heat. Most of these stations are designed for the use of gas, therefore biomass (wood) is rarely used for these stations.348 Currently, this sector is slowly moving towards a wider use of biomass. However, this change requires expensive investments and is therefore not developing rapidly.349

7.8.3 The Latvian electricity market The electricity market can be characterised as the most advanced and most developed energy sector in Latvia. It was opened in 2007, and the state-owned company Latvenergo has the biggest share in the market. The rest of the share is divided between approximately 10 other Latvian companies, and also some Estonian and Lithuanian companies. The hydro and combined heat and power plants that are under control of Latvenergo generate more than half of the total amount of electricity that is consumed in Latvia.350 Latvener- go currently generates approximately 88 % of all electricity generated in Latvia,351 of which approximately 70% comes from hydro power plants.352 Hydro plants generate electricity with

343 Latvian Export and Import Directory, ‘Renewable energy in Latvia’, retrieved from: http://www.exim.lv/uploaded_files/catalogue_files/Renewable%20Energy.pdf, consulted on 29 February 2012. 344 European Commission, ‘LATVIA – Energy Mix Fact Sheet’, retrieved from: http://ec.europa.eu/energy/energy_policy/doc/factsheets/mix/mix_lv_en.pdf, consulted on 12 February 2012. 345 Latvian Export and Import Directory, ‘Renewable energy in Latvia’, retrieved from: http://www.exim.lv/uploaded_files/catalogue_files/Renewable%20Energy.pdf, consulted on 29 February 2012. 346 Interview R47. 347 Ibid. 348 Ibid. 349 Ibid. 350 Latvenergo, ‘Energy Generation’, retrieved from: http://www.latvenergo.lv/portal/page/portal/english/latvenergo/main/about_latvenergo/energy_production, consulted on 29 February 2012. 351 Latvian Export and Import Directory, ‘Renewable energy in Latvia’, retrieved from: http://www.exim.lv/uploaded_files/catalogue_files/Renewable%20Energy.pdf, consulted on 29 February 2012. 352 Latvenergo, ‘Energy Generation, retrieved from: http://www.latvenergo.lv/portal/page/portal/english/latvenergo/main/about_latvenergo/energy_production, consulted on 29 February 2012. 276 ECONOMY

the use of moving water, and most of the hydro stations are therefore located in the biggest river of Latvia, the Daugava river. Especially the hydro stations replace oil as a fuel. The available amount of hydro resources is dependent on the meteorological conditions and the water flows in Latvia’s rivers. Therefore, the amount of generated electricity from hydro plants is not completely reliable and the output can fluctuate.353 Fluctuations in the output of some hydro plants have led to some fluctuations in the electricity generation in the last ten years.354 There are hydro power stations located in 5egums, P-avi(as and Riga with a capacity of 264.1 MW, 868.5 MW and 402 MW, respectively.355 (In comparison, 1 MW can run about 240 to 300 households a year).356 The hydro plant HHP-1 in 5egums is the oldest hydropower plant on the Daugava and was constructed in 1936 – 1940.357 The remaining share of generated electricity comes from combined heat and power plants working in cogeneration mode. With the use of the cogeneration mode it is possible to simultaneously generate both electricity and useful heat. The produced heat can in turn be used for the district heating. Latvenergo imports the remaining part of the electric supply for Latvia from Estonia, Lithuania and Russia.358 The electricity from Russia is imported through Lithu- ania and Estonia, because Latvia has no direct electricity connections with Russia as a result of the Baltic Grid.359 The European Union has a large influence on the development of the Latvian electricity market. In 2009 it established the Baltic Energy Market Interconnection Plan (BEMIP),360 which identifies the main projects that need to be implemented in order to create an integrated Baltic energy market into the EU’s energy market. The project identifies the main electricity projects that are labelled as priority projects for EU funding for the new budget of 2014- 2020.361 At the moment the EU is also finalising the content of a new initiative, the Connect- ing Europe Facility. This initiative has three smaller components for connecting Europe in transport, energy and telecommunications and ICT.362 With this new initiative, the EU aims to

353 National Geographic, ‘Hydropower – going with the flow’, retrieved from: http://environment.nationalgeographic.com/environment/global-warming/hydropower-profile/, consulted on 29 February 2012. 354 Latvian Export and Import Directory, ‘Renewable energy in Latvia’, retrieved from: http://www.exim.lv/uploaded_files/catalogue_files/Renewable%20Energy.pdf, consulted on 29 February 2012. 355 Ibid. 356 Ehow, ‘What is MW in Electrical Work?’, retrieved from: http://www.ehow.com/about_6386170_mw- electrical-work_.html, consulted on 8 April 2012. 357 Latvenergo, ‘Hydropower plants (HPP)’, retrieved from: http://www.latvenergo.lv/portal/page/portal/english/latvenergo/main/about_latvenergo/energy_production/hidroe lektrostacijas/, consulted on 8 April 2012. 358 Interview R47. 359 Ibid. 360 European Commission, ‘Energy Infrastructure: Baltic Energy Market Interconnection Plan (BEMIP)’, retrieved from: http://ec.europa.eu/energy/infrastructure/bemip_en.htm, consulted on 10 May 2012. 361 Interview R47. 362 European Commission press release. ‘Connecting Europe Facility: Commission adopts plan fot 650 billion boost to European networks’, retrieved from: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/1200, consulted on 10 May 2012. LATVIA AND THE EUROPEAN UNION 277 invest 9.1 billion euros into trans-European energy infrastructure.363 In this initiative, regional projects of the Baltic states are also named as priority projects, such as the strengthening the western electricity grid.364 Currently, Latvia is already developing the electricity infrastructure with the help of EU funds. One of the biggest projects is the Nordic Power Exchange, which will be completed at the end of 2012.365 This project will connect the Baltic states with the Nordic states, such as Sweden, Finland, Norway and Denmark.366 The Nordic Power Exchange will result in a wider opening of the Latvian electricity market, because Latvia will be able to export and import electricity to and from the Nordic countries.367 The possibility to import electricity from Nor- dic countries also guarantees an uninterrupted electricity supply in Latvia in case the output of the hydro plant fluctuates.368

7.8.4 The Latvian gas market The gas sector is the least dynamic and the most complicated energy sector in Latvia, because this sector is monopolised and is completely isolated from Europe. Latvia has gas connections with Lithuania, Estonia and Russia.369 Lacking fossil resources, Latvia imports oil and gas, mainly from Russia. The imported gas from Estonia and Lithuania also originates from Rus- sia. Latvia is therefore completely dependent on Russia for the import of gas.370 As a result, its energy import dependency is above the average of the 27 EU Member States.371 The company Latvijas Gaze holds the monopoly of the Latvian gas market. Currently, Latvijas Gaze is the only merchant in the natural gas market in Latvia. It was founded in 1861 and during the Soviet regime it was part of the planned economy. After the collapse of the Soviet regime, Latvijas Gaze was privatised. The privatisation was completed in 2002.372 The privatisation agreement between the Latvian government and Latvijas Gaze states that Latvi- jas Gaze has exclusive rights to be the only monopoly gas company until 2017.373 As a result, the EU has made exceptions for the diverging Latvian gas situation, with regard to EU com-

363 Ibid. 364 Interview R47. 365 Ibid. 366 Unknown author, ‘The Nordic Power Echange’, retrieved from: http://web.ing.puc.cl/~power/alumno99/Development%20of%20the%20Nordic%20Electric%20market/Nordpoo l1.htm consulted on 10 May 2012. 367 Interview R47. 368 Latvenergo, ‘Energy Generation’, retrieved from: http://www.latvenergo.lv/portal/page/portal/english/latvenergo/main/about_latvenergo/energy_production, consulted on 29 February 2012. 369 Interview R47. 370 Ibid. 371 European Commission, ‘LATVIA – Energy Mix Fact Sheet’, retrieved from: http://ec.europa.eu/energy/energy_policy/doc/factsheets/mix/mix_lv_en.pdf, consulted on 12 February 2012. 372 Latvijas Gaze, ‘A glimpse into the history of gas industry in Latvia’, retrieved from: http://www.lg.lv/uploads/filedir/File/Uznemuma_darbiba/A%20glimpse%20into%20the%20history%20of%20g as%20industry%20in%20Latvia.pdf, consulted on 18 March 2012. 373 Interview R47. 278 ECONOMY

petiveness. The shareholders of Latvijas Gaze are Germany’s E.ON-Ruhrgas International GmbH, Russia’s OJSC Gazprom and LLC ITERA Latvija, a gas company that was established by Gazprom. In December 2009, the share of these companies was 47.23 %, 34 % and 16 %, respectively. The remaining shareholders accounted for 2.77% in December 2009.374The German company E.ON Ruhrgas is formally the major shareholder, but Gazprom, in partnership with its subsidiary Itera Latvija, plays the leading role in the company.375 Due to the close relationship between Latvijas Gaze and Gazprom, it is possible for Latvijas Gaze to negotiate favourable gas prices.376 Latvijas Gaze carries out the transmission, distribution, storage and sale of natural gas. Also, Latvijas Gaze encompasses the In*ukalns Underground Gas Storage Facility, located in Latvia. Latvia has unique storage facilities due to its geological characteristics: its subterrane- an depths have a layer of porous sandstone that allows for storage of gas and is covered with layers of gas-impermeable rock.377 The In*ukalns underground gas storage facility is among the largest underground gas storages in Europe378 and is currently the only functioning gas storage location in the Baltic states. It has a storage capacity of 3.2 billion m7, of which 2.3 billion m7 is currently in use.379 Russian gas is bought only during the three months of summer, when the gas prices are lowest.380 This gas is then pumped into the underground gas storage, in order to secure the gas supply to the customers for the rest of the year. The gas from the underground gas storage is sold to Latvian customers, but also to Estonia and Lithu- ania and sometimes it is sold back to Russia.381 The goal of the gas storage locations is to secure the gas supply during the different seasons, but they can also function as a guarantee for stable seasonal supplies for neighbouring countries.382 Feasibility studies have shown that there is a possibility for another gas storage that could be three times bigger than In*ukalns.383 This potential gas storage is located near Dobele and this storage could have a storage capacity of at least 10billion m3. However, Latvia is not in-

374 Latvijas Gaze, ‘Shareholders’, retrieved from: http://www.lg.lv/index.php?id=94&lang=eng, consulted on 8 April 2012. 375 Latvian Institute of International Affairs, Energy – Pulling the Baltic Sea Region together or apart?(2009), p. 242, retrieved from: http://liia.lv/site/attachments/17/01/2012/Energy-Baltic-region.pdf. 376 Interview R47. 377 Latvijas Gaze, ‘Description of the storage facility’, retrieved from: http://www.lg.lv/index.php?id=194&lang=eng, consulted on 18 March 2012. 378 United Nations Economic Commission for Europe, ‘The outlook of Latvian potential underground gas storages and prospects of utilization of this potential for securing of reliable gas supply to Europe’, retrieved from: http://www.unece.org/fileadmin/DAM/energy/se/pdfs/wpgas/session/17_countr/latvia.pdf, consulted on 8 April 2012. 379 Latvijas Gaze, ‘Description of the storage facility’, retrieved from: http://www.lg.lv/index.php?id=194&lang=eng, consulted on 18 March 2012. 380 Interview R47. 381 Ibid. 382 Latvijas Gaze, ‘Description of the storage facility’, retrieved from: http://www.lg.lv/index.php?id=194&lang=eng, consulted on 18 March 2012. 383 Interview R47. LATVIA AND THE EUROPEAN UNION 279 terested in using this potential gas storage for its own consumption, because the In*ukalns Underground Gas Storage Facility is already sufficient for the gas consumption of the whole region. Poland has shown interest in the use of this potential gas storage for security reasons, because their annual gas consumption is around 10 billion m3, while their storage is only 1 billion m3. However, at the moment there are no gas connections with Poland. New gas connections have to be established before Poland could make use of this gas storage.384 Because of a lack of alternative gas resources, it is unlikely that the Latvian gas market will develop competition in the short run. Therefore, the dependence of Latvia on Russia’s energy resources is becoming an issue of growing importance.385 In order to solve this problem, the European Commission is willing to fund new infrastructure. The most topical one for the moment is the Liquid Natural Gas (LNG) Terminal. In the autumn of 2012, the European Commission will finish its analysis on which location in the Baltic states is the most favourable for setting up an LNG terminal. This LNG terminal can serve as a backup plan for the Baltic states, and in this way it will increase the energy diversification in Latvia and the rest of the Baltic states.386 Also, the possible underground gas storage of Dobele could function as a gas storage for the LNG terminal, due to the strong interconnections between the Baltic states. However, LNG is more expensive than natural gas, and would only become competitive if the natural gas prices would increase. On the other hand, the LNG alternative could serve as a back-up plan for the gas supply in Latvia.387

7.8.5 Renewable resources A great share of the Latvian energy market is already provided with renewable energy. The Latvian share of renewable energy is the largest within the EU,388 because it mainly makes use of hydro renewable sources for the generation of electricity. However, there is more potential for the Latvian energy market to further develop the use of renewable and climate friendly energy sources.389 Latvia has significant wood resources. However, Latvia lacks installations that can use biomass as an energy source. Also, many Latvian cogeneration stations that are used for heating are designed for the use of gas.390 As a result, large amounts of wood pallets are being exported to the Nordic countries and especially Denmark. This high share of these exports relates to the slow development of the use of biomass for the generation of electricity in Lat-

384 Ibid. 385 European Commission, ‘LATVIA – Internal Market Fact Sheet’, retrieved from: http://ec.europa.eu/energy/energy_policy/doc/factsheets/market/market_lv_en.pdf, consulted on 12 February 2012. 386 Interview R47. 387 Ibid. 388 Latvian Export and Import Directory, ‘Renewable energy in Latvia’, retrieved from: http://www.exim.lv/uploaded_files/catalogue_files/Renewable%20Energy.pdf, consulted on 29 February 2012. 389 Ibid. 390 Interview R47. 280 ECONOMY

via.391 Wind energy currently constitutes a share of less than one per cent of all energy production from renewable energy sources in Latvia.392 However, there is a very good potential for developing more wind energy, especially alongside the Baltic Sea coastline of Latvia.393 The Latvian government is conducting a feasibility study to define favourable spots for building wind parks.394 The use of solar energy is not very popular in Latvia.395 The relatively low solar radiation level in Latvia contributes to this. Only a few solar energy projects have been implemented in Latvia within the framework of different bilateral programmes, for example the solar heating system of Aizkraukle secondary school, which was financed by the Danish energy Authori- ty.396 Latvia has potential for a wider use of renewable energy in their energy mix, but the Lat- vian government has no intention to further develop this without European initiatives.397 The government is not promoting the use of wind or solar energy due to unfavourable climate conditions and high costs.398 Latvia already has a share of 32 % of renewables in their energy mix, because of their use of hydro power and biomass. The EU requires that countries will achieve a share of 20 % of renewables in their energy mix by 2020,399 a target that Latvia has already achieved.400

7.8.6 Latvia’s energy policy since its independence In the last two decades, the Latvian government has had a discontinuous energy policy approach.401 The Latvian government switches between, on the one hand,a policy that aims for Latvian energy independence and the diversification of energy supplies, a policy that is also in line with the common EU policy;402and on the other hand a policy that is more in favour of an economic approach that ensures lower prices and takes advantage of the Latvian coopera-

391 Latvian Export and Import Directory, ‘Renewable energy in Latvia’, retrieved from: http://www.exim.lv/uploaded_files/catalogue_files/Renewable%20Energy.pdf, consulted on 29 February 2012. 392 Ibid. 393 Ibid. 394 Interview R47. 395 Ibid. 396 Latvian Export and Import Directory, ‘Renewable energy in Latvia’, retrieved from: http://www.exim.lv/uploaded_files/catalogue_files/Renewable%20Energy.pdf, consulted on 29 February 2012. 397 European Parliament and the Council, ‘Directive on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC’, Directive 2009/28/EC of 23 April 2009. 398 Interview R47. 399 European Commission, ‘Renewable energy’, retrieved from:http://ec.europa.eu/energy/renewables/targets_en.htm, consulted on 18 May 2012. 400 Interview R47. 401 Latvian Institute of International Affairs, Energy ‘Pulling the Baltic Sea Region together or apart?’,2009, pp. 231-233. Available at http://liia.lv/site/attachments/17/01/2012/Energy-Baltic-region.pdf. 402 Ibid. LATVIA AND THE EUROPEAN UNION 281 tion with Russia.403 The first approach was prevalent after Latvia’s newly gained independence from the So- viet Union. In addition, the Russian-Ukraine gas dispute and the launch of the Nord Stream gas pipeline also increased Latvian concerns for a secure gas supply.404 The Nord Stream gas pipeline was regarded as an attempt of Russia to bypass Latvia as a possible gas transportation country, and Latvia feared that this pipeline would increase Russia’s political and economic influence in Europe. These occurrences strengthened the will in the Latvian government to pursue a policy that promoted energy independence and the diversification of energy supplies.405 The economic approach became more visible in the aftermath of the Latvian governmental elections in late 2006. Due to economic opportunities and business opportunities with Rus- sia, the Latvian government came to regard the energy cooperation with Russia as an advantage, instead of as a threat.406 This governmental approach also resulted in new gas infrastructure projects in the Latvia.407 At present, the Latvian government is emphasising the European direction with the focus on energy diversification. The LNG terminal and the projects for establishing more interconnections with Europe are good examples of this current focus of the government.408 On the other hand, the Latvian government realises that structural connections with Russia cannot be avoided, because Latvia has no alternatives: there are no other gas suppliers at the moment. Therefore the Latvian government understands that a structural change cannot be made over- night. With the help of funding from the European Union, Latvia has possibilities to analyse how the Latvian gas market can be opened up in the future.409

7.9 Agriculture and rural development in Latvia

Before the Second World War, agriculture was an important and dominant sector in Latvia, with a similar land structure as Germany currently has.410 This changed under the Soviet system: industry became the number one priority and agriculture had to take a back seat. From 1947 until 1950 collectivisation of the agricultural sector became finalised, despite protests from the Latvian community.411 Many farms were destroyed, their owners were sent to Sibe- ria and their plots merged into big fields.412 This process is discussed in more detail on page

403 Ibid. 404 Ibid. 405 Ibid. 406 Ibid. 407 Ibid. 408 Interview R13. 409 Interview R47. 410 Interview R29. 411 R. Misiunas & R. Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 102-103. 412 Interview R29. 282 ECONOMY

34. From that time until the newly declared independence in 1991 there were only collective farms and state farms, which were mainly engaged in grain crops or the cultivation of one particular crop.413 However, during the last decades of Soviet control, very small private farms and some live stock farms were allowed by the Soviet authorities as well, and remarkably, these tiny farms played a significant role in supplementing the poor output of the highly inefficient collective and state farms.414 Most of the country’s livestock was held on such small private farms during the end of communist rule.415 After 1991, de-collectivisation was one of the main goals of the new independent government. It was hoped that higher production levels and efficiency would be reached by pri- vatising the agricultural sector.416 Nevertheless, the reorganisation and total destruction of the previous production structure of the Latvian agricultural sector resulted in a dramatic decline of agricultural production during the 1990s.417 Nearly all large collective farms were shut down and agricultural land was divided into small plots. Much of the land was returned to the previous owners who owned the land before the Second World War. As a result, large agricultural plots were divided into a new, highly fragmented structure of small plots, which often did not even have a connection to a road.418 Furthermore, as a consequence of the collapse of the Soviet Union, the agricultural sector lost its most important export market, Russia, and it was not able to compete with highly subsidised farmers from western Europe.419 All these factors, together with the rising costs of farm equipment, resulted in the dramatic decline of agricultural production.420 As illustrated in Figure 7.3 and Figure 7.4 below, milk production declined with almost 60 % during the 1990s, while meat production dropped to just 20 % of the former production levels.

413 R. Misiunas & R. Taagepera, The Baltic States: Years of Dependence 1940-1990, London: Hurst & Company 1993, pp. 102-103. 414 Interview R29. 415 Ibid. 416 J. Davis, ‘Understanding the process of de-collectivisation and agricultural privatisation in transition economies: the distribution of collective and state farm assets in Latvia and Lithuania’, Europe-Asia Studies 8, 1997, p. 1411. 417 Interview R29. 418 Ibid. 419 Interview R53; interview R61. 420 Interview R29. LATVIA AND THE EUROPEAN UNION 283

Figure 7.3: Milk production in the Baltic States 1990-2010 (1990=100%).421

Figure 7.4: Meat production (Pork, beef, poultry) in the Baltic States 1990-2010 (1990=100%)422

Figure 7.3 and Figure 7.4 also show that the drop in production was slightly lower in Lithua- nia and Estonia. This is mainly because the reform process in these countries was slower and

421 Ibid. 422 Ibid. 284 ECONOMY

more transitionally, meaning that they held on to more large farms.423 The drop in agricultural production in Latvia also resulted in a rise in unused agricultural land; by now many former plots have been overgrown with bushes.424 Despite the low agricultural production, agriculture remains the major user of rural land and one of the main providers of employment in rural areas.425 In 2007, 7.4 % of the employed people in Latvia were employed in agriculture, while only contributing to 2.2 % of the overall GDP at current prices.426 This relatively low contribution to Latvia’s economy and high employment suggests that the effectiveness of the agricultural sector is low. This is also illustrated by the fact that in 2006 the average value added in euros per person employed in agriculture in the EU-15 countries was 7.7 times higher than in Latvia.427 The main reasons for this inefficiency include the small economic size of farms, bad equipment and a low level of specialisation.428 Moreover, it can be said that the agricultural sector still has not fully recovered or matured since Latvia’s regained independence in 1991.

7.9.1 Current state of the agricultural sector Despite the fact that Latvia has always had a large agricultural sector, the import-dependence of agricultural products has risen from 25 % in 2004 to 34 % in 2007.429 Regarding cereals and flour products, Latvia is almost self-sufficient, but when it comes to meat products its self-sufficiency is declining.430 Poultry is mainly imported from Lithuania and the Benelux, while beef is mainly imported from Poland and Lithuania, and pork from Germany and Po- land.431 Furthermore, import-dependence reaches 30 % for vegetables, primarily imported from the Netherlands, and 65-80 % with regard to fruits.432 In 2007 crop farming accounted for 57.9 % of the total value of agricultural output and cattle breeding for the remaining 42.1 %. Due to good weather conditions, cereals became the most significant agricultural product in Latvia in 2007, as is shown in Figure 7.5 below. Furthermore, in 2008, the total value of milk production had more than doubled compared to 2003, which shows that dairy is becoming increasingly important as well. Efficiency has grown in Latvian agriculture, but it should still be regarded as its main weakness. This is mainly due to insufficient resources such as out-dated technology, machin-

423 Ibid. 424 Ibid. 425 Ministry of Agriculture of the Republic of Latvia, Agriculture and Rural Area of Latvia, Riga: Ministry of Agriculture of the Republic of Latvia 2007, p. 8. 426 Ibid., p. 8. 427 Ibid., p. 9. 428 Ibid., p. 9. 429 Latvian Council of Science, ‘The main directions of research in Economics, Law and Historical Sciences by the Latvian Council of Science in 2009’, Riga: Latvian Council of Science 2010, p. 95. 430 Ibid., p. 95. 431 Ibid., p. 95 432 Ibid., p. 96. LATVIA AND THE EUROPEAN UNION 285 ery and buildings.433 Despite the technical modernisation accompanying CAP and structural funds support, 89 % of tractors and 91 % of harvesters were older than 10 years in 2006. Fur- thermore, the production structure in Latvian agriculture is still very fragmented. In 2010, an agricultural census in Latvia recorded 83 400 agricultural holdings of which 47 100 (or 56.5 %) did not produce any agricultural products for sale, but solely for their own consumption.434 This fragmented structure results in low productivity, especially compared to developed countries.435 Another weakness is the large proportion of undereducated employees in the agricultural sector.436 Experts question the professionalism of agricultural education and emphasise the need to set up a new education system, to replace the system Latvia inherited from the Soviet time.437

Figure 7.5: Changes in value of selected products in 2003-2008 (at basic prices).438

Still, Latvian agriculture has several potential strengths. One of those is the large proportion of Latvian territory suitable for agriculture. Furthermore, Latvia has relatively low labour costs, which can contribute to competitiveness: an average worker employed in agriculture earns approximately 300 lats (420 euros) per month.439 The development of organic farming is also regarded as a possibility for Latvian agriculture.440 However, opinions are divided on this matter. Proponents say that Latvia’s agricultural sector is very suitable for organic farming and that there is a potentially large demand for organic products.441 Others are reserved

433 Ministry of Agriculture of the Republic of Latvia, ‘Latvian Rural Development National Strategy Plan’, retrieved from: http://www.zm.gov.lv/?sadala=1266, consulted on 17 March 2012, p. 17. 434 Central Statistical Bureau of Latvia, Agricultural Census of Latvia in 2010, Riga: Central Statistical Bureau of Latvia 2011, p.46. 435 Interview R29. 436 Ministry of Agriculture of the Republic of Latvia, ‘Latvian Rural Development National Strategy Plan’, retrieved from: http://www.zm.gov.lv/?sadala=1266, consulted on 17 March 2012, p. 22. 437 Interview R29. 438 Ministry of Agriculture of the Republic of Latvia, ‘Agriculture and Rural Area of Latvia 2009’, p. 7. 439 Interview R53; interview J03. 440 Ministry of Agriculture of the Republic of Latvia, ‘Latvian Rural Development National Strategy Plan’, retrieved from: http://www.zm.gov.lv/?sadala=1266, consulted on 17 March 2012, p. 22. 441 Interview R44; Ministry of Agriculture of the Republic of Latvia, ‘Latvian Rural Development National Strategy Plan’, retrieved from: http://www.zm.gov.lv/?sadala=1266, consulted on 17 March 2012, p. 22. 286 ECONOMY

about organic farming and emphasise that Latvia’s local consumers prefer the cheapest product, not the greenest.442 Furthermore, people buying organic food generally want this to be locally produced goods; this makes organic food unsuitable as an export product.443 Further- more, experts state that organic farming requires higher educational standards than now exist in Latvia as it is more complex than conventional farming.444 A more realistic opportunity for Latvian agriculture could be the increasing demand for renewable sources of energy, for which Latvia can use its large forestry sector.445 Possibilities for development of the Latvian agricultural sector will mainly be provided by possible future economic growth and efficient utilisation of EU funds related to agriculture and rural development, which are the main source of investment in the sector.446 Therefore, according to the rural development strategic plan of Latvia, the main possible threat to the development of the Latvian agricultural sector are possible changes in the CAP and other EU structural funds, and the large differences in support levels on the EU market to the disadvantage of Latvia’s competitiveness.447 Latvia’s position regarding the CAP and structural funds will be further examined below.

7.9.2 Latvia and the Common Agricultural Policy of the EU The Common Agricultural Policy (CAP) of the EU is aimed at ensuring food security in Eu- rope and a fair standard of living for farmers, while at the same time encouraging farmers to maintain their land in good environmental condition.448 The CAP is financed by two funds which consume a large part of the EU’s general budget. The first one is the European Agricul- tural Guarantee Fund (EAGF), which attempts to regulate agricultural markets by intervention and export refunds and currently uses direct payments, granted directly to farmers under certain support schemes. The European Agricultural Fund for Rural Development (EAFRD), also known as the second pillar of the CAP, is the fund which finances the rural development programme of Member States such as Latvia.449 In 2011, Latvia received a total of 338 million euros through these two funds.450

442 Interview R29. 443 Ibid.; interview R53. 444 Interview R29. 445 Ministry of Agriculture of the Republic of Latvia, ‘Latvian Rural Development National Strategy Plan’, retrieved from: http://www.zm.gov.lv/?sadala=1266, consulted on 17 March 2012, p. 23. 446 Interview R29. 447 Ministry of Agriculture of the Republic of Latvia, ‘Latvian Rural Development National Strategy Plan’, retrieved from: http://www.zm.gov.lv/?sadala=1266, consulted on 17 March 2012, p. 23. 448 European Commission, ‘A history of successful change’, retrieved from: http://ec.europa.eu/agriculture/capexplained/change/index_en.htm, consulted on 06 April 2012. 449 The Council of the European Union, ‘Council Regulation on the financing of the common agricultural policy’, Nr. 1290/2005. 450 Interview R44. LATVIA AND THE EUROPEAN UNION 287

Latvia and CAP direct payments Until 1992, the CAP budget was mainly spent on price support.451 Farmers were guaranteed a minimum price for their crops, so the more they produced, the more subsidies they received. However, after a series of reforms the Single Payment Scheme (SPS) was introduced in 2004.452 The new SPS replaced eleven previous subsidy schemes that all related to the production of crops and livestock; under the SPS, the EAGF makes direct payments per hectare of farmland that is maintained in ‘good agricultural condition’.453 Only farmers actively farming on the date their Member State introduced the SPS scheme are entitled to payments, which are based on reference amounts. Entitlements are activated annually and farmers need to possess ‘eligible’ hectares, which are all types of agricultural land except land used for permanent crops and forestry, to comply.454 Furthermore, to qualify for payments, farmers have to abide by a comprehensive set of rules and comply with cross-compliance standards, which cover environment, food safety, animal and plant health, and animal welfare law.455 For Latvia, and the other Member States who joined the EU in 2004 and 2007, a simplified transitional support scheme exists, called the Single Area Payment Scheme (SAPS).456 Just like the SPS, the SAPS links payments to hectares of agricultural land, but does not use payment entitlements or reference amounts, as new Member States cannot have these.457 In other words: under SAPS, Latvian farmers can receive a fixed amount of direct payments per hectare of agricultural land. However, for the calculation of the amount of money a farmer can receive per hectare, a reference amount of utilised agricultural area is still used, but the country as a whole is used for this reference amount.458 For Latvia and the other Baltic states this has resulted in relatively low payments and high dissatisfaction amongst farmers and elites, which will be further discussed below.459 With the exception of Malta and Slovenia, all new Member States have decided to apply the SAPS. The SAPS was established for a transitional period of five years, but after a ‘Health Check’ of the CAP reform in 2008, it was decided to extend it until the end of 2013.460 In the new Member States, direct payments are phased-in during a transitional period

451 European Commission, ‘A history of successful change’, retrieved from: http://ec.europa.eu/agriculture/capexplained/change/index_en.htm, consulted on 06 April 2012. 452 The Council of the European Union, ‘Council Regulation establishing direct support schemes’, Official Jour- nal of the European Union, No 1782/2003. 453 European Commission, ‘A history of successful change’, retrieved from: http://ec.europa.eu/agriculture/capexplained/change/index_en.htm, consulted on 06 April 2012. 454 Ibid. 455 The Council of the European Union, ‘Council Regulation establishing direct support schemes’, Official Jour- nal of the European Union, No 1782/2003, p. 08. 456 The Council of the European Union, ‘Regulation No 1121/2009 concerns support schemes other than the Single Payment Scheme’, retrieved from: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:316:0027:0064:EN:PDF, consulted on 16 March 2012. 457 Ibid. 458 Interview R29; interview R53. 459 Interview R29; interview R53; interview R44. 460 The Council of the European Union, ‘Council Regulation No 73/2009’, retrieved from: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:030:0016:0099:EN:PDF, consulted on 16 March 2012. 288 ECONOMY

which lasts until 2013; this means they do not get the full amount of direct payments until the transitional period is over.461 Table 7.3 shows the amount of SAPS payments (direct payments) per year from 2007 to 2011.

Year Scheme Financing, euros 2007 SAPS 55 815 000 2008 SAPS 69 769 000 2009 SAPS 83 723 000 2010 SAPS 99 653 000 2011 SAPS 111 260 000

Table 7.3: SAPS financing in euro per year 2007-2011.462

In order to increase the overall support level during the transitional period, Latvia makes use of the possibility to allocate additional Complementary National Direct Payments (CNDP) to farmers from the national budget.463 The CNDPs allows the new Member States to differenti- ate the total direct support level regarding specific sectors, to a certain extent. Aside from the CNDPs, Latvia also makes use of separate sugar payments. These payments act as compensation payments to sugar beet farmers, after all sugar beet factories in Latvia were shut down in 2006 by a government decision.464 At the moment there are no sugar beet factories left in Lat- via. The compensation payments will end in 2013.465

Effects of CAP in Latvia One development regarding direct payments, which worries some experts, is the increasing amount of so-called ‘sofa farmers’.466 These are small farmers choosing to just cut the grass in their fields and to not grow any crops, since for the growing crops they have to comply with other additional conditions, while for grass the only rule is that they have to cut it every year.467 According to several observers, this is the result of the growing pressure on farmers from the EU’s environmental soil and air strategy, which has resulted in too many rules (and therefore risks) for these small farmers if they grow crops or have animals.468 Instead they choose to just cut the grass once a year, receive minimal payment for this and avoid, amongst

461 Interview R29; interview R53; interview R44. 462 Interview R44. 463 The Council of the European Union, ‘Regulation No 1121/2009 concerns support schemes other than the Single Payment Scheme’, retrieved from: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:316:0027:0064:EN:PDF, consulted on 16 March 2012. 464 Interview R44. 465 Ibid. 466 Ibid. 467 Ibid. 468 Interview R29; interview R53. LATVIA AND THE EUROPEAN UNION 289 others, competition, price fluctuations, environmental inspections and diseases.469 Another development in Latvia regarding direct payments is that the amount of applications for direct payments is declining, while the amount of hectares for which direct payments are requested is rising.470 This means that the size of farms applying for direct payments is rising. This is mainly caused by the low level of payments Latvia receives.471 In general, the larger the economic size of a farm, the bigger their net profit.472 For small farms it is more difficult to survive, since bigger farms have a competitive advantage because of economies of scale.473 This competitive advantage becomes larger as the payments become less, and vice versa. The size of Latvian farms is thus related to the level of payments and at the current low level of payments in Latvia more and more small farmers are unable to survive anymore; the only way to survive is to expand and intensify farming.474 This development frustrates some experts; their objections to the CAP will be further specified below.

Latvia’s objections to CAP Latvia has serious objections against the current state of CAP funding and feels that the less- developed, new Member States have a considerable disadvantage compared to old Member States.475 Latvia receives the lowest amount of direct payments per hectare of agricultural land of all Member States and feels that this is distorting competition.476 According to the Latvian Ministry of Agriculture, Latvia will receive only 93 euros per hectare in 2013, while the EU average will be 313 euros.477 This low amount results from the fact that the payments per hectare were calculated according to a reference amount of utilised agricultural area of the mid-1990s, directly after the dramatic drop of agricultural production in the Baltic countries.478 As a consequence, all three Baltic countries receive the lowest payments in Europe while their overall production costs are at western European levels.479 This leaves Latvian farmers with a serious competitive disadvantage. As a result, direct payments’ share in Latvian farmers’ total income of farmers is very low as compared to other Member States. In Latvia, direct payments account for 8 to 20 % of farmers’ income, while this number is 80 % in Denmark and 40 % in Germany.480 For exam-

469 Interview R44. 470 Ibid. 471 Interview R29. 472 Ibid. 473 Ibid. 474 Interview R29; interview R53. 475 Ministry of Agriculture of the Republic of Latvia, ‘Latvia’s position on the Commission Communication: The CAP towards 2020’, retrieved from: http://www.zm.gov.lv/index.php?sadala=40&id=11492, consulted on 12 February 2012. 476 Ibid.; interview R29; interview R61. 477 Ministry of Agriculture of the Republic of Latvia, ‘Latvia’s position on the Commission Communication: The CAP towards 2020’, retrieved from: http://www.zm.gov.lv/index.php?sadala=40&id=11492, consulted on 12 February 2012. 478 Interview R29. 479 Ibid. 480 Ibid. 290 ECONOMY

ple, in the case of cereals, Latvian producers receive the world market price, just like farmers in all Member States. On top of these yields, a Latvian farmer might receive only 10 % in direct payments, while a farmer from Denmark receives 80 %, which makes it almost impossible for Latvian farmers to compete.481 For the period of 2014 – 2020 a new legislative framework is being negotiated for the CAP, which could be a possibility for Latvia to negotiate an increase of CAP funding for Lat- via. The Commission’s reform proposals are based on the ‘Commission Communication on the CAP towards 2020’, in which a broad set of policy options are outlined in order to re- spond to future challenges and ensure territorially and environmentally balanced EU agriculture.482 With regard to direct payments, the Communication aims at redistribution, redesign and better targeting of support to add value and quality, but it also aims for a more equal distribution of funds among Member States.483 After a broad consultation round, in which Latvia actively took part, the Commission presented a set of legal proposals for future CAP regulations in October 2011.484 However, the Latvian government is not satisfied with these proposals and has a clear opinion on the revision of the EU budget for 2014 – 2020 and the CAP financing system. Ac- cording to Latvia, the proposals do not provide sufficient solutions, especially regarding the CAP direct payments, as Latvia would still only receive a little over half of the EU average of direct payments per hectare.485 Therefore, Latvia’s main priority in these negotiations is to revise the direct payment system and to establish objective criteria determining the amount of payments, instead of the current historical criteria which link payments to previous support levels.486 The Latvian government underlines that future systems of direct payment must be based on objective criteria representing the actual situation.487 Therefore, Latvia proposes the following criteria to determine the amount of payments per hectare: amount of hectares of utilised agricultural area; and GDP per capita and costs of maintenance of agriculture land (labour costs, costs of agricultural machinery, depreciation, fuel costs).488 Latvia also proposes minimum (80 % of EU average) and maximum (120 % of EU average) payment levels of CAP support that a Member State is entitled to. Furthermore, if a decision will be made to

481 Ibid. 482 European Commission, ‘Communication: The CAP towards 2020’, Brussels: COM (2010) 672 final. 483 Ibid. 484 European Commission, ‘Legal proposal for direct payment regulations’, COM (2011) 625 final/2, retrieved from: http://ec.europa.eu/agriculture/cap-post-2013/legal-proposals/com625/625_en.pdf, consulted on 16 March 2012. 485 Ministry of Agriculture of the Republic of Latvia, ‘Latvia’s position on the most important EU budgetary matters with regard to CAP and CFP’, retrieved from: http://www.zm.gov.lv/?sadala=2121, consulted on 16 March 2012. 486 Ibid. 487 Ministry of Agriculture of the Republic of Latvia, ‘Latvia’s position on the Commission Communication: The CAP towards 2020’, retrieved from: http://www.zm.gov.lv/index.php?sadala=40&id=11492, consulted on 12 February 2012. 488 Ibid. LATVIA AND THE EUROPEAN UNION 291 reduce the total CAP budget, then this reduction cannot harm the less developed Member States and regions.489 According to the Latvian government, this possible reduction should only be applied to those Member States receiving direct payments above the average level.490 These are ambitious goals, but the ability of Latvia, a small Member State, to influence EU policy on this matter remains a difficult challenge. Therefore, Latvia cooperates extensively with neighbours Estonia and Lithuania. The Baltic states recently issued a joint declaration with their position on a fair CAP for all Member States as well as a joint request to all EU institutions for additional funding needs.491 In addition, the Baltic states also issued a joined declaration with the Visegrad group (Slovakia, Poland, Hungary and the Czech Repub- lic).492 However, a country like the Czech Republic will not fight as hard as Latvia for this cause, because they already receive nearly 90 % of the EU average.493 In order to reach its goal, Latvia will primarily emphasise that the solution to their problem will not lead to a bigger burden for the EU budget and most of all try to convince the European Commission and other Member States of their unfair situation, so as to evoke some compassion.494 Latvia’s minimal negotiating point is to receive 80 % of the EU average, but some experts doubt the feasibility of this goal.495 According to them, both the European Commission and the Member States understand Latvia’s objections and are willing to help, but they are at the same time mindful of their own farmers.496 National leaders are thought to be unable to speak about reforms regarding CAP because of their own audience.497 France could for example be a potential ally, but because of the strong influence of French farmers the country is afraid to act.498

Latvia and its Rural Development Programme The EU’s rural development policy, also referred to as the second pillar of the CAP, is financed by the CAP’s second fund, the European Agricultural Fund for Rural Development (EAFRD). The EU’s rural development policy has the following four main objectives, also called ‘thematic axes’:499

1. Improving the competitiveness of the agricultural and forestry sector; 2. Improving the environment on the countryside;

489 Ibid. 490 Ibid. 491 Interview R61. 492 Interview R29. 493 Ibid.; interview R61. 494 Interview R29; interview R61; interview R01. 495 Interview R61. 496 Interview R29; interview R61. 497 Interview R61. 498 Ibid. 499 The Council of the European Union, ‘Council Decision on Community strategic guidelines for rural development (programming period 2007 to 2013)’, retrieved from: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:055:0020:0029:EN:PDF, consulted on 17 March 2012. 292 ECONOMY

3. Improving the quality of life in rural areas and encouraging diversification of the rural economy; 4. Using ‘LEADER’, a bottom-up, locally based approach to rural development, which aims to stimulate the public to search for new solutions for the existing rural problems.

Member States are obliged to divide the rural development funding they receive from the EAFRD over all four objectives. Every Member State must establish a National Rural Devel- opment Strategy Plan, which sets out its main long-term objectives regarding rural development.500 To achieve the objectives set out in the strategy plan, projects and activities are laid down in a Rural Development Programme, which sets out a more detailed plan regarding the allocation of funds.501 EAFRD financing for Latvian rural development totals 1.04 billion euros for the programming period of 2007 – 2013. The indicative breakdown of EAFRD funding per thematic axis is shown in Table 7.4 below.

Indicative break- EAFRD amount Thematic Axis down of EAFRD (euros) financing 1. Improving the Competitiveness of Agricultur- 46.75 % 486 720 583 al and Forestry Sector 2. Improvement of Environment and Rural Land- 28.05 % 292 032 350 scape 3. Improvement of Quality of Life in Rural Areas and Promotion of Diversification of Economic 18.7 % 194 688 233 Activities 4. LEADER approach 2.5 % 26 027 838 Technical assistance 4 % 41 644 500 Total 100 % 1 041 113 504

Table 7.4: EAFRD funding in Euros per axis for the period 2007-2013.502

Rural development is an important Latvian priority because, with the exception of cities, most of its territory can be considered rural and about half of the country’s population lives in rural territories.503 In general, rural areas are still much less developed than urban territories in Lat- via. EAFRD projects are therefore an important source of development. The employment

500 Ibid. 501 Ministry of Agriculture of the Republic of Latvia, ‘Rural Development Programme for Latvia 2007-2013’, http://www.zm.gov.lv/doc_upl/RDP_final%282%29.pdf, consulted on 17 March 2012. 502 Ministry of Agriculture of the Republic of Latvia, ‘Latvian Rural Development National Strategy Plan’, http://www.zm.gov.lv/?sadala=1266, consulted on 17 March 2012, p. 72. 503 Ibid. LATVIA AND THE EUROPEAN UNION 293 structure of rural areas is dominated by primary sectors such as agriculture, hunting and forestry, which cover around 36 % of rural employment. The main objective of the Latvian Rural Development Strategy is to achieve a situation of ‘prosperous people in [the] sustainably populated countryside of Latvia’.504 In order to achieve this goal, Latvia has established four areas of action which cover a comprehensive set of priorities: the developments of the capacities of rural people, the enhancement of labour- generated income in rural territories, the sustainable management of rural natural resources, and the development of the rural living environment.505 Some doubts regarding the effectiveness of the rural development policy have been voiced regarding competitiveness and capacities of rural people.506 Despite the importance of the EAFRD funds, the policy is not very successful yet because of serious shortcomings in the educational system. According to critics, Latvia first has to decide on a new education system and implement serious reforms, and only then allocate EAFRD funds to appropriate projects.507

7.10 Latvia and the EU’s regional policy

When Latvia joined the EU in 2004 it automatically became eligible for structural funds under the EU’s regional policy, which focuses on three main objectives. Latvia, as a country, is eligible for EU funds under the convergence objective (objective one) of the EU’s regional policy, as Latvia’s GDP per capita is less than 75 % of the EU average.508 The second objective of the EU’s regional policy regards ‘regional competitiveness and employment’ and covers all regions in Europe not covered by the convergence objective. The third objective regards ‘Eu- ropean territorial cooperation’ and aims to encourage cooperation across borders. The regional policy of the EU aims to strengthen economic and social cohesion in the EU and is financed by three main funds: the European Regional Development Fund (ERDF), the Europe- an Social Fund (ESF) and the Cohesion Fund (CF), also known as the structural funds.509 The management of these funds in Latvia is ensured by the Ministry of Finance. Between 2004 and 2006, the main objective of the allocated funds was the reduction of sources of regional disparities. Structural funds assisted in many projects such as road renova- tions/constructions, job creation and support for small and medium-sized enterprises (SMEs). For the period 2007 – 2013 a total of 4.55 billion euros has been allocated to Latvia for the

504 Ibid., p. 5. 505 Ibid., p. 5. 506 Interview R29. 507 Ibid. 508 European Commission, ‘Three Objectives’, retrieved from: http://ec.europa.eu/regional_policy/how/index_en.cfm#3, consulted on 03 June 2012. 509 European Commission, ‘Regional Policy- policy stages step by step’, retrieved on: http://ec.europa.eu/regional_policy/how/policy/index_en.cfm, consulted on 6 May 2012. 294 ECONOMY

achievement of cohesion policy goals.510 The key programming document for 2007 – 2013 is the National Strategic Reference Framework (NSRF) which is developed in the framework of the common EU fund acquisition strategy. In addition, Latvia has established three national Operational Programmes (OP) for the period of 2007 – 2013, which aim to help manage the implementation of EU funds in Lat- via.511 Below, in Table 7.5, the breakdown of the amount of financing per fund is shown, plus the operational programmes through which the funds are managed.

Funds 2007 – 2013 Amount (eu- Percentage of Operational Programme ros) budget

ERDF 2.5 billion 53.86 % OP 2 ‘Entrepreneurship and In- novation’ and OP 3 ‘Infrastruc- ture and Services’

ESF 551 million 12.15 % OP 1 ‘Human Resources and Employment’

CF 1.5 billion 33.99 % OP 3 ‘Infrastructure and Services’

Total 4.55 billion 100 %

Table 7.5: Structural funds for Latvia in billion Euros 2007-2013.512

Latvia’s operational programmes are developed on a sectorial basis and the priorities of each programme will be further specified below.

7.10.1 OP Human Resources and Employment The first operational programme, Human Resources and Employment, is financed by the ESF. Under this programme, financial support from the ESF is provided to activities aimed at: the development of higher education and science; improvement of vocational education, skills and lifelong learning; fostering of employment and social inclusion; promotion of health in the labour force; strengthening of administrative capacity and technical assistance.513 The

510 European Commission, ‘European Cohesion Policy in Latvia’, retrieved from: http://ec.europa.eu/regional_policy/sources/docgener/informat/country2009/lv_en.pdf, consulted on 12 February 2012. 511 European Commission, ‘Regional Policy- policy stages step by step’, retrieved from: http://ec.europa.eu/regional_policy/how/policy/index_en.cfm, consulted on 6 May 2012. 512 European Commission, ‘European Cohesion Policy in Latvia’, retrieved from: http://ec.europa.eu/regional_policy/sources/docgener/informat/country2009/lv_en.pdf, consulted on 12 February 2012. 513 Ministry of Finance of the Republic of Latvia, National Strategic Reference Framework of Latvia 2007-2013, Riga: Ministry of Finance of the Republic of Latvia 2007. LATVIA AND THE EUROPEAN UNION 295 total ESF funding available for this OP is 583.1 million euros, which is allocated through the following six priorities:514

• Priority 1.1 ‘Higher education and science’. This priority aims for the establishment of a competitive and knowledge based economy. To achieve this, the following objectives have been formulated: improving the quality and access to higher education; promoting the modernisation of higher education; promoting the development of science and research potential; promoting cooperation between science, higher education and entrepreneurs; and improving the grand systems for doctor’s degree studies.515 The total ESF funding available for this priority is 116.8 million euros.516 • Priority 1.2 ‘Education and Skills’. This priority complements the former one and aims at meeting the increasing market demand for a knowledgeable and skilful labour force. The main objective is to improve the quality of and access to general and vocational education and to ensure skilful labour matching labour market demand.517 Improved quality of education should also lead to further education for all social groups and the strengthening of the capacity of institutions responsible for education and the lifelong learning objective.518 The total ESF funding available for this priority is 127.8 million euros.519 • Priority 1.3 ‘Promotion of Employment and Health at Work’. This priority aims to successfully integrate residents into the labour market and to keep them there.520 It attempts to do so by ensuring the needed skills of the labour force and equality on the labour market, by improving the health conditions of employees and by taking active employment-oriented measures.521 Furthermore, this priority aims at preventing undeclared work and to stimulate people to embrace the formal economy. The total ESF funding available for this priority is 249.3 million euros.522 • Priority 1.4 ‘Promotion of Social Inclusion’. The main objective of this priority is to fight the risks of poverty and social exclusion by supporting social inclusion programmes and promoting the development of a socially inclusive labour market.523 Some of its aims are: to prevent discrimination in the workplace, to improve the quality and availability of social rehabilitation services and to develop education and training for social service ex-

514 Ibid.; interview R21. 515 Ministry of Finance of the Republic of Latvia, Operational programme ‘Human Resources and Employment’, Riga: Ministry of Finance of the Republic of Latvia 2009, p. 116. 516 Interview R21. 517 Ministry of Finance of the Republic of Latvia, Operational programme ‘Human Resources and Employment’, Riga: Ministry of Finance of the Republic of Latvia 2009, p. 133. 518 Ibid., p. 136; interview R21. 519 Interview R21. 520 Ministry of Finance of the Republic of Latvia, Operational programme ‘Human Resources and Employment’, Riga: Ministry of Finance of the Republic of Latvia 2009, pp. 153-156. 521 Ibid., pp. 154-156. 522 Interview R21. 523 Ministry of Finance of the Republic of Latvia, Operational programme ‘Human Resources and Employment’, Riga: Ministry of Finance of the Republic of Latvia 2009, p. 181. 296 ECONOMY

perts. The total ESF funding available for this priority is 48 million euros.524 • Priority 1.5 ‘Administrative Capacity Building’. This priority aims to reinforce the capacity of national, regional and local administration, as to increase its efficiency and contribution to the country’s economic and social prosperity.525 It also attempts to facilitate cooperation among national, regional and local administration, social partners and NGO’s in order to assure that policies are based on society’s needs. The total ESF funding available for this priority is 22.9 million euros.526 • Priority 1.6 ‘Technical Assistance’. This priority aims to ensure the effective management of the OP. Total ESF funding for this priority is 6 18.3 million.527

These priorities are further divided into areas of activity and sub-activities in order to efficiently manage the allocation of ESF funds. One example of a large sub-activity is the ‘Sup- port to Doctor’s Study Programme’. One of the problems regarding higher education and human resources in Latvia is the low number of students participating in doctoral (PhD) studies.528 This sub-activity therefore aims to increase the number of highly qualified specialists holding a Doctor’s degree by giving grants to doctoral students. It is planned that annually 200 doctoral students will receive such grants on average.529 The total available funding for this sub-activity is 52.9 million euros, of which 49.4 million euros is financed by the ESF. Alf Vanags, director of the Baltic International Centre for Economic Policy Studies (BI- CEPS), an independent research centre located in Riga, has criticised this Operational Pro- gramme for being a weak document.530 He states that the document ‘gives the impression of something that has been ritualistically prepared to meet the formal requirements of an OP, but one that lacks real understanding of the issues, let alone the solutions’.531

7.10.2 OP Entrepreneurship and Innovation Entrepreneurship and Innovation, Latvia’s second operational programme, is financed by the ERDF. This programme aims to develop the capacity of the science and research sector, to encourage the cooperation between researchers and businesses and to support emerging merchants and improve the competitiveness of existing companies.532 The total ERDF funding

524 Interview R21. 525 Ministry of Finance of the Republic of Latvia, Operational programme ‘Human Resources and Employment’, Riga: Ministry of Finance of the Republic of Latvia 2009, pp. 188-189. 526 Interview R21. 527 Ibid. 528 Ministry of Finance of the Republic of Latvia, Operational programme ‘Human Resources and Employment’, Riga: Ministry of Finance of the Republic of Latvia 2009, pp. 128-129. 529 Interview R21. 530 A. Vanags, Latvian ESF Operational Programme ‘Human Resources and Employment’- Comments’, retrieved from: http://www.eu-employment-observatory.net/resources/reports/Latvia-HRandEmployment-EN.pdf, consulted on 19 March 2012. 531 Ibid. 532 Ministry of Finance of the Republic of Latvia, National Strategic Reference Framework of Latvia 2007-2013, LATVIA AND THE EUROPEAN UNION 297 available for this programme is 736.7 million euros, which is allocated through the following four priorities:533

• Priority 2.1 ‘Science and Innovation’. The main objective of this priority is to strengthen the country’s scientific and research potential in order to enhance Latvia’s international competitiveness and promote the transfer of knowledge.534 This shall be realised by investing in equipment of scientific and research centres, strengthening cooperation between businesses and public research centres, developing knowledge transfer infrastructure and establishing aid mechanisms. It also aims to establish a national programme for the protection of intellectual property. The total ERDF funding available for this priority is 425.5 million euros.535 • Priority 2.2 ‘Access to Finances’. This priority attempts to improve the availability of financing for entrepreneurship and innovation, which is necessary for business development.536 Its main objective is to establish a system of financial instruments which includes loan guarantees, venture capital, loans, micro credits for SMEs and other financial instruments.537 The total ERDF funding available for this priority is 184.3 million euros.538 • Priority 2.3 ‘Promotion of Entrepreneurship’. This priority aims to improve the attrac- tiveness and competitiveness of the business environment in Latvia.539 It therefore attempts to promote economic activity, which can be reached by setting up new enterprises and strengthening existing enterprises. An additional aim of this priority is to promote the diversification of the rural economy, in order to enhance entrepreneurship in rural areas as well.540 The total ERDF funding available for this priority is 77 million euros.541 • Priority 2.4 ‘Technical Assistance’. This priority aims to ensure the effective and reliable management of the OP.542 Total ERDF funding available for this priority is 23 million euros.

One example of a large sub-activity of this operational programme is ‘Development of Scien- tific Infrastructure’. During the first application call, the objective is to improve research and

Riga: Ministry of Finance of the Republic of Latvia 2007. 533 Interview R21. 534 Ministry of Finance of the Republic of Latvia, Operational programme ‘Entrepreneurship and innovations’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 45. 535 Interview R21. 536 Ministry of Finance of the Republic of Latvia, Operational programme ‘Entrepreneurship and innovations’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 60. 537 Ibid., p. 60. 538 Interview R21. 539 Ibid. 540 Ministry of Finance of the Republic of Latvia, Operational programme ‘Entrepreneurship and innovations’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 68. 541 Interview R21. 542 Ministry of Finance of the Republic of Latvia, Operational programme ‘Entrepreneurship and innovations’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 79. 298 ECONOMY

scientific equipment and provide appropriate infrastructure in order to ensure modern material and a good technological base for research activities.543 For example, upport is provided for the procurement of world-class scientific equipment and hardware, but also for the reconstruction and renovation of necessary buildings and premises. During the second application call, emphasis is put on the development of research infrastructure to facilitate commercial activities and the promotion of knowledge transfer to the economy.544 In this phase, support is given to projects envisaging cooperation between scientific institutions and commercial entities, for example. The total amount of funding available for this sub-activity is 187.1 million euros, 146.1 million euros of which is financed by the ERDF.545

7.10.3 OP Infrastructure and Services Latvia’s third operational programme, Infrastructure and Services, receives the highest amount of funding, with a total budget of over 3.2 billion euros, and is co-financed by the ERDF as well as the Cohesion Fund.546 Transport infrastructure and ICT infrastructure are top priorities within this programme. The total ERDF funding available for this programme is 1.67 billion euros and CF funding for this programme totals 1.54 billion euros.547 Support is given through the following eight priorities:

• Priority 3.1 ‘Infrastructure for Strengthening Human Capital’. The main objective of this priority is to ensure the efficient use of human capital as the most substantial resource in the Latvian economy. This should be accomplished by improving the infrastructure and equipment in education, employment, social and health care systems and by providing higher quality services to society. 548 The total ERDF funding available for this priority is 504.6 million euros.549 • Priority 3.2 ‘Promotion of Territorial Accessibility’. This priority aims to achieve better accessibility of different parts of Latvia and availability of information and services to all inhabitants of Latvia. Therefore, its main objective is to improve transport infrastructure and ICT infrastructure, both national and regional, which is accessible to all. For example, regarding ICT, it promotes the extension of broadband networks in rural areas.550 The total ERDF funding available for this priority is 511.2 million euros.551

543 Ibid., pp. 52-53; interview R21. 544 Interview R21. 545 Ibid. 546 Ministry of Finance of the Republic of Latvia, National Strategic Reference Framework of Latvia 2007-2013, Riga: Ministry of Finance of the Republic of Latvia 2007. 547 Interview R21. 548 Ministry of Finance of the Republic of Latvia, Operational programme ‘Infrastructure and Services’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 133. 549 Interview R21. 550 Ministry of Finance of the Republic of Latvia, Operational programme ‘Infrastructure and Services’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 164. 551 Interview R21. LATVIA AND THE EUROPEAN UNION 299

• Priority 3.3 ‘Development of Transport Network of European Significance and Pro- motion of Sustainable Transport’. This priority is financed by the CF and complements ERDF projects in the area of transport infrastructure. It aims at the improvement of high- quality and safe transport infrastructure, which is integrated in the common transport system of Eurasia, facilitating the accessibility of the country as a whole as well as national economic growth.552 Priority is given to projects of European interest, Trans-European Transport Network projects (TENT) and cross-border connections.553 The total CF funding available for this priority is 857 million euros.554 • Priority 3.4 ‘Quality Environment for Life and Economic Activity’. The main objective of this priority is to make the country and its regions more attractive, by improving environment, infrastructure and services in the fields of housing, culture and tourism, in order to raise the quality of life and economic activity.555 It aims, for example, at preserving cultural and natural heritage and the development of tourism products. Areas of activity regarding environmental infrastructure include: improving the water management and the supply of clean drinking water; preserving biodiversity; reducing the effects of climate change as well as identifying and eliminating environmental risks.556 The total ERDF funding available for this priority is 322.9 million euros.557 • Priority 3.5 ‘Promotion of Environmental Infrastructure and Environmentally Friendly Energy’. This priority aims at creating environmentally friendly preconditions for development, improving environmental and nature protection and raising energy efficiency.558 For example, it promotes the use of renewable energy sources and attempts to increase energy efficiency both at the supply and the demand side. This priority also attempts to contribute to the reduction of Latvia’s high dependence on primary energy resources from outside the EU.559 The total CF funding available for this priority is 670.6 million euros.560 • Priority 3.6 ‘Polycentric Development’. This territorial priority aims to foster polycentric development in Latvia by promoting the potential of cities and towns as a driving force of regional development. Areas of action are: developing urban territories; making Latvian cities more attractive for investment and work; and developing other centres than

552 Ibid. 553 Ministry of Finance of the Republic of Latvia, Operational programme ‘Infrastructure and Services’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 181. 554 Interview R21. 555 Ibid. 556 Ministry of Finance of the Republic of Latvia, Operational programme ‘Infrastructure and Services’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 201. 557 Interview R21. 558 Ministry of Finance of the Republic of Latvia, National Strategic Reference Framework of Latvia 2007-2013, Riga: Ministry of Finance of the Republic of Latvia 2007. 559 Ministry of Finance of the Republic of Latvia, Operational programme ‘Infrastructure and Services’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 241-242. 560 Interview R21. 300 ECONOMY

Riga until they become strong enough to facilitate regional growth.561 The total ERDF funding available for this priority is 274.5 million euros.562 • Priority 3.7 ‘Technical Assistance for ERDF implementation’. This priority aims to support the efficient and secure management of ERDF co-financed priorities and the overall operational programme.563 Total ERDF funding available for this priority is 57.6 million euros.564 • Priority 3.8 “Technical Assistance for CF Implementation”. This priority aims to support the efficient and secure management of CF co-financed priorities.565 Total CF funding available for this priority is 12.2 million euros.566

The quality of Latvia’s road network is in a poor state as compared to other European countries. Therefore, the asphalting of roads is a primary objective of this operational programme. Regarding the TEN-T network, which is the biggest receiver of funding, 61 kilometres of road has been reconstructed as of 31 December 2011, which is 18.1 % of the 337.59 kilometres of road which is planned to be reconstructed within this programming period.567 Another big TEN-T project is the Rail Baltica, which has to become a 950 kilometre long railway connecting Finland, the Baltic states and Poland. A third area of activity is the improvement of the ‘state category one’ motorway network which mainly regards the asphalting of gravel roads. As of 31 December 2011, 160 kilometres of road has been asphalted within this project, which is 48.6 % of the total planned 330 kilometres.568 However, it is estimated that by 2013, 427 kilometres of roads will be covered by asphalt, exceeding the performance indicator of 330 kilometres. In the period 2000 – 2015, the reconstruction and construction of 1136 kilometres of roads in Latvia is planned using CF and ERDF funding, which clearly is the most significant investment source for the road and bridge construction sector in Latvia.569

7.10.4 The impact of EU funds The opportunities provided by European structural funds have brought significant benefits to the Latvian economy and have had a positive impact on the main macro-economic indicators of the country. Structural funds coming from the EU’s regional policy can be regarded as the

561 Ministry of Finance of the Republic of Latvia, Operational programme ‘Infrastructure and Services’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 250. 562 Interview R21. 563 Ministry of Finance of the Republic of Latvia, Operational programme ‘Infrastructure and Services’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 268. 564 Interview R21. 565 Ministry of Finance of the Republic of Latvia, Operational programme ‘Infrastructure and Services’, Riga: Ministry of Finance of the Republic of Latvia 2007, p. 274. 566 Interview R21. 567 Ibid. 568 Ibid. 569 Ibid. LATVIA AND THE EUROPEAN UNION 301 most important investment source in the period 2007 – 2013.570 As can be seen in Table 7.6, almost 643 million euros were allocated to Latvia in 2010, which accounted for more than 3.5 % of Latvia’s nominal GDP of 18 billion euros in 2010.571 Furthermore, the decline in GDP in 2009, resulting from the economic crisis, would have been 3.7 % deeper without the contribution of EU funds.572 To give an overview of the annual amount of financing per fund and OP, the total financing plan of national operational programmes in Latvia is set out in Table 7.6 below.

Table 7.6: Latvia financing plan with annual amounts for national operational programmes of 2007-2013.573

As shown earlier, support has mainly been directed towards infrastructure, energy and environment, and education and science. However, in order to fight the severe financial crisis that hit Latvia, there has been some re-shifting of funding during the implementation process to areas such as employment, which therefore became a more important aspect of support than originally planned.574 It is likely that EU structural funds are one of the most visible benefits for Latvians from being a member of the EU. In 2010, a public opinion poll conducted by the Ministry of Fi- nance showed that 92.3 % of the Latvian citizens are informed about the availability of EU funds, which clearly is a very high level of awareness.575

570 Ministry of Finance of the Republic of Latvia, ‘In 2007-2013 period one billion lats have been paid from EU funds in Latvia’, retrieved from: http://www.esfondi.lv/events.php?id=496&action=event&category=53&eid=1481, consulted on 6 April 2012. 571 Eurostat, ‘Gross Domestic Product’, retrieved from: http://epp.eurostat.ec.europa.eu, consulted on 6 April 2012. 572 Interview R21. 573 Ministry of Finance of the Republic of Latvia, National Strategic Reference Framework of Latvia 2007-2013, Riga: Ministry of Finance of the Republic of Latvia 2007. 574 Interview R21. 575 Ministry of Finance of the Republic of Latvia, ‘More than 90% of Latvian citizens informed about the EU 302 ECONOMY

7.10.5 Structural funds management Managing and monitoring the efficient allocation and implementation of EU funds is an important and complicated job. In Latvia this is done by the Ministry of Finance and more specifically by the Managing Authority.576 The absorption rate of structural funds can be used as an indicator to assess how successful a country is in managing structural funds. In Figure 7.6 four different indicators (approved projects, contracted amount, payments to final beneficiaries, declared amount) are compared with regard to the state of absorption of the three structural funds in Latvia as of 31 March 2012. The percentage of approved projects and contracted amounts is high in Latvia. With regard to these two indicators Latvia is among the top ab- sorbers in the EU.577 However, in terms of disbursed money to final beneficiaries and money declared to the European Commission, Latvia scores lower and has an average ranking. An explanation for this lower ranking is the interruption of payments from the European Com- mission that Latvia currently faces.578 Due to irregularities and systemic errors in the management system of EU funds, the Eu- ropean Commission decided to temporarily freeze the payments of structural funds to Latvia in January 2012.579 In practice this means that at the moment money is paid to final beneficiaries from the national budget.580 The gathered declarations can only be submitted to the Commission when the interruption is lifted, which explains the lower amount of declared payments at the moment. It has been suggested that the Latvian managing system is quite de- centralised with too many delegated functions, which could be the source of the systemic er- ror.581 The Managing Authority therefore aspires to simplify the management and implementation system to reduce the administrative burden.

funds’, retrieved from: http://www.esfondi.lv/events.php?id=496&action=event&category=53&eid=1352, consulted on 6 April 2012. 576 Interview R21. 577 Ibid. 4.1 578 The Baltic Course, ‘European Commission suspends EU fund payments to Latvia’, retrieved from: http://www.baltic-course.com/eng/baltic_states/?doc=52280, consulted on 1 June 2012. 579 Ibid. 580 Interview R21. 581 Ibid. LATVIA AND THE EUROPEAN UNION 303

4530,0 (100%) 3981,1 (87,9%) Total 3891,1 (85,9%) 2084,4 (46,0%) 1650,5 (36,4%) EU funding

2407,5 (100%) 2072,0 (86,1%) Approved projects ERDF 2009,4 (83,5%) 1064,9 (44,2%) 805,6 (33,5%) Contracted amount 1539,8 (100%) 1337,4 (86,9%) CF 1312,0 (85,2%) Payments to final beneficiaries 650,4 (42,2%) 494,9 (32,1%) Received advance and interim 583,1 (100%) payments from EC (declared 571,7 (98,0%) amount) ESF 569,6 (97,7%) 369,1 (63,3%) 350,2 (60,0%)

0 1000 2000 3000 4000 5000

Figure 7.6: EU funds absorption of 2007 – 2013 planning period by 31.03.2012 in million euros of EU funding (converted from Latvian lats at an exchange rate of 0.7028).582

It can also be noticed in Figure 7.6 that the ESF has a higher absorption rate than the other two funds. This partly stems from the fact that there has been re-shifting of funds towards ESF projects because of the financial crisis, especially to employment programmes. Also, the procurement and implementation procedures of ESF projects are more simplified than ERDF or CF projects on, for example, infrastructure.583

7.10.6 Latvian objections to future regional policy Latvia is not satisfied with the current EU proposals for regional policy for the period 2014 – 2020. The European Commission plans to limit regional policy spending at a rate of 2.5 % of GDP.584 This means that the amount of structural funds which a Member State receives cannot exceed 2.5 % of its GDP. Latvia emphasises that this planned 2.5 % capping rate has an unfair impact on different Member States, especially the Baltic states. It would reduce Lat- via’s share by almost one billion euros — a reduction of almost 20 % regarding the current budget — while Latvia has huge investment needs and feels it needs more money instead of

582 Ibid. 583 Ibid. 584 Ibid. 304 ECONOMY

less.585 Furthermore, Latvia emphasises that the EU regional policy should maintain its original purpose: to reduce the development gap between less developed regions and the rest of the EU, i.e. the regional policy’s first ‘Convergence’ objective.586 Therefore, Latvia wants the first objective’s share of the total budget after 2013 to be at least at the level of the current period. However, for a country the size of Latvia it can be difficult to influence EU policy regarding its position on EU structural funds after 2013. The first priority of Latvia regarding negotiations with the European Commission and other Member States is to increase Latvia’s financial envelope for the period 2014 – 2020 as compared to the current proposals. Despite its small economic and political size, Latvia thinks it has a chance to negotiate a better share of EU funds.587 To accomplish this, Latvia first of all negotiates with the larger net payers among the Member States. They think these net payers will understand Latvia’s needs, appreciate its recent economic performance and most of all feel compassion for Latvia’s situation.588 In addition, Latvia cooperates with the other Bal- tic countries and Hungary who have the same problem with regard to the limit of 2.5 % of GDP. Latvia has issued joint statements with these countries and they jointly sent an official letter from the prime ministerial level to several commissioners, including Budget Commis- sioner Lewandowski.589 It is unfortunate for Latvia that Poland, which could be a useful partner in this endeavour, does not share the same interest, since their share of funds would rise according to these new 2.5 % capping proposals. At the time of writing, Latvia awaits further negotiations but is positive about a good outcome of further negotiations; it believes to have obvious and transparent reasons, and an additional one billion euros for Latvia would not be an excessive burden for the budget.

7.10.7 European territorial cooperation The ERDF also finances cross-border programmes within the framework of the European Territorial Cooperation Objective of the EU’s regional policy. Latvia participates in three cross-border programmes and one trans-national programme. Within these programmes, approximately 90 million euros are allocated to Latvia.590 The cross-border programmes focus on the regions and supplement each other, while the trans-national programme is concentrated at a national level. The Ministry of Environment and Regional Development manages Lat- via’s involvement in these programmes and provides co-financing for the involved Latvian

585 Ibid. 586 Ibid. 587 Ibid. 588 Ibid. 589 Ibid. 590 European Commission, ‘European Cohesion Policy in Latvia’, retrieved from: http://ec.europa.eu/regional_policy/sources/docgener/informat/country2009/lv_en.pdf, consulted on 12 February 2012. LATVIA AND THE EUROPEAN UNION 305 partners.591 Compared to the mainstream structural funds, it appears that the budget for territorial cooperation is limited. However, the added value of these programmes does not lie in the huge investments but rather in the development of regional networks, the sharing of experience and good practice, and joint planning.592 Furthermore, the cross-border programmes can still be regarded as an important regional development instrument attempting to help struggling border regions. Below, the programmes in which Latvia is participating during the current programming period 2007 – 2013 will be described.

Operational programme Estonia-Latvia The first cross-border cooperation programme, between Estonia and Latvia, provides community assistance in various regions along the Estonian-Latvian border for the period 2007 – 2013. The programme has a total budget of around 51 million euros, of which 38 million euros are financed by the ERFD. The main aims of the programme are to promote entrepreneurship, to match the skills of the unemployed with those required in the labour market and to upgrade transport links across the region.593 Furthermore, it has a special focus on local people and communities.594 Despite the generally successful cooperation with Estonia, there have also been cases of competition between Latvia and Estonia regarding some projects. An example of this are projects regarding new tourism products in the border region, where both countries have similar possibilities.

Operational Programme Latvia-Lithuania The second cross-border cooperation programme, between Latvia and Lithuania, provides community assistance in various regions along the Latvian-Lithuanian border for the period 2007 – 2013. The programme has a total budget of around 75.6 million euros, of which 63.9 million euros are financed by the ERFD. The main objective of the programme is to contribute to the sustainable and cohesive development of the border region, which is predominantly agricultural but also includes a part of the Baltic Sea coastline.595 Investment is directed to improving local infrastructure, living conditions, access to public services and management of environmental resources.596

Operational Programme Central Baltic

591 Interview R37. 592 Ibid. 593 Ibid. 594 European Commission, ‘Operational Programme ‘Estonia-Latvia 2007-2013’, retrieved from: http://www.siseministeerium.ee/public/DraftOP_Estonia_Latvia_20112007_Annex1toOP.pdf, consulted on 18 March 2012. 595 European Commission, ‘Latvia-Lithuania Cross Border Cooperation Programme 2007-2013’, retrieved from: http://www.latlit.eu/, consulted on 18 March 2012. 596 Ibid. 306 ECONOMY

The third cross-border programme of the central Baltic region provides community assistance to certain regions of Estonia, Finland, Latvia and Sweden for the period 2007 – 2013. The programme has a total budget of around 136 million euros, of which 102 million euros are funded through the ERFD. The main aim of the programme is to create a globally recognised, dynamic, sustainable and competitive region, which is attractive for business and visitors and where people want to live, work and invest.597 The development of new networks for business and research cooperation is one of the main priorities. There are 75 new joint actions planned, which will be carried out by these new networks in order to enhance competitiveness and cooperation concerning spatial planning and environmental planning.598 The future of this programme for the next programming period is uncertain, as there are discussions going on about the fact that in many areas it overlaps with the Baltic Sea Region Programme, which will be discussed below.599

Baltic Sea Region Programme 2007 – 2013 The Baltic Sea Region (BSR) Programme is a trans-national cooperation programme between Denmark, Estonia, Latvia, Lithuania, Poland, Germany, Finland, Sweden, Belarus, Norway and the Russian Federation for the period 2007 – 2013. The programme has a total budget of 293 million euros, of which 208 million euros come from the ERDF for EU Member State participation, 23 million euros come from the European Neighbourhood and Partnership In- strument (ENPI) for the participation of Belarus and the Russian Federation, and 12 million euros are funded by Norway.600 The overarching strategy of the programme is to strengthen the development towards a sustainable, competitive and territorially integrated Baltic Sea region by connecting development, business and tourism potentials across its borders and resolving issues of common concern for all countries around the Baltic Sea.601 Projects with Latvian partners focus mainly on energy efficiency and innovation, for example transport corridors. Sharing of good practices is also important within this programme. Latvia’s research institutes are advanced in biotechnology and share this good practice with other partners in the programme.602 Concrete results are difficult to define at this moment, because the first project will be finalised this year. 603 In 2009 the Commission officially launched the EU strategy for the Baltic Sea region, to support more intensive cooperation and to support the BSR Programme. However, according to experts in the field, this new strategy was a problem for them, as it changed some priorities in the middle of the programming peri-

597 Ibid. 598 Joint technical secretariat, ‘Central Baltic Interregional Programme 2007-2013’, retrieved from: http://www.centralbaltic.eu/documents/doc_view/4-programme-document-, consulted on 18 March 2012. 599 Interview R37. 600 European Commission, ‘Baltic Sea Region Programme 2007-2013’, retrieved from: http://ec.europa.eu/europeaid/where/neighbourhood/regional-cooperation/enpi-cross- border/documents/baltic_sea_region_adopted_programme.pdf, consulted on 18 March 2012. 601 Ibid. 602 Interview R37. 603 Ibid. LATVIA AND THE EUROPEAN UNION 307 od. Despite the fact that the new strategy is good for visibility, it is regarded to be a burden to the budget as it labels some projects as ‘flagship’ while there is no money to realise such pri- oritisation.604 Within the BSR Programme, Latvia cooperates with Belarus and Russia, in addition to the involved EU partners. According to some, this cooperation can be seen as challenging.605 Cooperation with Russia is troublesome mainly because of different priorities, which makes it hard to develop common projects. There are six large-scale infrastructure projects at the Rus- sian border, which still remain uncertain because they need to be adopted by the European Commission as well.606 The cooperation with Belarus is challenging because Belarus has a time-consuming national approval process, which frequently results in delays or even cancellation of projects.607 Nevertheless, the cooperation with Belarus and Russia is regarded as not politicised and it is said that it does not depend on the political situation of each country.608 The cooperation with the relevant ministries in both countries is even viewed as successful.609

ENPI cross-border programmes Latvia is also involved in two other cross-border programmes coordinated by the ENP and funded by the ENPI. It is difficult to assess the accomplishments of these programmes at this stage, as the first projects have just started. However, it can be said that the interest in projects is huge from all participating countries and the requested amount of funding exceeds the available budget almost three times.610 The competition for funding is high and approximately 300 project proposals have been received.611 The main targets and priorities of the two ENPI cross-border programmes in which Latvia participates are further specified below. The first cross-border programme is the ‘Estonia-Latvia-Russia’ cross-border cooperation programme. This programme has a total budget of around 47 million euros. The programme is focused on the border areas between Russia, Estonia and Latvia. With regard to Latvia it covers the Riga region, Vidzeme region and the Latgale region. The programme primarily addresses the insufficient contact and connections in the border areas between Latvia, Estonia and Russia, as well as missing cooperation for the joint development of the area. Therefore, the strategic objective of this programme is to promote joint development activities for the improvement of the region’s competitiveness by utilising its potential and beneficial location on the crossroads between the EU and the Russian Federation.612

604 Ibid. 605 Ibid. 606 Ibid. 607 Ibid. 608 Ibid. 609 Ibid. 610 Ibid. 611 Ibid. 612 European Neighbourhood and Partnership Instrument, ‘Cross border cooperation programme Estonia-Latvia- Russia’, retrieved from: http://ec.europa.eu/europeaid/where/neighbourhood/regional-cooperation/enpi-cross- border/documents/estonia-latvia-russia_adopted_programme_en.pdf, consulted on 6 April 2012, p. 26. 308 ECONOMY

The second cross-border programme is the ‘Latvia-Lithuania-Belarus’ programme with a total budget of around 41 million euros.613 Regarding Latvia, the programme mainly covers the Latgale region, which borders Belarus. Besides achieving economic and social welfare, the main goals of the programme are to enhance the territorial cohesion of the Latvian, Lithu- anian and Belarusian border region, to secure a high level of environmental protection and to promote intercultural dialogue and cultural diversity.614 Due to differing interests and priorities, Latvia and Estonia have decided not to continue the trilateral ‘Estonia-Latvia-Russia’ programme in the next programming period (2014 – 2020).615 Instead, both countries will develop bilateral programmes with Russia based on their separate needs. The ‘Latvia-Lithuania-Belarus’ programme will presumably be continued during the next programming period.616

7.10.8 Regional disparities in Latvia: the Latgale region The Latgale region is located in the east of Latvia and is one of the country’s four main cultural and historical regions of the country. The Latgale region differs in a number of aspects from other parts of Latvia. This mostly stems from the historical fact that the Latgale region has been part of other empires, which might be explained by Latgale’s separation from the rest of Latvia by three rivers: the Pepedze, the Aikiekste and the Daugava.617 Throughout most of the 17th and 18th century Latgale was part of the Polish empire. Therefore, while most of Latvia is Lutheran, people in the Latgale region are predominantly Catholic.618 The Latgale region also has a different history of written language, resulting from an administrative division of the ethnically Latvian territory in the early 17th century. The Latgale region borders the Russian federation and in 1989, before the newly proclaimed independence, it had more Russian than Latvian inhabitants: 43 % of the population was Russian and only 42 % was Latvian.619 This high proportion of ethnic Russians (the national average is 29 %) poses a special challenge to the region. However, one Latgale-based observer stated that this ethnic diversity is mainly a political problem coming from Riga, rather than a real problem in the Latgalian community.620 The main city of Latgale is Daugavpils, where 51.8 % of the population is Russian, 18 %

613 European Commission – EuropeAid, ‘ENPI Cross-Border Programmes’, retrieved from: http://ec.europa.eu/europeaid/where/neighbourhood/regional-cooperation/enpi-cross- border/programmes/index_en.htm, consulted on 19 March 2012. 614 European Neighbourhood and Partnership Instrument, ‘Cross border cooperation programme Latvia- Lithuania-Belarus’, retrieved from: http://ec.europa.eu/europeaid/where/neighbourhood/regional- cooperation/enpi-cross-border/documents/latvia-lithuania-belarus_adopted_programme_en.pdf, consulted on 6 April 2012, p. 31. 615 Interview R37. 616 Ibid. 617 Research institute of Latgale, ‘Latgale – Latgola’, retrieved from: http://dau.lv/ld/latgale%28english%29.html, consulted on 8 April 2012. 618 Ibid. 619 Ibid. 620 Interview D06. LATVIA AND THE EUROPEAN UNION 309

Latvian and 14.4 % Polish.621 Remarkable is that the numbers of Poles and Latvians in Dau- gavpils are almost equal. These ethnic patterns might help explain why Daugavpils and Latgale as a whole tend to vote differently from the rest of the country. For example, the large number of ethnic Russians might be the reason that a majority of the voters in Latgale opposed EU membership in the referendum on accession in 2003 (see also page 210). Further- more, in the recent proposal to make Russian an official language in Latvia, a majority of people in Latgale voted in favour of the proposal, while in the whole of Latvia 75 % of voters was against it (see also page 71).622

Issues in the Latgale region Latvia is one of the poorest members of the EU, but there are regional disparities within its territory, like in most other Member States. In 2005, in terms of GDP per capita, the Riga region was Latvia’s richest region with a GDP of 76 % of the EU average, while the Latgale region was the poorest with only 20 % of the EU average.623 All regions are struggling with a decline in population, but the Latgale region is finding it even more difficult to retain population, due to out-migration and a negative natural balance.624 Latgale also has severe labour market problems; both short-term and long-term unemployment are very high, while the average wage is the lowest in the whole of Latvia.625 The unemployment rate in Latgale is currently 20 %, while the national unemployment rate is 11.6 %.626 The reasons for this high rate of unemployment in the Latgale region are, among other things, the high concentration of businesses in the capital city, underdeveloped entrepreneurship and poorly developed communication infrastructure.627 In the Latgale region there are only ten economically active enterprises per 1 000 inhabitants, which is less than half of the average of 22 in the whole of Latvia, or 50 in the EU.628 In addition, while the Latgale region contains 16 % of the national population, it only contributes 8.4 % to the na-

621 Central Statistical Bureau of Latvia, ‘Residents population nationalities regions and cities – Daugavpils’, retrieved from: http://data.csb.gov.lv/Dialog/Saveshow.asp; http://data.csb.gov.lv/Dialog/Saveshow.asp; http://data.csb.gov.lv/Dialog/Saveshow.asp, consulted on 8 April 2012. 622 The Christian Science Monitor, ‘Latvia rejects proposal to name Russian an official language’, retrieved from: http://www.csmonitor.com/World/Latest-News-Wires/2012/0219/Latvia-rejects-proposal-to-name-Russian-an- official-language, consulted on 8 April 2012. 623 N. Adams, e.a, Regional Development and Spatial Planning in an Enlarged European Union, Hampshire: Ashgate Publishing Limited 2006, p. 199. 624 Ibid., p. 203. 625 M. Hazans, Unemployment and the Earnings Structure in Latvia (2005), World Bank Policy Research Working Paper 3504, p. 18. 626 Baltic News Network, ‘Unemployment growing in Latvia’, retrieved from: http://bnn- news.com/unemployment-growing-latvia-46863, consulted on 8 April 2012. 627 European Neighbourhood and Partnership Instrument, ‘Cross border cooperation programme Latvia- Lithuania-Belarus’, retrieved from: http://ec.europa.eu/europeaid/where/neighbourhood/regional- cooperation/enpi-cross-border/documents/latvia-lithuania-belarus_adopted_programme_en.pdf, consulted on 6 April 2012, p. 9. 628 European Neighbourhood and Partnership Instrument, ‘Cross border cooperation programme Latvia- Lithuania-Belarus’, retrieved from: http://ec.europa.eu/europeaid/where/neighbourhood/regional- cooperation/enpi-cross-border/documents/latvia-lithuania-belarus_adopted_programme_en.pdf, consulted on 6 April 2012, p. 11. 310 ECONOMY

tional GDP.629 The Latgale region is predominantly agricultural; the agricultural sector is at the base of its economy. Latgale has the most agricultural holdings of all regions by far; over 30 000 out of a total of 83 000 holdings in Latvia are located in Latgale.630 However, the average size of agricultural holdings in the Latgale region is even lower than in the rest of the country, which means there are mostly family farms producing for own consumption. Around 19 000 (or 61.5 %) of these 30 000 agricultural holdings do not produce any agricultural products for sale, but solely for their own consumption.631

Structural funds in Latgale The characteristics of the Latgale region described above will pose a major challenge in terms of Latvia’s future regional development policy. EU structural funds therefore play a significant role in this region. However, the lack of necessary human resources and institutional capacity of local municipalities and businesses in Latgale, who are responsible for preparing and submitting applications for funding, make it difficult to prepare projects and utilise the much needed structural funds.632 This might help explain why the region has the highest amount of unclaimed financing regarding the Latvian Rural Development Programme.633 Furthermore, regions like Latgale feel that they are neglected in the national programming documents and complain about inequitable allocation of structural funds to the disadvantage of the regions.634 Some feel that, regarding structural funds, it is unfair that the whole of Latvia is divided into one NUTS 2 region; in their view Latgale has more right to structural funds than the Riga region.635 The Latgale region would prefer a regionally based policy regarding structural funds, instead of the current allocation by sector. They would like every region to develop its own Operational Programme; in this way projects could be developed according to local needs, which often does not happen.636 Latgale definitely has the most to gain from a proactive, effective regional policy.

Cross-border cooperation The border location of the Latgale region has a strong influence on the region as well. Latgale likes to promote itself as the link between Russia and western Europe and it tends to look to

629 Central Statistical Bureau of Latvia, ‘Gross Domestic Product by statistical region’, retrieved from: http://data.csb.gov.lv/Dialog/Saveshow.asp, consulted on 10 April 2012. 630 Central Statistical Bureau of Latvia, Agricultural Census of Latvia in 2010, Riga: Central Statistical Bureau of Latvia 2011, p. 46. 631 Ibid., p. 46. 632 N. Adams, e.a, Regional Development and Spatial Planning in an Enlarged European Union, Hampshire: Ashgate Publishing Limited 2006, p. 208. 633 Ministry of Agriculture of the Republic of Latvia, Agriculture and Rural Area of Latvia, Riga: Ministry of Agriculture of the Republic of Latvia 2007; interview R61. 634 N. Adams, e.a, Regional Development and Spatial Planning in an Enlarged European Union, Hampshire: Ashgate Publishing Limited 2006, p. 208. 635 Interview D06. 636 Ibid. LATVIA AND THE EUROPEAN UNION 311 the east for opportunities to develop.637 Nevertheless, the political tensions between Russia and Latvia that have dominated during the last two decades have made it difficult to realise this potential. (This topic is discussed further in section 6.3.1.) Furthermore, while the Riga region benefits from increased openness resulting from joining the EU, the Latgale region has experienced less favourable consequences. Latgale’s macro-geographical position shifted with the fall of the Soviet Union, and Daugavpils, which was an important industrial city in the Soviet Union, and Latgale in general collapsed with it.638 The commitment to cross-border cooperation at the EU level and the associated funds for cross-border projects give hope that the benefits and potential coming from Latgale’s border location will increase.639 In addition, if Russia will further open up to the EU and Latvian- Russian relations will improve, the strategic position of the Latgale region is likely to become more valuable. Furthermore, tourism could be an opportunity for the region, as there are over one thousand lakes in Latgale and it has a remarkable landscapes. However, according to experts in the field, tourism is not a sector on which the Latgalian economy can thrive.640 They feel Latgale needs to get back to an industrial base and focus on the modernisation of current production enterprises, and on attracting new investments in real sectors of the economy with the goal of exporting to east and west.641

7.11 Shadow Economy

Latvia has a high level of undeclared employment, reaching 25 to 30 % in some sectors of the economy, which can be very harmful for economic efficiency and government finances.642 A working paper published by the World Bank in 2011 estimated the informal or ‘shadow’ economy of Latvia to be 27.2 % of GDP in 2007. This is a significant proportion, but slightly lower than in Lithuania and Estonia with 29.7 % and 29.5 % respectively.643 In comparison, according to the same working paper, the EU-15 countries have an average informal economy of 17.6 % in the period of 2005-2007.644 However, others estimate Latvia’s shadow economy to be as large as 38 % of GDP.645 A large informal sector is a common phenomenon in the new Member States of the

637 N. Adams, e.a, Regional Development and Spatial Planning in an Enlarged European Union, Hampshire: Ashgate Publishing Limited 2006, p. 204. 638 Ibid., p. 187. 639 Ibid., p. 205. 640 Interview D06. 641 Ibid. 642 Ministry of Finance of the Republic of Latvia, Operational programme ‘Human Resources and Employment’, Riga: Ministry of Finance of the Republic of Latvia 2009, p. 47. 643 K. Fialová, O. Schneider, ‘Labor institutions and their impact on shadow economies in Europe’, The World Bank: policy research working paper 5913, 2011, p. 33. 644 Ibid., p. 7. 645 Interview R31; interview R52. 312 ECONOMY

EU.646 The transition from a state-controlled economy to a market economy introduced new market forces, which have put pressure on the ‘transitional’ economies of many central and eastern European countries, including Latvia.647 This transition and the new competition partly resulted in the downgrading of employment conditions and an accompanying tendency towards labour ‘informalisation’. This is especially noticeable in strongly neo-liberal economies such as Latvia, where the downgrading of employment, which lowers labour costs, happened in the context of the development of a business-friendly environment and thus helped attract more foreign investment.648 There is a high tendency among employers to pay minimum wages to employees and supplement them with so-called ‘envelope wages’.649 This means that employees receive a certain amount of cash every month, which supplements their minimum wage. This amount of cash is not reported as salary and thus not reported to the tax services and no social contributions need to be paid on these amounts. Employers do this instead of raising wages in order to avoid social insurance and tax liabilities.650 The working paper published by the World Bank identifies some policy choices in Latvia that might have contributed to the high level of the informal economy.651 Firstly, Latvia allocates a relative low amount of resources to active labour market policies. Secondly, Latvia is one of the countries with the highest decline in trade union density (more on this topic on page 265). Lastly, Latvia has one of the lowest recorded minimum wages, relative to average wage, in the EU.652 However, these factors are probably not the most decisive factors; Lat- via’s history of occupation is. During 50 years of occupation, Latvians where not able to trust their government and therefore behaviour like tax evasion and trying not to cooperate with the government were a positive thing.653 This culture of not trusting the government or the authorities is a deep- rooted problem in many post-Communist countries in central and eastern Europe, and also in Latvia. Even after 20 years of renewed independence it is still hard for many Latvians to trust the authorities. According to one expert, there are three main reasons for the high amount of envelope wages in Latvia. Firstly, there is a low tax moral because citizens do not believe that the government will use the money wisely.654 Secondly, due to the post-Soviet heritage, as

646 K. Fialová, O. Schneider, ‘Labor institutions and their impact on shadow economies in Europe’, The World Bank: policy research working paper 5913, 2011, p. 3. 647 Ibid., pp. 9-10. 648 C. Woolfson, ‘Labour standards and migration in the new Europe: Post-Communist legacies and perspectives’, European Journal of Industrial Relations 2, 2007, p. 202. 649 Ibid., p. 202; interview R14; interview R19; interview R31; interview R52; interview R64. 650 C. Woolfson, ‘Labour standards and migration in the new Europe: Post-Communist legacies and perspectives’, European Journal of Industrial Relations 2, 2007, p. 202. 651 K. Fialová, O. Schneider, ‘Labor institutions and their impact on shadow economies in Europe’, The World Bank: policy research working paper 5913, 2011. 652 Ibid., 2011. 653 Interview R14; interview R31. 654 Interview R14. LATVIA AND THE EUROPEAN UNION 313 stated above, it became normal to cheat the state and to not pay taxes.655 Thirdly, in the case of non-citizens, they are unsatisfied with their position and are not eager to pay taxes to the government who does not grant them citizenship.656 Undeclared work and the shadow economy are complex issues and therefore not easy to solve. However, one solution to the problem could be economic growth. As wages and prosperity will rise, people might become less tempted to use envelope wages. Social partners are pushing for lower taxes in order to further decrease this temptation.657 In addition, people need to be stimulated to engage themselves in the formal economy.658 The quality of government needs to be improved and institutions of state control need to be strengthened. The trust of the people in state institutions and in proper usage of the budget needs to be re- established.659 Finally, more ethno-friendly politics could contribute to the reducing of Lat- via’s shadow economy, as this would presumably reduce envelope wages among non- citizens.660

7.12 Conclusion

After severe fiscal consolidation, and with the help of international financial support, Latvia’s economy seems to have recovered from the crisis: GDP is growing, unemployment is declining, and public finances seem to be returning to levels within the Maastricht criteria. Officials are optimistic about meeting the 2014 deadline to introduce the euro, although especially high inflation remains an obstacle on the road towards Eurozone accession. While Latvia’s economic reliance on services (trade in particular) makes it vulnerable to fluctuations in the global market, it also provides rapid growth opportunities. Perhaps the largest growth potential is found in the forestry sector, which so far is mostly based on raw exports. Value-adding technologies for both manufacturing and green energy purposes would introduce significant opportunities, not least to solidify Latvia’s position as a green energy leader. EU structural funds are being employed to help advance this process and to modernise the agricultural sector, but the current proposals for both structural funds and CAP financing are highly disadvantageous for Latvia. A strong political push must be made in Brussels to ensure these growth potentials are not undermined by a lack of EU funding after 2013. The crisis has provided an opportunity to extensively reform Latvia’s labour market and its social security system. However, the weak position of trade unions and the relatively low level of organisation among employers are obstacles for deep social dialogue. Combined with a post-Soviet heritage of ‘cheating the system’, these factors lead to a large shadow economy

655 Ibid. 656 Ibid. 657 Interview R31; interview R52. 658 Interview R14. 659 Ibid. 660 Ibid. 314 ECONOMY

and hazardous labour conditions, among others. A more inclusive and representative social dialogue is required to help formulate Latvia’s socioeconomic policies for the 21st century, especially considering the demographic challenges of a shrinking and aging population. Most pressingly, we conclude that Latvia lacks a comprehensive long-term vision on how it can attain Western levels of prosperity and development. While the significant influx of EU funds has necessitated the formulation of strategic macroeconomic policy priorities, this way of thinking does not (yet) seem to have permeated all levels of economic governance. None- theless, some crucial opportunities for long-term development can be identified; the most notable are investing in human capital and infrastructure, the development of value-adding technology, and the green energy sector.

LATVIA AND THE EUROPEAN UNION 315

8. Public life

8.1 Introduction

Latvia’s society is heavily marked by its history; especially the recent Soviet communist period has played a major role in shaping today’s society. More specific, the role the Russian- speaking minority and the Russian language play is deeply intertwined with Latvian day-today life. This role has led to a heated political debate, with far reaching consequences with regards to the educational and health care systems, which is thoroughly covered by the media. As in every other country in the world, the media in Latvia plays an important role in discourse shaping within the society. Many of the challenges the Latvian media faces today, such as freedom of speech, ownership and independence of the media, stem from the transition from a state controlled to a democratic media landscape. Additionally, the Soviet occupation of Latvia has led to a clear division between media in the Latvian and Russian languages. The political and cultural tensions between the ethnic Latvians and the Russian-speaking minority appear to have found their way to the educational system as well, when a new language system was introduced in the second half of the 1990s, which limited the usage of languages other than Latvian. Furthermore, the educational structure is characterised by a complicated set-up, where no fewer than six ministries have a say in the matters on education. A similar set-up can be found within Latvia’s health care system, where several ministries work together. Here, however, there are clear agreements on the division of the work, where the majority of Latvia’s health care is provided by the Ministry of Health. This chapter will focus solely on the health care that is provided through the Ministry of Health, as this is the main source of health care. The Ministry of Health not only provides health care, but is also responsible for the Lat- vian public health. Whereas the health care entails the provided services to cure diseases, public health focuses on the health status of the Latvian population. As both parts have been influenced by Latvia’s communist past, several reforms have been made since regaining independence, further incited by the economic crisis. These parts of Latvian society are currently still in a transition period, trying to work within the regained democracy, as well as within new outlines set by the EU.

8.2 Education

Latvia has a complicated educational structure, which stems from two different factors. First, there is the institutional aspect. For example, no fewer than six ministries have a say in the matters on education, with some having less influence than others.1 Second, there is the cul-

1 OECD, ‘Funding Systems and their Effects on Higher Education System’, retrieved from: 316 PUBLIC LIFE

tural aspect. It seems that some political and cultural tensions have found their way to the surface within the educational system, when a new language system was introduced in the second half of the 1990s.2 These two topics will be dealt with extensively here, but in order to complete the picture of Latvia, background information on Latvia’s educational system is essential.

8.2.1 General characteristics Education in Latvia is compulsory from the age of 5 to 16.3 However, 5- to 7-year-old children are only obliged to participate in pre-school programmes such as those provided by kindergartens. When a child turns 7 it will follow a ‘single structure basic education’, comparable to primary and lower secondary education according to the International Standard Classi- fication of Education (ISCED).4 Secondary education is accessible for those students who have passed the compulsory years of education. However, secondary schools are free to hold entry exams, except in those areas in which the students have already received a certificate from their institution of primary education.5 From there on, students have different options for their future education, depending on their grades and personal ambitions. Secondary education schools offer four different types of education, each emphasising a different subject. The educational programs are:6

- comprehensive education; - the humanities and social sciences programme; - the mathematics, natural science and technical science programme; - the vocational programme.

These programmes are offered at every secondary educational institute. For all of these programmes, seven subjects are compulsory: Latvian language and literature, mathematics, history, one foreign language, sports, basic information science and basic economics.7 Although there is no data on what foreign language is most popular among Latvian pu-

http://www.oecd.org/dataoecd/20/40/38308028.pdf, consulted on 6 February 2012. 2 Ministry of Foreign Affairs of the Republic of Latvia, ‘Changes in the educational content and students’ exam performance’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/4643/changes/, consulted on 6 Febru- ary 2012. 3 Ministry of Education and Science Republic of Latvia, ‘The education system in Latvia’, retrieved from: http://izm.izm.gov.lv/upload_file/en/education_system.pdf, consulted on 4 February 2012. 4 Unesco, ‘International Standard Classification of Education’, retrieved from: http://www.unesco.org/education/information/nfsunesco/doc/isced_1997.htm, consulted on 17 April 2012. 5 Ministry of Education and Science, Republic of Latvia, ‘the education system in Latvia’, retrieved from: http://www.li.lv/index.php?Itemid=1106&id=74&option=com_content&task=view, consulted in 6 February 2012. 6 Ibid. 7 The Latvian Institute, retrieved from: http://www.li.lv/index.php?Itemid=1106&id=74&option=com_content, consulted on 13 February 2012. LATVIA AND THE EUROPEAN UNION 317 pils, the most commonly spoken foreign languages are English, Russian and German.8 How- ever, English seems to be the most popular language course among adults who participate in adult education.9 Similar to the structure in the Netherlands, it is possible for students to obtain a higher secondary education degree after having completed education at a lower level.10 After obtaining a degree at an institution of primary education, about 62 % of Latvian students go on to obtain a secondary degree, 32 % continued in vocational training and a little over 4.5 % quit formal education.11 Of those who continue at an institution of secondary education, 75 % continued their studies at an institute of higher education or college, while less than 3 % entered a vocational school and over 22 % discontinued their formal education.12

8.2.2 Universities There are 34 accredited institutions of higher education in Latvia, five of which are universities.13 Three of these universities can be found in Riga: The University of Latvia, Riga Tech- nical University and Riga Stradins University. Only the first one will be discussed here, as it is the largest and most important university in the country. The two universities outside Riga can be found in Daugavpils and Jelgava.14

University of Latvia The oldest university in the country is the University of Latvia, founded on 28 September 1919.15 The basis for the university was already laid down in 1861, when the Riga Polytech- nicum was founded.16 The University of Latvia is also the largest university in the country17 and one of the largest of the Baltic States.18 The idea of establishing a Latvian university was put forward in the 19th century by social and cultural activists ‘calling upon the Latvian peo-

8 Ibid. 9 Interview R40. 10 Ministry of Education and Science, ‘The Education System of Latvia’, retrieved from: http://izm.izm.gov.lv/education.html, consulted on 2 February 2012. 11 Eurydice, ‘Organisation of the Education System in Latvia’, retrieved from: http://eacea.ec.europa.eu/education/eurydice/documents/eurybase/eurybase_full_reports/LV_EN.pdf, consulted on 14 February 2012. 12 Ibid. 13 Wikipedia, ‘List of universities in Latvia’, retrieved from: http://en.wikipedia.org/wiki/List_of_universities_in_Latvia, consulted on 14 May 2012. 14 European Commission, ‘Research and Innovation’, retrieved from: http://ec.europa.eu/research/headlines/news/article_05_07_11_en.html, consulted from 13 April 2012. 15 University of Latvia, ‘History’, retrieved from: http://www.lu.lv/eng/general/about-university-of- latvia/history/, consulted on 2 April 2012. 16 Eurydice, ‘Organisation of the Education System in Latvia’, retrieved from: http://eacea.ec.europa.eu/education/eurydice/documents/eurybase/eurybase_full_reports/LV_EN.pdf, consulted on 14 February 2012. 17 University of Latvia, ‘About’, retrieved from: http://www.lu.lv/eng/general/about-university-of-latvia/about/, consulted on 2 April 2012. 18 OECD, ‘Funding Systems and their Effects on Higher Education System’, retrieved from: http://www.oecd.org/dataoecd/20/40/38308028.pdf, consulted on 6 February 2012. 318 PUBLIC LIFE

ple to strive for knowledge and aspire to qualitative education’.19 When Latvia became independent in 1918, it was considered vital to the survival of the Latvian state that it had well- educated citizens.20 Interestingly, the university’s website states that the introduction of Latvian as the language of instruction had little influence on the nationalities or backgrounds of its students.21 It is also interesting to note that the university’s mission includes ‘development and promotion of higher human values as well as their transfer to future generations, respecting the national language, culture, peculiarities and needs of the development of Latvia’.22 These phrases give us a little insight in the peculiarities of the Latvians when it comes to ‘defending’ their language and culture, especially from the Russian minority. During the years of Soviet occupation, the Latvian school system was strictly controlled by the communist regime and ‘education was aimed at glorifying the Soviet Union’ but, ‘in Latvia [a] part of [the] schools still managed to provide more or less nationally-oriented education in schools with Latvian language of instruction’.23 One of the schools which provided nationally-oriented education was the University of Latvia, which refused to stop teaching against Soviet ideologies.24 Currently, the University of Latvia offers over 150 different educational programmes and most of its research is done in the fields of humanities, sciences, social sciences, and education sciences.25 The University can be considered to have an international outlook and attrac- tion on foreign students. Each year about 300 Latvian students take part in several international student exchange programmes, such as the EU’s Erasmus project, while about 250 international students study one or more semesters at the Latvian university. Since 2003 the University has a Jean Monnet Chair, held by Dr. Tatjana Muravska, Professor in European Economic Integration. The university also offers European Studies as a Master’s programme, which is completely taught in English26 and was accredited for the first time in 2003.27

19 University of Latvia, ‘History’, retrieved from: http://www.lu.lv/eng/general/about-university-of- latvia/history/, consulted on 2 April 2012. 20 Ibid. 21 Ibid. 22 Ibid. 23 Eurydice, ‘Organisation of the Education System in Latvia’, retrieved from: http://eacea.ec.europa.eu/education/eurydice/documents/eurybase/eurybase_full_reports/LV_EN.pdf, consulted on 14 February 2012. 24 University of Latvia, ‘History’, retrieved from: http://www.lu.lv/eng/general/about-university-of- latvia/history/, consulted on 2 April 2012. 25 University of Latvia, ‘About’, retrieved from: http://www.lu.lv/eng/general/about-university-of-latvia/about/, consulted on 2 April 2012. 26 University of Latvia, ‘Studies’, retrieved from: http://www.lu.lv/eng/general/about-university-of- latvia/studies/, consulted on 2 April 2012. 27 University of Latvia, ‘Master’s degree programme EUROPEAN STUDIES’, retrieved from: http://www.lu.lv/eng/istudents/degree/study/autumn-2011-academic-year-20112012/master-european/, consulted on 2 April 2012. LATVIA AND THE EUROPEAN UNION 319

The University of Latvia and the EU The University of Latvia is a recipient of European structural funds and it has used these funds in order to modernise its equipment and to ‘aid the competitiveness of the achievements of our scientists among the global scientific community’.28 Although the university’s website states that ‘the Institute of Solid State Physics is a European Union 6th Framework Pro- gramme Centre of Excellence’,29 Latvia is one of the three countries which invests the least (expenditure as % of GDP) in the area of research and development (0.39 %), together with Cyprus and Slovakia (0.33 % and 0.57 % respectively).30 However, these numbers are from 2005, and more recent statistics show that Latvia is working on improving these numbers, although the recent financial crisis has made it difficult to reach set targets.31

Daugavpils University The University of Daugavpils is the second university in Latvia in terms of date of foundation.32 The university was founded in 1921 and is the only university in eastern-Latvia.33 Daugavpils University has five faculties and about 3200 students, but despite its relatively small size it closely cooperates with 66 partners in 19 countries and participates in the Euro- pean Union Erasmus Programme.34 In the Netherlands, it cooperates with Groningen Univer- sity,35 and due to its proximity to the Belarusian border it is closely tied to several Universi- ties there.36 Interestingly, although the Latvian language can be taken as a course at the University, the website only makes mention of offering Russian language courses to its foreign students.37

Jelgava University (Latvia University of Agriculture) As the name suggests, the University of Jelgava is an agricultural university, specialising in ‘agriculture, veterinary medicine, food technology, engineering, forestry science, social sci-

28 University of Latvia, ‘Research’, retrieved from: http://www.lu.lv/eng/general/about-university-of- latvia/research/, consulted on 2 April 2012. 29 Ibid. 30 European Commission, ‘Research and Innovation’, retrieved from: http://ec.europa.eu/research/headlines/news/article_05_07_11_en.html, consulted on 13 April 2012. 31 European Commission, ‘Country Profile Latvia’, retrieved from: http://ec.europa.eu/research/innovation- union/pdf/competitiveness-report/2011/countries/latvia.pdf, consulted on 13 April 2012. 32 Daugavpils University, ‘General Information’, retrieved from: http://du.lv/en/about_university/general_information, consulted on 13 April 2012. 33 Ibid. 34 Ibid. 35 Daugavpils University, ‘Partners’, retrieved from: http://du.lv/en/partners consulted on 13 April 2012. 36 Daugavpils University, ‘About Daugavpils’, retrieved from: http://du.lv/en/international_students/about_daugavpils, consulted on 13 April 2012. 37 Daugavpils University, ‘Language in Daugavpils’, retrieved from: http://du.lv/en/international_students/Practica_Information_For_Students/LANGUAGE, consulted in 13 April 2012. 320 PUBLIC LIFE

ence, information technologies and environment management sectors’.38 The University was founded in 1939, after it was decided that the Faculty of Agriculture should move from the University of Latvia in Riga to Jelgava in 1936.39 In July 1944, the University was burnt down during the Nazi regime, only to reopen again as a faculty at the University of Latvia, until 1957. (For more information on the Nazi occupation of Latvia, see section 3.8.) As of 1964, all of the 9 faculties of the University of Jelgava can be found in Jelgava.40 The University has about 6000 students and offers 79 programmes,41 11 of which are taught in English.42 The university also heavily focuses on international cooperation, through EU programmes as well as other programmes.43 The most popular destinations for Latvian students at the University of Agriculture who want to study abroad are the Netherlands (Wa- geningen University), Germany and Finland.44

8.2.3 Adult education Adult education is important because it supports ‘personal development and competitiveness in the labour market regardless of person’s age and previous education’.45 The aforementioned Education Law of 1998 specifically deals with the establishment of adult education,46 and the EU’s Grundtvig programme acts as a guideline.47Adult education includes all types of education, including work-related and interest training,48 but mostly focuses on acquiring professional skills.49 In the school year 2006-2007, over 290 000 Latvians were recipients of adult education, of whom nearly one quarter received support from their employer in order to help cover the costs of the education.50 However, the largest number of participants in adult education are unemployed Latvians; ‘[e]mployment authorities provide a wide range of labour market training mainly targeted at unemployed adults. The courses are free of charge to

38 Latvia University of Agriculture, ‘Mission & Vision’, retrieved from: http://eng.llu.lv/?mi=559, consulted on 14 April 2012. 39 Latvia University of Agriculture, ‘History of the University’, retrieved from: http://eng.llu.lv/?mi=577, consulted on 14 April 2012. 40 Latvia University of Agriculture, ‘Facts & Figures’, retrieved from: http://eng.llu.lv/?mi=558, consulted on 14 April 2012. 41 Latvia University of Agriculture, ‘Studies for International Students’, retrieved from: http://eng.llu.lv/?mi=599, consulted on 14 April 2012. 42 Latvia University of Agriculture, ‘Opportunities for Modern University Studies’, retrieved from: http://eng.llu.lv/?mi=520, consulted on 14 April 2012. 43 Latvia University of Agriculture, ‘Cultural’, retrieved from: http://eng.llu.lv/?mi=530, consulted on 14 April 2012. 44 Ibid. 45 Ministry of Education and Science, ‘The Education System of Latvia’, retrieved from: http://izm.izm.gov.lv/education.html, consulted on 2 February 2012. 46 Euro Guidance, ‘Latvia: System of Education’, retrieved from: http://viaa.gov.lv/files/news/1808/educ_in_latvia.pdf , consulted on 15 May 2012. 47 Interview R40. 48 Ministry of Education and Science, ‘The Education System of Latvia’, retrieved from: http://izm.izm.gov.lv/education.html, consulted on 2 February 2012. 49 Euro Guidance, ‘Latvia: System of Education’, retrieved from: http://viaa.gov.lv/files/news/1808/educ_in_latvia.pdf , consulted on 15 May 2012. 50 Ibid. LATVIA AND THE EUROPEAN UNION 321 persons who qualify for official unemployment status.’51 The most important NGO that focuses on providing adult education in Latvia is the Lat- vian Adult Education Association (LAEA). The LAEA was established in 1993 and acts as an umbrella organisation for all other adult education associations in Latvia and has 57 member organisations.52 Its main aims include facilitating the development of adult education, participating in life-long learning policy development, and promoting the establishment of a civic and open society.53 As with other forms of education, the LAEA’s budget is provided for by six Latvian ministries – Welfare, Education & Science, Economics, Culture and Agriculture – and only a small percentage of their budget comes from (membership) fees.54 In 2010, the Latvian government provided the LAEA with 9.9 million lats (approximately 14 million euros), which was mainly spent on providing educational programmes.55 The most popular courses for adults to participate in are English and Information Tech- nology (IT), which are helpful skills when looking for a job abroad. This may explain why the crisis did not have a major impact on the number of applicants at the LAEA.56 However, the percentage of Latvians taking part in adult education is below that of the EU average (five per cent in Latvia versus nine per cent in the EU respectively), but the NGO’s aim is to reach 15% of the population by 2020.57 It has been suggested that in order to achieve this aim, better government funding is needed.58

8.2.4 Financing education The main foundations for the funding of education are laid down in the Law on Institutions of Higher Education (LIHE, 2005) and the Education Law (1998), although several amendments have been made to these documents.59 Decision-making on education takes place on three levels: national, municipal and institutional. At the national level, the main bodies comprise of the parliament, the Ministry of Education and Science, and the Cabinet of Ministers.60 In Latvia, primary and secondary education is state-sponsored and therefore free of charge for students.61 In addition, the Higher Education Council allocates a certain number of state-financed study places in each field of studies. The state finances only those students with

51 Ibid. 52 Interview R40. 53 Ibid. 54 Ibid. 55 Ibid. 56 Ibid. 57 Ibid. 58 Ibid. 59 OECD, ‘Funding Systems and their Effects on Higher Education System’, retrieved from: http://www.oecd.org/dataoecd/20/40/38308028.pdf, consulted on 6 February 2012. 60 Ministry of Education and Science, ‘The Education System of Latvia’, retrieved from: http://izm.izm.gov.lv/education.html, consulted on 2 February 2012. 61 Ministry of Education and Science, Republic of Latvia, ‘the education system in Latvia’, retrieved from: http://www.li.lv/index.php?Itemid=1106&id=74&option=com_content&task=view, consulted in 6 February 2012. 322 PUBLIC LIFE

the highest average marks, or those who are students within ‘priority fields’, such as Arts and Natural Sciences, in order to stimulate students to choose these subjects.62 The students whose marks are not sufficiently high to grant them state-supported education will be fee-paying students. It is possible for grant-receiving student to lose their state-financed support when grades fall below the threshold for eligibility.63 For school year 2005-2006, the number of fee- paying students accounted for 77 % of all students.64 Fees are charged at all private higher education institutions.65 Tuition is relatively costly in Latvia, at 23% to 70% of the average yearly wage.66 Tuition was set at 700 to 5811 euros for the school year 2007-2008 for Latvian students and depends on the type of education received. Foreign students may have to pay up to 5000 euros per year.67 The main ways in which higher education in Latvia is funded are:68

• State budget funding. Although this accounts for the smallest amount of funds received by institutions of higher education, it amounted to 9,9 million lats (a little over 14 million euros) in 2012;69 • Tuition fee revenues; • Funding from the EU structural funds.

Schools may also receive additional financing from donations or service offers.70 What is interesting about the Latvian way of funding its education, is that it is channelled through six ministries: Education and Science, Agriculture, Health, Interior, Defence and Cul- ture.71 This characteristic has advantages and disadvantages. Advantages include that individual ministries can influence the implementation process of education programmes and higher education institutions can receive additional funding from each of the six ministries. A disadvantage is the fragmentation of resources, which makes it difficult to monitor the exact flow of funds. This leads to the conclusion that ‘there is [a] lack of unified document[s] describing

62 Interview R27; OECD, ‘Funding Systems and their Effects on Higher Education System’, retrieved from: http://www.oecd.org/dataoecd/20/40/38308028.pdf, consulted on 6 February 2012. 63 Interview R27. 64 OECD, ‘Funding Systems and their Effects on Higher Education System’, retrieved from: http://www.oecd.org/dataoecd/20/40/38308028.pdf, consulted on 6 February 2012. 65 The Latvian Institute, retrieved from: http://www.li.lv/index.php?Itemid=1106&id=74&option=com_content&task=view, consulted on 13 February 2012. 66 OECD, ‘Funding Systems and their Effects on Higher Education System’, retrieved from: http://www.oecd.org/dataoecd/20/40/38308028.pdf, consulted on 6 February 2012. 67 CESIFO group, ‘Tuition Fees in Europe 2007/2008’, retrieved from: http://www.cesifo- group.de/portal/pls/portal/docs/1/1193154.PDF, consulted on 19 February 2012. 68 OECD, ‘Funding Systems and their Effects on Higher Education System’, retrieved from: http://www.oecd.org/dataoecd/20/40/38308028.pdf, consulted on 6 February 2012. 69 Ibid.; interview R40. 70 Eurydice, ‘Organisation of the Education System in Latvia’,retrieved from: http://eacea.ec.europa.eu/education/eurydice/documents/eurybase/eurybase_full_reports/LV_EN.pdf, consulted on 16 April, 2012. 71 OECD, ‘Funding Systems and their Effects on Higher Education System’, retrieved from: http://www.oecd.org/dataoecd/20/40/38308028.pdf, consulted on 6 February 2012. LATVIA AND THE EUROPEAN UNION 323 the funding strategy of higher education in Latvia’.72

Future issues and developments The future of Latvia’s higher education depends largely on how it will be able to tackle problems which are likely to arise in the near future.73 One of the problems Latvia will have to face is related to its funding mechanism. As discussed above, the funding of higher education in Latvia is not very transparent. It has been suggested that an improvement in the allocation of funds is necessary and that one way to achieve this would be to channel most resources through the Ministry of Education.74 Another future challenge for Latvian education stems from the demographic challenges Latvia faces (see also section 2.3.7 on page 13). Due to a declining birth-rate, it can be expected that universities will attract fewer students, thus losing income from tuition fees. It has been suggested that the state should become more creative in finding solutions by focusing more on the opportunities that adult education has to offer.75 Perhaps the Latvian government could also rethink its method of allocating grants to students. As research has shown, 33 % of respondents believed family income should be the main basis on which grants should be handed out.76 It has been suggested that people might favour a more balanced distribution of funds,77 based partly on grades and partly on family income, to improve chances for more mediocre students from underprivileged backgrounds.78 The Latvian government is not unaware of these problems and has taken it upon itself to tackle these issues. For example, the government signed a National Development Plan in 2006, aimed at ‘education and knowledge for the growth of economics and technological distinction’.79 It has also approved a policy paper entitled ‘Basic Guidelines of Lifelong Learning Policy for 2007-2013’, which was drafted in accordance with European guidelines.80 Moreo- ver, it has reduced educational bureaucracy, changed requirements for pupils and teachers, and made amendments to the method of obtaining an educational license.81

8.2.5 Teachers’ salaries Although there is no data to be found on the exact spending pattern of the Latvian government

72 Ibid. 73 Ibid. 74 Interview R40. 75 Ibid. 76 OECD, ‘Funding Systems and their Effects on Higher Education System’, retrieved from: http://www.oecd.org/dataoecd/20/40/38308028.pdf, consulted on 6 February 2012. 77 Interview R40. 78 Interview R27. 79 Eurydice, ‘Organisation of the Education System in Latvia’, retrieved from: http://eacea.ec.europa.eu/education/eurydice/documents/eurybase/eurybase_full_reports/LV_EN.pdf, consulted on 16 April, 2012. 80 Ibid. 81 Ibid. 324 PUBLIC LIFE

on public schools, it can be assumed, based on Table 8.1, that only a small portion of the budget goes to teachers’ salaries. The numbers are based on information collected by the Eu- rydice Network, which ‘provides information on and analyses of European education systems and policies’ and was established by the European Commission.82 For comparison purposes, teachers’ salaries in Estonia, Lithuania and the Netherlands are also included in the table.

Lower se- Upper se- Pre-primary Primary condary condary Latvia 4 889 6207 7 057 8 757 Average salary Estonia 9 607 9607 9 607 9 607 Average salary Lithuania 4 275 - 7 850 3 457 - 6 375 3 457 - 6.375 3 457 - 6 375 Min./max. The Netherlands* N/A 32 648 - 48 097 34 440 - 61 054 34 580 - 69 440 Min./max.

Table 8.1: Annual gross salaries of full time fully qualified teachers in public schools in euros in 2009/2010, as calculated by Eurydice.83 (*Due to the differences in the educational system, the numbers are an approximation.)

As can be seen in Table 8.1, the Latvian teachers’ salaries are well below those of Estonia and the Netherlands. Although the Latvian and Lithuanian teachers’ salaries are comparable in the lower scales, it can be deducted from these numbers that an experienced Lithuanian teacher will soon earn more than his or her Latvian colleague. However, it is important to note that teachers’ salaries have undergone severe cuts as part of the rescue package offered by the EU and the IMF: teachers’ wages were cut by up to 50 % in 2009.84 Despite these heavy cuts, teachers prided themselves on accepting these cuts as a necessary part of overcoming the crisis, unlike in Greece.85 The severe cuts in public spending as part of the rescue package are covered more extensively on page 254.

8.2.6 Minorities and education Reform in education In 1995, the Latvian government stated that the Latvian language skills of minority citizens

82 Eurydice, retrieved from: http://eacea.ec.europa.eu/education/eurydice/index_en.php, consulted on 20 March 2012. 83 Eurydice, ‘Teacher’s Salaries and School Heads’ Salaries and Allowanced in Europe, 2009/10’, retrieved from: http://eacea.ec.europa.eu/education/eurydice/documents/tools/salaries.pdf, consulted on 28 April 2012. 84 EIROnline, ‘Wide-scale cuts in salaries and social benefits’, retrieved from: http://www.eurofound.europa.eu/eiro/2009/07/articles/lv0907019i.htm, consulted on 2 May 2012. 85 Interview R31. LATVIA AND THE EUROPEAN UNION 325 were insufficient. In that year, it was decided that at least two subjects have to be taught in Latvian at the upper primary level (which corresponds with grades 5-9) and three subjects at the secondary level (grades 10-12).86 In the same year, the Latvian government established a new ‘support structure’ for minority schools, of which there are 224,87 called the ‘National Programme for Latvian Language Training’ (NPLLT). The NPLLT entails a 10-year strategy to strengthen Latvian teaching methodology. However, ‘[g]iven the unsatisfactory pace of change in [minority] schools, Parliament continued the reform and in 1998 adopted a new education law.’88 The new law envisaged the introduction of various models of bilingual education in primary schools as of 1999. The law was gradually introduced, until 60 % of subjects were taught in Latvian, and the other 40 % in minority languages.89 Five years after the law was implemented, ‘the law foresaw increasing the percentage of instruction in Latvian/bilingually in state-funded secondary education (grades 10-12) to 60 [%]starting in September 2004’.90 According to a government website, the reform has already had fruitful effects on the level of Latvian spoken by minorities in Latvia. According to the official numbers, 49 % of adolescents from national minorities rated their knowledge of Latvian as ‘good’ in 1996, which has increased to 73 % in 2012.91 Moreover, the exam performances on Latvian and Literature have improved significantly in 5 years.92

Opposition to the reform In general, opposition to the reform can be said to be divided among ethnic lines. Many of those who disagreed, mostly the Russian-speaking Latvians, opposed the reform because they considered it discriminatory. The other part of the opposition was formed mostly by ethnic Latvians, who opposed the reform on practical grounds or concerns. For example, how was the law to be enforced? What happens to the quality of teaching if a course is suddenly given in another language, which the students might not master perfectly? A serious concern was that ‘not all children are that talented [to be able to learn in another language], which means

86 Ministry of Foreign Affairs of the Republic of Latvia, ‘Changes in the educational content and students’ exam performance’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/4643/changes/, consulted on 6 Febru- ary 2012. 87 Eurydice, ‘Organisation of the Education System in Latvia’,retrieved from: http://eacea.ec.europa.eu/education/eurydice/documents/eurybase/eurybase_full_reports/LV_EN.pdf, consulted on 16 April 2012. 88 Ministry of Foreign Affairs of the Republic of Latvia, ‘From Segregation to Integration’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/FromSegregationToIntegration/, consulted on 30 March 2012. 89 European Voice, ‘Latvian education reforms set to spark start of term walkout’, retrieved from: http://www.europeanvoice.com/article/imported/latvian-education-reforms-set-to-spark-start-of-term- walkout/50481.aspx, consulted on 30 March 2012. 90 Ibid. 91 Ministry of Foreign Affairs of the Republic of Latvia, ‘Changes in the educational content and students’ exam performance’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/4643/changes/, consulted on 6 Febru- ary 2012. 92 Ibid. 326 PUBLIC LIFE

that their results will get worse.’93 Of course, there are also those who support the reform, for example on the basis of language preservation.94 It has been suggested that many Russian-speakers refused to learn the Latvian language and that it is a matter of principle that those who live in Latvia should also speak Latvian.95 According to some, the debate on the reform and the quality of education has turned into a political debate, focusing on ethnicity instead.96 Former Latvian Minister of In- tegration, Nils Muiznieks - who has also worked for several human rights organisations and is now a Human Rights Commissioner for the EU - approves of the reform, because after the collapse of the Soviet Union, Latvia was left with a severely segregated system of education in which Russians went to Russian schools and Latvians went to Latvian schools. When Lat- via gained independence, Russian schools still taught in Russian and the students left school speaking little to no Latvian, thus further segregating society.97

International controversy surrounding the reform The reform on minority education was also met with disapproval from Moscow and to a lesser extent from the European Union; the EU first considered the reform an internal matter, outside of its scope of influence. However, after several Latvian MEPs raised concerns, the matter was taken up in the European Parliament.98 Subsequently, the European Commission stated that the reform did not breach any international minority rights.99 Disapproval from Mos- cow mainly stemmed from their belief that the reform was inherently discriminatory.100 However, the office of the OSCE High Commissioner on National Minorities has af- firmed that ‘the [...] solution is in line with minority rights standards and asserted that the reform is painful, but necessary.’ Moreover, commenting on a similar situation in Estonia, the Council of Europe's Advisory Committee on the Framework Convention for the Protection of National Minorities concluded that the 60/40 model is basically in line with the convention.101

93 European Voice, ‘Latvian education reforms set to spark start of term walkout’, retrieved from: http://www.europeanvoice.com/article/imported/latvian-education-reforms-set-to-spark-start-of-term- walkout/50481.aspx, conducted on 30 March 2012. 94 Interview R40; interview R27. 95 Interview R27. 96 Ibid. 97 Ministry of Foreign Affairs of the Republic of Latvia, ‘From Segregation to Integration’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/FromSegregationToIntegration/, consulted on 30 March2012. 98 European Voice, ‘Latvian education reforms set to spark start of term walkout’, retrieved from: http://www.europeanvoice.com/article/imported/latvian-education-reforms-set-to-spark-start-of-term- walkout/50481.aspx, conducted on 30 March 2012. 99 Ministry of Foreign Affairs of the Republic of Latvia, ‘Evaluation by European Institutions of Education Re- form in Latvia’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/4643/evaluation-of-education- reform/, consulted on 2 April 2012. 100 GeoPolitika, ‘School as an object of geopolicy: is Latvian experience valuable for Lithuania?’, retrieved from: http://www.geopolitika.lt/?artc=4690, consulted on 30 March 2012. 101 Ministry of Foreign Affairs of the Republic of Latvia, ‘From Segregation to Integration’, retrieved from: http://www.am.gov.lv/en/policy/4641/4642/FromSegregationToIntegration/, consulted on 30 March2012. LATVIA AND THE EUROPEAN UNION 327

8.3 Health care in Latvia

The majority of health care in Latvia is provided through the Ministry of Health. This ministry is responsible for both the drafting and the implementation of the health policy.102 Alt- hough all Latvian inhabitants are covered by a compulsory insurance provided by this ministry, several other ministries are involved in Latvia’s health care provision as well. This chapter will focus solely on the health care services that are provided through the Ministry of Health, as this is the main source of health care.

8.3.1 Latvian health care since 1991 After the re-establishment of independence in 1991, the Latvian government introduced several reforms in an attempt to find the best system for Latvia’s health care provision. Today, local governments are involved in the provision of health care, but their work is mainly focused on ensuring access to health care and promoting a healthy lifestyle.103 The general health policy and its implementation is coordinated by the Ministry of Health.104 Previously, hospital directors were allowed to decide on budget spending, including the wage levels of the employees. This often led to investments in new technologies or better infrastructure, leaving low budgets available for wages. As part of extensive reforms in the 1990s, the government set up minimum wages.105 Although the earnings of doctors in Latvia vary depending on the specialisation and on the contracts made with the state, they are considered ‘quite competitive’.106 Nevertheless, a substantial number of young doctors emigrate to other EU countries where they can earn more, resulting in a shortage of doctors in Lat- via.107 Furthermore, it has been noticed that informal payments are still common.108 This is partly due to the income of those who work within the health care system, but these informal payments are also considered a ‘tradition’,109 making corruption a considerable problem in Latvia’s health care system. A survey has shown that 49 % of the respondents did not deem the informal payments a form of corruption,110 potentially increasing the problem of corruption further.

102 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 35. 103 Ibid., p. 43. 104 Interview R48. 105 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 51. 106 Interview R68. 107 Ibid. 108 Ibid. 109 Interview R15. 110 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, pp. 87-89. 328 PUBLIC LIFE

8.3.2 Health care system The general set-up of Latvia’s health care system is to provide a minimum set of services to the entire population, with the opportunity for them to supplement this minimum set with voluntary insurance.111 These voluntary insurances can be both complementary, when they cover additional services such as dentistry,112 and supplementary, for services such as faster access and higher comfort.113 Previously, approximately five per cent of the population was covered by such an insurance.114 However, since the beginning of the worldwide economic crisis in 2008, the demand for these insurances declined rapidly115 as very few are still able to afford them.116 Although there is still a lot that can be improved, the general opinion is that the current system is more efficient and successful than the system before 1991.117 The worldwide economic crisis increased the process of reforms.118 Although many of these measures were necessary, they were also ‘painful’119 and led to uncertainty amongst the Latvian population.120 One of the characteristics of Latvia’s current health care system is that it does not work with a list containing the services that fall within the state’s budget and for which the population is thus insured. Such a list would be too comprehensive and unaffordable. Instead, the government uses a list containing services that are not covered, combined with a list of ‘priorities’ of health care that should be provided for each inhabitant. Examples of these priorities are emergency and urgent care and prevention of diseases.121

8.3.3 Financing health care The Latvian health care system is funded by both tax revenues and out-of-pocket (OOP) payments.122 These OOP payments, which can be both formal and informal, consist amongst others of:

• Unofficial payments to providers. These include ‘thank you’-payments to a nurse or doc-

111 Ibid., p. 33. 112 Interview R15. 113 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, pp. 74-76. 114 Ibid., pp. 82-83. 115 I. Bite, ‘Annual National Report 2011. Pensions, Health Care and Long-term Care. Latvia’, Analytical Sup- port on the Socio-Economic Impact of Social Protection Reforms, 2011, p. 17, retrieved from http://www.socialprotection.eu/files_db/1130/asisp_ANR11_Latvia.pdf, consulted on 28 March 2012. 116 Interview R48. 117 Interview R15; interview R68. 118 Interview R68. 119 Interview R68. 120 Interview R15. 121 Interview R48. 122 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 61. LATVIA AND THE EUROPEAN UNION 329

tor as well as payments to receive additional services,123 such as clean sheets during a hospital stay.124 Although these unofficial payment contribute to the level of corruption in the health care system, these payments are not the root of this problem;125 • Payments to avoid a long waiting time. When the required resources are available, but there is no state budget to cover the service, the patient can pay for the service OOP. The care is then considered to be provided ‘private’;126 • Symbolic co-payment patient fees, which are official tax-deductible flat-rate fees that the patient is required to pay for each appointment, each day of hospitalisation or for several diagnostics tests, such as X-ray scans. Some people are exempted from paying these fees, such as people with an income of less than 90 lats per month, pregnant women and children.127

Since 1997 the health care budget has been fixed at 10 % of the total government spending.128 The distribution of the public budget is one of the main characteristics of the Latvian health care system. The Ministry of Health transfers nearly all of the budget to the so-called Health Payment Centre (HPC). This institution is responsible for signing contracts with private and public health care providers.129 Without such a contract the patient is not insured for the care provided, and is thus required to pay for the care OOP. The remainder of the ministry’s budget is used for several institutions, such as the State Health Inspectorate which aims to regulate the professional quality of health care and handles patients’ complaints, and the Health Statistics and Medical Technology State Agency (HSMTSA) which deals with the collection and analysis of health information.130 Further- more, this agency is responsible for the certification of health care institutions which are required for health care providers.131 Moreover, the HSMTSA is the agency to approve new medical technologies.132

8.3.4 Health care providers Health care in Latvia is provided by several agencies. The first is the Primary Health Care (PHC) system. These are agencies with General Practitioners (GPs), doctor’s assistants, nurs- es, dentists, pharmaceutics, and midwives133 and every inhabitant is required to register at a

123 Interview R15. 124 Interview R68. 125 Interview R15; interview R68. 126 Interview R48. 127 Ibid. 128 Interview R68. 129 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 33. 130 Ibid., pp. 39-41. 131 Ibid., pp. 110-112. 132 Ibid., p. 120. 133 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 36, 330 PUBLIC LIFE

PHC with a family physician. This physician is the first contact for a patient and can refer the patients to secondary health care providers, such as a hospital or another facility that provides additional care. He or she functions as a gatekeeper to the health care system.134 In Latvia, PHCs can both be private and public.135 In all cases the patient is insured for a visit to the PHC on the condition that this PHC has a contract with the HPC. However, a co-payment is required for each visit, which amounts to one lat per visit.136 Tertiary health care is only provided by the state as it concerns highly specialised care. This includes high-risk treatments or treatments for rare diseases.137 The inpatient care, i.e. when someone is hospitalised for at least 24 hours, accounts for approximately 53 % of total health care spending.138 This is relatively high as the EU average is only 40 %. The reason for this high amount of inpatient care is the focus on hospital care, which lingers from the Soviet period.139 However, significant progress has been made in this aspect: as a result of the worldwide economic crisis the Latvian government has been forced to cut the relatively expensive inpatient hospital care.140 For this reason, outpatient care is stimulated.141

Contracts between HPC and health providers As stated above, a health care provider can only be reimbursed for the provided care if they have signed a contract with the HPC. In theory, these contracts are a result of the implementation of a five-year Action Plan which is set up by the HPC. This Action Plan involves the current actions as well as the main direction of the planned activities. Additionally, the existing infrastructure is taken into account as well as the needed investments for technologies and organisational restructures.142 However, in practice any provider that wishes to sign the contract gets to do so. This fact may lead to cost-ineffective health care.143

8.3.5 Patients’ rights in health care Patients’ rights

retrieved from: http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 19 March 2012. 134 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 43. 135 Ibid., p. 34. 136 Interview R48. 137 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 43. 138 Interview R48. 139 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 72. 140 Interview R68. 141 Interview R48. 142 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, pp. 107-108. 143 Ibid., p. 94. LATVIA AND THE EUROPEAN UNION 331

The Latvian constitution states that everyone in Latvia has the right to a basic level of medical assistance. This includes ‘citizens of Latvia, non-citizens of Latvia, foreign nationals who have a residence permit, citizens of the EU, EEA and Switzerland, as well as [...] persons detained, arrested and sentenced with deprivation of liberty.’144 This means that the state covers the medical expenses for everyone who resides on Latvian territory. Therefore, even the considerable stateless minority in Latvia is insured by the public coverage.145 The Law on Medical Treatment from 1997 further states that ‘patients have the right to “considerate” and “respectful” medical treatment and care; the right to information [i.e. information on diagnosis and possible treatment]; and the right to confidentiality and privacy.’146 Furthermore, the patient has the right to refuse examination or treatment and the right to choose his physician, although the physician can refuse the patient ‘if the patient is not a resident of the territory defined in the physician’s contract’ with the HPC.147 However, in 2002 the World Health Organisation (WHO) regional office for Europe stated that the 1997 Law on Medical Care ‘offers unsatisfactory protection of the rights of patients in a number of areas, particularly in the areas of confidentiality and privacy.’148 Fur- thermore, there were no specific regulations in which the patients’ rights were regulated. In December 2009 the government therefore agreed upon the Patients’ Rights Act. This Act regulates which rights the patient has, including the right to free choice.149 When creating this Act special attention was paid to the protection of data of the patients.150 Nevertheless, it has been observed that this still poses a problem. Especially in the countryside information is not always handled discretely.151 On the whole, however, it has been stated that the patients’ rights are better protected today than they were in 2002.152

Right to information Another right discussed in the Act of 2009 is the right to access medical information.153 How- ever, it has been observed that there are still substantial shortages considering this right.154

144 Paragraph 17, ‘Medical Treatment’ (2006) in: O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Re- view’, Health Systems in Transition (10), 2008, p. 74. 145 Interview R48. 146 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, pp. 54-56. 147 Ibid., pp. 55-56. 148 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 54. 149 M. 1itcs e.o., ‘Country Brief: Latvia’, European Commission, DG Information Society Media, October 2012, retrieved from: http://ehealth-strategies.eu/database/documents/Latvia_CountryBrief_eHStrategies.pdf, consulted on 24 April 2012. 150 Lex Universal, ‘Latvia – Law on Patients Rights Adopted’, retrieved from: http://lexuniversal.com/en/news/10372, consulted on 24 April 2012. 151 Interview R68. 152 Interview R15; interview R68. 153 M. 1itcs e.o., ‘Country Brief: Latvia’, European Commission, DG Information Society Media, October 2012, retrieved from: http://ehealth-strategies.eu/database/documents/Latvia_CountryBrief_eHStrategies.pdf, consulted on 24 April 2012. 154 Interview R48. 332 PUBLIC LIFE

The majority of the information on health care is provided by the family’s GP and the institutions under the direction of the Ministry of Health.155 However, research in 2002 has shown that only 25 % of the Latvian population considered themselves adequately informed on health care services and provision.156 This gap in the provision of information has proven to be extensive and can potentially have considerable consequences. For instance, a Euroba- rometer survey in 2007 revealed that 22 % of the Latvian respondents thought they could not afford the services of a family doctor,157 while this visit is covered for by the state.158 Several organisations, including the WHO, have stated that this gap in information leads to postpon- ing a visit to the doctor.159 Especially men tend to delay visits, resulting in a relatively low life expectancy (see also page 12).160 For these reasons, the Ministry of Health has put more focus on educating the Latvians on Latvia’s health care system and a healthy lifestyle to prevent diseases.161 However, it is noted that for the moment the new plans are only a commitment. As long as there is no budget to implement these plans little will be achieved.162 Furthermore, it has been observed that the situation of the Russian-speaking minority poses a problem. Although their rights are the same, including their right to the general insurance provided by the state, in practice their access to health care is obstructed by the fact that all communication between state-run health care institutions and patients must be in Latvian. For information in Russian the patient is dependent on private institutions, which is often not covered by the state insurance. It is therefore more difficult to inform the Russian-speaking minority on health care issues. For instance, when women are invited to a screening for breast cancer the Russian-speaking women often do not understand the letter and therefore do not go to this screening. Nevertheless, there is no evidence to suggest that the access of the minority to doctors is less than that of Latvians, as ‘[a]ll doctors speak [the] Russian language, that is for sure’.163

Safeguarding patients’ rights and health care quality At the moment, there is no institution that focuses solely on the rights of patients. Since 2007, the office of the Ombudsman is tasked with promoting patients’ rights.164 This also includes

155 Interview R68. 156 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 56. 157 European Commission, ‘Health and long-term care in the European Union’, Special Eurobarometer (283), 2007, p. 51. 158 Interview R48; interview R68. 159 Interview R15; T. Evetovits, World Health Organisation Europe, ‘Priority to health during and after the economic crisis in Latvia’, presentation held on 8 September 2010, p. 16. 160 Interview R15; interview R48. 161 Interview R48. 162 Interview R68. 163 Ibid. 164 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 46. LATVIA AND THE EUROPEAN UNION 333 promotion of a healthy lifestyle and the prevention of diseases,165 but it does not include patient safety in health care institutions. Their work is further restricted by the fact that 79 % of the Latvian population does not know how to make a complaint.166 Regarding Latvian health care, the system contains several mechanisms to safeguard its quality. Firstly, there is the aforementioned Ombudsman, which follows up on patients’ complaints. This office also trains personnel to improve the quality of the provided services.167 Secondly, several international organisations are involved in Latvia’s health care, such as the Red Cross,168 the WHO,169 and the Soros Foundation170 which try and improve the system.171 Thirdly, the government has set up a State Health Inspectorate which ‘aims to regulate the professional quality of health care and handles patient complaints’ and ‘is responsible for the supervision and control of pharmaceutical enterprises in production, purchase and distribution of medicines.’172 Additionally, the State Health Inspectorate deals with (patients’) complaints and it has the right to fine providers as well as transfer a case to the state prosecutor’s office.173 Finally, health care institutions can only provide the care with the right certificates for which they need to reapply every five years.174 For physicians a similar requirement exists: they are only allowed to work if they have acquired the mandatory certificates.175 Without a certificate, a physician is not permitted to practice.176

8.3.6 Patients’ satisfaction Latvia’s health care system has revealed to contain several shortages: the provision of information is far from ideal and the costs of treatment can keep patients from visiting a doctor. As these are substantial issues, it is not surprising that research in 2002 has shown that 37 % of the Latvian respondents feel rate Latvia’s health services with either ‘bad’ or ‘very bad’.177 Another survey from 2008 has shown that 80 % of the respondents did not think that the Latvian health care system satisfied the needs of the population.178 The main reason for this

165 Interview R68. 166 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 57. 167 Interview R68. 168 Latvian Red Cross, ’Who we are?’, retrieved from: http://www.redcross.lv/start.php?lang=en, consulted on 15 May 2012. 169 World Health Organisation, ’Latvia’, retrieved from: http://www.who.int/countries/lva/en/, consulted on 15 May 2012. 170 Soros Foundation, ’Soros Foundation – Latvia’, retrieved from: http://www.soros.org/about/locations/latvia, consulted on 15 May 2012. 171 Interview R68. 172 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 41. 173 Ibid., pp. 57-58. 174 Interview R48. 175 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 47. 176 Ibid., p. 52. 177 Ibid., p. 58. 178 I. Bite, ’Annual National Report 2011. Pensions, Health Care and Long-term Care. Latvia’, Analytical Sup- 334 PUBLIC LIFE

was the inefficiency of the system.179 However, other research in 2002 has shown that those who receive health care services are satisfied: of those who had received any health care service, 81 % was ‘satisfied’ or ‘very satisfied’ with the service, while only 9 % was dissatisfied. The main reason for dissatisfaction was the attitude and skill of the treating doctor: this caused 53 % of the displeased patients. Although the ineffective system and high medical costs also led to dissatisfaction from patients, it was only the root cause for these displeased patients in 10 and 8 % of the cases, respectively.180 It is unclear what has caused the high satisfaction amongst patients.

8.3.7 E-health As stated above, two of the main issues of the Latvian health care system are its inefficiency and the lacking provision of information. As a part of the resolution of these issues, the Latvi- an government has invested in a comprehensive electronic health care system (‘e-health’) since 2005.181 The goals of the Latvian e-health system include to ‘promote individual control of [patients’] health, [… to] increase the effectiveness of the health care [and to provide] health care specialists with a quick access to necessary patient health data’.182 The investments have led to considerable developments in the area of e-health. While in 2006 only 7.2 % of the primary health care facilities was equipped with a computer with internet access,183 today nearly all billing and payment processes are digitalised. Currently, patients can easily access their medical records online. This does not only result in better informed patients, it also gets them more involved in the treatment process.184 The regulation of 2005 on e-health is not fully implemented yet as there are still several developments planned for the remainder of 2012.185 Although these government plans regarding e-health show great promise, including a better communication between the health care providers and a better provision of information towards patients, several questions come to mind. Most importantly, for the possible advantages to become reality an internet connection is required which not all Latvians have. Additionally, as the aforementioned portal will be published by the government the information is likely to be in Latvian only. It is therefore probable that the government will not be

port on the Socio-Economic Impact of Social Protection Reforms, 2011, p. 22, retrieved from: http://www.socialprotection.eu/files_db/1130/asisp_ANR11_Latvia.pdf, consulted on 28 March 2012. 179 Ibid., p. 22. 180 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 58. 181 Ibid., p. 137 182 National Health Service Latvia, ‘E-health’, retrieved from: http://vec.gov.lv/en/e-health, consulted on 13 May 2012. 183 O. Avdeeva and M. Schäfer eds., ‘Latvia. Health System Review’, Health Systems in Transition (10), 2008, p. 137. 184 National Health Service Latvia, ‘E-health’, retrieved from: http://vec.gov.lv/en/e-health, consulted on 13 May 2012. 185 Ibid. LATVIA AND THE EUROPEAN UNION 335 able to reach the whole population, severely devaluating the potential of the programme.

8.4 Public health

8.4.1 Provision of public health Since regaining independence in 1991, Latvia has started to develop a modern public health system, which continues to develop and which Latvia is aiming to improve. Public health is a very broad area, which focuses on the health of the entire population, the prevention of diseases, the control of the health-related environment, health promotion, and prolonging life through organised efforts of society.186 Some of these elements will be discussed in more detail below. Also, an overview of institutions responsible for the provision of public health programmes in Latvia will be given. The Ministry of Health of the Republic of Latvia is the main authority responsible for the provision of public health services. Its most recent strategic policy document is the Latvian Public Health Strategy 2011 – 2017.187 For an optimal promotion of the health of the entire population, the Ministry of Health works together with schools, other ministries, NGOs, the EU and other international organisations.188 It also provides informative materials to the 38 Health Promotion Centres of the Latvian Red Cross. These centres of the Latvian Red Cross provide people with health consultations and in this way try to contribute to the health improvement of the population (sometimes the centres also provide humanitarian aid).189 From 2012 on, there is a new approach of health promotion in municipalities, for which the Latvian Department of Public Health (division of Health Promotion) of the Ministry of Health will be responsible.190 Controlling and preventing an outbreak of infectious diseases is a very important task of the public health system.191 To do this, there is attention for the ‘control of environmental sanitary and hygiene conditions and epidemiological surveillance of infectious diseases’.192 Additionally, a legal framework has been put in place, of which the laws and procedures have fulfilled the requirements of the EU, and notification of infectious diseases to the European Centre of Disease Control is required.193

186 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, p. 163. 187 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 10, retrieved from:http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc225 73d800293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 18 March 2012. 188 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008,pp. 167 – 168. 189 Interview R15. 190 Interview R48. 191 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, p. 164. 192 Ibid., p. 164. 193 Ibid., p. 165. 336 PUBLIC LIFE

Connected to the prevention of the outbreak of diseases is the task of the surveillance of immunisation. Latvia has a State Programme of Immunisation, which is based on the guidelines of the World Health Organisation. In 2008 about 95 to 98 % of Latvian children had been vaccinated against various diseases.194 The remaining 2 to 5 % had not been vaccinated because of religious and ecological reasons, and also because of discussions in the media about vaccinations (if vaccinations were helpful, dangerous etc.).195 This has confused some of the parents, not knowing whether it would be a good or a bad thing to vaccinate their children.196 Another important task of the public health system is the provision of screening services. In Latvia there are screening programmes divided in population-based and opportunistic screening. Population-based screening is where a test is offered to all individuals of a certain target group, on the basis of a certain policy or protocol, and it is monitored,197 whereas opportunistic screening is when people ask their doctor for a test or a check-up, and it may not be monitored.198 Opportunistic screening in Latvia does not work properly because ‘the number of patients with cancer diagnosis at a late stage is growing in the country’.199 Health promotion is also a task of the public health system. In 2008 the Latvian Ministry of Health targeted seven main areas of health promotion: family health, prevention of cardiovascular diseases, addiction prevention, healthy nutrition, physical activity, communicable diseases prevention and mental health.200

8.4.2 Reforms Since the end of the Soviet occupation, many reforms have been made with regard to the Lat- vian health sector and public health. The Latvians wanted to make a clear break with everything that had been implemented by the Soviets, which also included the Soviet health care and public health system. Latvia wanted to lean towards its European neighbours and take over the characteristics of the health sector of Western Europe.201 This led to privatisation and decentralisation, which was partially reversed again in 1997 because it turned out to be too

194 Ibid., p. 166. 195 Interview R48. 196 Ibid. 197 Australian Health ministers Council, ‘Population based screening framework’, retrieved from: http://www.cancerscreening.gov.au/internet/screening/publishing.nsf/Content/pop-based-screening- fwork/$File/screening-framework.pdf , consulted on 8 April 2012. 198 National Screening Unit, ‘Organised and opportunistic screening’, retrieved from: http://www.nsu.govt.nz/about/1778.aspx, consulted on 8 April 2012. 199 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, p. 166. 200 R. Muci(% (Ministry of Health), ‘Challenges and strategic plans for development of the Latvian health care system’, retrieved from: http://www.sykehusplan.no/data/081119_mucins_chalanges_and_strategic_plans_for_developments_in_lv.pdf , consulted on 14 March 2012. 201 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, p. 229. LATVIA AND THE EUROPEAN UNION 337 expensive. From that moment on the reforms had a more centralising character.202 The huge health care reforms did not immediately take place after independence in 1991, and hence suffered from delays. It took policymakers years to agree upon a good and suitable health care model, and only from 1998 onwards did major reforms start to take place.203 From 1998 on, the World Bank initiated – together with the Latvian Ministry of Welfare – a Health Reform Project that steered the health care reforms.204 The aim was to help the Latvian government with restructuring the health sector. The most important reforms are summarised below. Some reforms were initiated and carried out solely by the Latvian government, while others were carried out with help from the World Bank or the European Union. The main laws and regulations will be discussed, but the list is not exhaustive. An important law was the Law on Medical Care of 1997, which regulates the supervision and provision of health care, patients’ rights, and the responsibilities of organisations providing health care.205 Many amendments to this law have been made, up until 2009. Further regulations with regard to the practices, professionalism and quality of physicians have been put in place since then. There has been attention for pharmaceuticals in the law as well, by putting in place the Pharmacy Law in 1998 (with amendments in 2005) and other regulations which define the quality, price and reimbursement of the different pharmaceuticals.206 Besides that, many regulations have been introduced that concern health insurance and the financing of the health sector. Examples of these are the “Regulations of the Cabinet of Ministers on the Statute of the State Compulsory Health Insurance Agency” of 2003 (which makes an end to regional sickness funds. SCHIA, renamed Health Payment Centre, is the only responsible institute for it now), and the ‘Regulations of the Cabinet of Ministers on Organi- zation and Financing of Health Care’ (2004/2005) replacing the regulations that were in place since 1999.207 In general, the regulations of 2004/2005 outline how the current system of health care is organised and financed. Lastly, there is the Public Health Strategy of Latvia, based on the 21 WHO Health targets, which has recently been followed up by the Public Health Strategy for 2011-2017, with the aim ‘to prolong the healthy life years of Latvian population and to prevent untimely death, maintaining, improving and restoring health.’208

202 Ibid., p. 33. 203 F. Rajevska, ‘The welfare system in Latvia after renewing independence’, in: K. Schubert, S. Hegelich, U. Bazant, The Handbook of European Welfare Systems,Londen& New York: Routledge 2009, p. 336. 204 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, p. 219. 205 Ibid., p. 212. 206 Ibid., pp. 214, 217, 219. 207 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, pp.216, 217. 208 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 10, retrieved from: 338 PUBLIC LIFE

Programmes that have been partially influenced or financed by the World Bank regard areas such as a management information system, investment policy development, and training of GPs.209 The EU has also played an important role in Latvia’s health care reforms. An example of the EU’s influence can be found within Latvia’s National Programme for Health Care between 2004 and 2006. The programme was aimed at restructuring and renovating health care institutions and equipment, such as hospitals and ambulances, and it was partially financed by the EU: of the invested 13.5 million lats, 6.9 million lats was provided by the EU.210 Between 2009 and 2011, there have been important reorganisations within the Ministry of Health.211 Some agencies, such as the Public Health Agency, were closed, while new ones were set up, such as the Latvian Infectology Centre, the Health Payment Centre and the Cen- tre of Health Economics (the last two were combined into the National Health Service in 2011).212 Certain tasks of the old agencies have been taken over by the new ones.

8.4.3 Analysis and outlook In this section, the effectiveness of the reforms discussed above will be analysed by looking at the current state of Latvia’s health care system and Latvian public health. First, the universal objectives of the health sector will be discussed. Then an overview of recent and current problems in the Latvian health sector will be given. Finally, some of the proposed solutions to these problems will be reviewed.

Universal objectives There are five universal, general objectives with regard to the health sector in every country: equity in access and financing, efficiency in resource allocation, efficiency in production of health care, quality of health care, and improvements to health status.213 For all these five objectives there is room for improvement in Latvia,214 although the Latvian authorities occupied with health care and public health are making enormous efforts to improve the situation. This is necessary, because according to the Euro Health Consumer index from 2008, Latvia has the worst health care system in Europe.215 According to a recent survey, more than 80 % of the

http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 3 June 2012. 209 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, pp. 220- 223. 210 Ibid., pp. 216, 217. 211 Interview R15. 212 UNAIDS, ‘Country Progress Report LATVIA’, retrieved from:http://www.unaids.org/en/dataanalysis/monitoringcountryprogress/progressreports/2012countries/ce_LV_ Narrative_Report.pdf, consulted on 3 June 2012. 213 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, p. 231. 214 Ibid., pp. 232 – 234. 215 N. Kolyako, ‘Latvia has worst health care system in Europe’, retrieved from: http://www.baltic- LATVIA AND THE EUROPEAN UNION 339 population believes that the Latvian health care system does not meet their needs, and has to be changed profoundly.216

Health care problems There are problems which continue to dominate the Latvian health care sector and improvements should be made. Firstly, although health care is universal in Latvia, the accessibility to services is not sufficient. There are not enough health care services, because of a lack of state budget.217 Compared to other EU countries, Latvia has only dedicated a small part of its GDP to the health sector.218 It is more difficult for low-income individuals to receive all the health care and medicines they need.219 Especially in the countryside is the accessibility lower. Secondly, the Latvian health care system does not meet certain criteria of the EU. An example is the criteria which state that emergency assistance should be available within 70 kilometres or that doctors should arrive within one hour after the call.220 Thirdly, the waiting time for certain treatments or services is very long.221 This problem is connected with another problem: the existence of informal payments. As mentioned in section 8.3.3 (see page 328), people carry out informal payments to avoid a long waiting time.222 It might also be a ‘thank you’ payment to a doctor, which is considered a kind of tradition.223 Fourthly, the shortage of human resources is a significant problem. There is a lack of GPs and other personnel in the health care sector because of economic and demographic factors (especially in the rural areas).224 Not many doctors find it attractive to work in the countryside, and the ones who are stationed in the countryside only work in very small teams.225 The fact that many doctors have reached the retirement age will contribute to the shortage.226 In the past few years, many physicians decided to quit their job. About 2 500 physicians have

course.com/eng/analytics/?doc=7137, consulted on 12 February 2012. 5. 216 Baltic News Network, ‘80% of Latvia’s population regard health care system as costly and ineffective’, retrieved from: http://bnn-news.com/80-latvia%E2%80%99s-population-regard-health care-system-costly-ineffective-19401, consulted on 12 February 2012. 217 Interview R15; interview R48; interview R15. 218 Interview R68. 219 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, p. 232. 6. 220 Baltic News Network, ‘80% of Latvia’s population regard health care system as costly and ineffective’, retrieved from: http://bnn-news.com/80-latvia%E2%80%99s-population-regard-health care-system-costly-ineffective-19401, consulted on 12 February 2012. 221 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, p. 170. 222 Interview R15. 223 Ibid. 224 R. Muci(% (Ministry of Health), ‘Challenges and strategic plans for development of the Latvian health care system’, retrieved from: http://www.sykehusplan.no/data/081119_mucins_chalanges_and_strategic_plans_for_developments_in_lv.pdf , consulted on 17 March 2012. 225 Interview R48. 226 Ibid. 340 PUBLIC LIFE

left their position in Latvia since 1996.227 Especially during the accession wave of 2004, a huge amount of workers from the Latvian health sector left the country and went to other EU Member States.228 Lastly, the services are not well connected to each other. Health care and social care, as well as primary, secondary and tertiary care are not very well integrated with each other.229

Public health problems There are also problems which continue to dominate the area of public health. Firstly, the health status of the people in Latvia is an area of concern. Although both male and female life expectancy show an increasing trend, they are still among the lowest in the EU.230 The life expectancy of new-borns in the EU was 6.4 years higher than that of new-borns in Latvia, as can be seen in Figure 8.1.231 According to Eurostat figures, the life expectancy of Latvian women in 2010 was 78.4 years and that of Latvian men only 68.6 years.232 The low life expectancy, as well as the differences between men and women, can be linked to an unhealthy lifestyle. Especially persons with low income and low education have an unhealthy lifestyle, with smoking and alcohol consumption, low physical activity and unhealthy nutrition.233 Men tend to drink and smoke more than women,234 and are harder to reach by public health promotion campaigns.235

227 F. Rajevska, ‘The welfare system in Latvia after renewing independence’, in: K. Schubert, S. Hegelich, U. Bazant, The Handbook of European Welfare Systems, Londen& New York: Routledge 2009, p. 356 228 H. Kohl, ‘Where Do Trade Unions Stand in Eastern Europe Today? Stock-taking after EU Enlargement’, IPG(3), 2008, p. 123. 229 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, p. 181.; interview R68. 230 Z. Jakab (WHO), ‘Better Health for All in Latvia: The health strategy for the European Region (Health 2020) and the Latvian Public Health Strategy 2011–2017’, retrieved from: http://www.euro.who.int/__data/assets/pdf_file/0006/140496/Pres_better_health_Latvia_2011.pdf, consulted on 18 March 2012 231 Interview R48. 232 Eurostat, ‘Healthy life years and life expectancy at birth, by gender’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/refreshTableAction.do;jsessionid=9ea7d07d30f09116e0c59ac94c81bfd78a5 576ebc053.e34OaN8PchaTby0Lc3aNchuMbxiNe0?tab=table&plugin=1&pcode=tsdph100&language=en, consulted on 18 March 2012. 233 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 13, retrieved from:http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc225 73d800293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 18 March 2012. 234 Interview R15; interview R48. 235 Interview R15. LATVIA AND THE EUROPEAN UNION 341

Figure 8.1: Average life expectancy of new-borns in EU and Latvia, in years.236

Secondly, there is a high mortality rate. Of all Latvian men, 48 % dies before the age of 65, while the average in the EU is 29 %.237As mentioned above, this can be linked to an unhealthy lifestyle: addiction problems are widespread in Latvia. According to the WHO, alcohol-related and smoking-related mortality as well as alcohol consumption are among the highest in Europe.238 With health promotion programmes, for example a National Tobacco Control Programme (2006 – 2010), and amendments to laws, the Latvian government is trying to bring these rates down. Despite decreasing trends, alcohol- and smoking-related mortality in Latvia is still high compared to the EU average. In 2009, the death rate per 100 000 inhabitants due to alcohol abuse in the EU-27 was 2.6, while for Latvia it was 4.0.239 One factor contributing to this high rate is the fact that the prices of alcohol as well as cigarettes in Latvia are still quite low compared to other European countries.240 The high mortality rate can also be linked to the economic recession, which causes stress and depressions, which in turn cause persons to commit suicide.241 The Latvian suicide rate is high: for Latvia the death rate due to suicide per 100 000 inhabitants is 20.7, while for the entire EU it is 10.3 (in 2009).242 Only

236 Unknown author, ‘Public Health Strategy for 2011-2017’, presentation held on 19 April 2012, p. 4. 237 Interview R48. 238 Z. Jakab (WHO), ‘Better Health for All in Latvia: The health strategy for the European Region (Health 2020) and the Latvian Public Health Strategy 2011–2017’, retrieved from: http://www.euro.who.int/__data/assets/pdf_file/0006/140496/Pres_better_health_Latvia_2011.pdf, consulted on 16 March 2012. 239 Eurostat, ‘Death Rate due to alcoholic abuse, by gender’, retrieved from: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tps00140&plugin=1, consulted on 9 April 2012. 240 Interview R48. 241 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 23, retrieved from: http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 18 March 2012.; interview R48. 242 Eurostat, ‘Death due to suicide, by gender’, retrieved from: 342 PUBLIC LIFE

Hungary and Lithuania have a higher rate. Thirdly, there is a high morbidity rate as a result of non-infectious a well as infectious diseases.243 Some infectious (or communicable) diseases are widespread in Latvia. Latvia is one of the countries in the EU with high numbers of people infected with hepatitis C (HCV), HIV and (resistant) tuberculosis (TB), and not all of them receive appropriate health care services.244 Related to HIV, many inhabitants of Latvia have little knowledge about issues related to sexual or reproductive health. There is also little knowledge about how to deal with pregnancy.245 The high morbidity rate can also be explained by the unhealthy lifestyle of the public, a lack of information about healthy lifestyles and a lack of accessibility to the improvement of a healthy lifestyle (for example sports facilities). Fourthly, late diagnoses of cancer are a problem. Cancer is one of the main issues in Lat- via, and compared to the EU average, a cancer diagnosis in Latvia is not made at an early stage.246 Also, as discussed in the section ‘Right to information’, when for example women are invited to a screening for breast-cancer, the letter is in de official state language, which is Latvian. Russian-speaking women do not understand the letter, which keeps these women from going to the screening.247 Other problems within the public health sector are of various nature:

• Latvian society does not know how to deal with people with mental health disorders, resulting in the exclusion of these people from society.248 • There is a lack of sufficient state funding for the health system.249 Health promotion is underfunded.250 • There is not enough awareness among the population about a safe living and working environment and about traumatism.251

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tps00122&plugin=1, consulted on 18 March 2012. 243 O. Avdeeva and M. Schäfer eds., ‘Latvia: Health system review’, Health Systems in Transition 10 (2), 2008, p. 168. 244 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 33, retrieved from: http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 18 March 2012. 245 Ibid., p. 27. 246 Interview R68. 247 Ibid. 248 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 23, retrieved from: http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 18 March 2012. 249 R. Muci(% (Ministry of Health), ‘Challenges and strategic plans for development of the Latvian health care system’, retrieved from: http://www.sykehusplan.no/data/081119_mucins_chalanges_and_strategic_plans_for_developments_in_lv.pdf , consulted on 17 March 2012. 250 Interview R68. 251 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 31, retrieved from: LATVIA AND THE EUROPEAN UNION 343

• The quality criteria for the health care services as they are now are not enough to guarantee an ‘effective and safe treatment process and long-term improvement of public health indicators.’252

Solutions: recent plans and specific objectives Although the list of problems within Latvian health care and public health is quite long, the Ministry of Health has identified and recognised these problems. With regard to health care, the Ministry has adopted the following approach: within the budget, it gives priority to primary care, to outpatient care, and to integrated emergency medical services.253 Furthermore, it tries to attract more personnel and to make more medicines fall within the reimbursement scheme. Additionally, it has developed a new Social Safety Net Strategy, to protect poor people.254 Moreover, there are several institutions that try to help to improve the system and safeguard the health care quality and the rights of patients. Since the economic crisis there has been less resistance against reforms, and a tendency towards improvement can be seen in the provision of primary health care services.255 All problems of public health mentioned above are identified in the recently developed Public Health Strategy 2011 – 2017, complete with objectives to be reached as well as possible means for doing this. The ultimate aim of the Strategy is ‘to prolong the healthy life years of Latvian population and to prevent untimely death, maintaining, improving and restoring health.’256 The Strategy is connected with other strategies, such as the Sustainable Develop- ment Strategy for Latvia, ‘Latvia 2030’, where one of the goals is to increase the life expectancy of men and women to 75 and 82 years, respectively.257 In the Public Health Strategy for 2011 – 2017 the various problems are recognised and objectives are defined. The measures proposed in the Strategy focus mostly on educating and informing the public about public health and everything that is connected with it (such as lifestyle, risk factors etc.); monitoring coordination between different institutions, organisations and layers of the government; and implementing policies to tackle public health problems.258 At the end of http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 18 March 2012. 252 Ibid., p. 39. 253 Z. Jakab (WHO), ‘Better Health for All in Latvia: The health strategy for the European Region (Health 2020) and the Latvian Public Health Strategy 2011–2017’, retrieved from: http://www.euro.who.int/__data/assets/pdf_file/0006/140496/Pres_better_health_Latvia_2011.pdf, consulted on 18 March 2012 254 Ibid. 255 Interview R68. 256 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 10, retrieved from: http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 3 June 2012. 257 Interview R48. 258 Ministry of Health of the Republic of Latvia, ‘Public Health Strategy for 2011-2017’, 5 October 2011, p. 13, 23, 27, 31, 33, 39, retrieved from: http://phoebe.vm.gov.lv/misc_db/web.nsf/626e6035eadbb4cd85256499006b15a6/ab75e1a6c38b637dc22573d80 344 PUBLIC LIFE

2012, five main action plans will be developed: for the development of human resources and the health care system, for restricting alcohol consumption, for maternal and child health improvement, for cardiovascular health improvement, and for guidelines on health promotion measures in local government authorities.259 A very important basic principle is Health in All Policies, which means that the focus should not only be on the health sector, but also on sectors closely related to it, like education, the food industry, science and so on.260 Moreover, from 2012 on, a new approach has been developed for health promotion in the regions of Latvia. This is an approach which is probably welcomed by the regions, because until now they were of the opinion that the system was too centralised.261 Regional and local governments have more knowledge about what is going on in their region and what the specific needs are with regard to health care and public health issues.262 This can make the whole health sector function more efficiently. The plan is called Health Promotion Guidelines in Municipalities, and makes the municipalities more involved in health promotion. ‘The main fields of the guidelines are physical activities, nutrition, prophylaxis of addictive diseases and family health promotion.’263 There will be more interplay between the Ministry and the municipalities by means of a municipality contact person. Part of the training of these contact persons is funded by European structural funds.264 There will be information exchange, the Ministry will provide support in health promotion and the municipalities will feel stimulated to take their own initiatives with regard to health promotion.265 The municipalities will work together with local partners, such as schools, NGOs and sports organisations. Besides that, the Latvian Ministry of Health is (and will be) working closely together with the WHO. The Latvian Public Health Strategy 2011 – 2017 and the Health Strategy for the European Region, also known as WHO Health 2020, are closely connected, since they face similar challenges, such as trying to prevent certain diseases by addressing the possible risk factors, to improve the infant and maternal health and to diminish the inequity in health.266 The WHO Health 2020 is aimed at strengthening health systems, public health institutions, developing coherent policies to fight health threats, and making the public more involved in health issues.267 Working closely together means also that there are important meet-

0293aaa/$FILE/POamatnostadnes_eng_pdf.pdf, consulted on 3 June 2012. 259 Interview R48; ‘Public Health Strategy for 2011-2017’, presentation held on 19 April 2012, p. 12. 260 Interview R48. 261 Interview D06 262 Ibid. 263 Interview R48.; Author anonymous, ‘Health Promotion in Regions of Latvia’, presentation held on 19 April 2012, p. 10. 264 Interview R48. 265 Ibid. 266 Z. Jakab (WHO), ‘Better Health for All in Latvia: The health strategy for the European Region (Health 2020) and the Latvian Public Health Strategy 2011–2017’, retrieved from: http://www.euro.who.int/__data/assets/pdf_file/0006/140496/Pres_better_health_Latvia_2011.pdf, consulted on 9 April 2012. 267 World Health Organisation, ‘First meeting of European Health Policy Forum: health 2020’, retrieved from: http://www.euro.who.int/en/what-we-do/event/first-meeting-of-the-european-health-policy-forum/health-2020, consulted on 18 March 2012. LATVIA AND THE EUROPEAN UNION 345 ings between the Latvian Minister of Health Ingr!da Circene and Zsuzsanna Jakab, WHO Re- gional Director for Europe, where the abovementioned topics are discussed and reviewed.268 It remains to be seen if all the projected plans and regulations will improve the Latvian health care situation and public health. Latvia is clearly trying in many ways to contribute to improving the health care situation and public health. Success depends on the question if the plans and initiatives will actually be implemented and carried out, which is sometimes a problem in Latvia.269 This in turn also depends on the money that is available for the Latvian health sector, which is (sometimes) a problem as well.270

8.5 Media

8.5.1 Press/media under the Soviet regime and transition At the time of the Soviet occupation, the Russian language completely dominated the areas of science, economy, administration and professional life.271 However, media together with culture and education, was one of the areas where society was allowed to use the Latvian language. There was, however, a lot of censorship. The Soviet Union had a state monopoly and could therefore create distorted images of reality.272 Freedom of speech was not allowed, especially about topics like religion, politics and the gulags. During the occupation by the Sovi- et Union many journalists lost their independence; they were either repressed or killed. The most important newspapers were the ones of the Communist Party and the Komso- mol, which was the Communist youth movement.273 They were written both in Latvian and Russian. However, the Latvian language version and the Russian language version did not contain the same articles as only a few articles overlapped.274 Of course neither of them were against the Communist Party, but the way they looked upon events and the emphasis they placed upon things was very different.275 As a result, the division between Russian and Latvi- an language press in Latvia still exists nowadays, which will be discussed in detail in section 8.5.3. During the Perestroika period and especially during the period after the independence of 1991, the media landscape was reformed according to democratic norms. One of the main

268 World Health Organisation, ‘Minister of Health of Latvia signs agreement with WHO/Europe’, retrieved from: http://www.euro.who.int/en/where-we-work/member-states/latvia/sections/news/2012/01/minister-of- health-of-latvia-signs-agreement-with-whoeurope, consulted on 18 March 2012. 269 Interview R68. 270 Ibid. 271 B. Zepa, ‘Citizenship, Official Language, Bilingual Education in Latvia: Public Policy in the Last 10 Years’, in: C.H. Giordano, A. Zvinkliene, D. Henseler eds., Baltic States. Looking at small Societies on Europe´s Mar- gin. Freiburg: University Press 2003, p. 90. 272 D. Daveluy, ‘The media landscape in the Baltic States’, retrieved from: http://www.inaglobal.fr/en/ideas/article/media-landscape-baltic-states?tq=11, consulted on 24 February 2012. 273 V. Zel*e, K. Lo*mele, O. Procevska, ‘Media Landscape: Latvia’, retrieved from: http://www.ejc.net/media_landscape/article/latvia/, consulted on 24 February 2012. 274 Interview R71. 275 Ibid. 346 PUBLIC LIFE

changes was the end of censorship. Besides, there was a change from party ownership to private individual ownership, and the regulatory environment regarding the media became highly liberal.276 Especially between 1991 and 1993, a lot of (small) private media came to the surface, and there were approximately 100 small television stations and producer groups.277 There were also changes in the content of programmes and articles. During the Soviet time a lot of topics had been a taboo, like religion, history, and ‘real’ politics, but after the Cold War many newspapers and radio and television stations started to talk about Latvian history, the gulags and Soviet occupation.278 Despite the democratic reforms, there were some flaws at the beginning of the independence period. This was because most of the journalists and reporters, who had been agents of propaganda during the Soviet period, had difficulties changing their attitude; to adapt to conventions of adopting a watchdog role and to learn how to report critically about the events happening in their county.279 Another difficulty was the attempt to ‘copy’ radio and television laws and standards from the Western countries, while Latvia was not ready for those kinds of changes at that time.280 The Latvian media learned step by step how to behave in a democratic environment with a market system. Training schools for journalists were set up. This process was supported by people who were exiled during the Soviet period and came back to Latvia after the Cold War, with knowledge from other countries, to help build a democratic media landscape.281

8.5.2 The different types of media Different types of media exist in Latvia: print media, radio, television, cinema, telecommunications and internet. Firstly there are the print media, like newspapers and magazines. The level of consumption of print media is high among the Latvians, although the amount of regular readers is not as high. A survey conducted in 2009 showed that only 47 % of the people read newspapers more than once a week.282 In the Netherlands for example, about 67 % of the population reads a newspaper every day (survey of 2010).283 Because of the financial crisis, the market share of print media has diminished in the last few years. The crisis also led to the fact that talented journalists had to leave their job, which in turn led to the deteriorating

276 D. Daveluy, ‘The media landscape in the Baltic States’, retrieved from: http://www.inaglobal.fr/en/ideas/article/media-landscape-baltic-states?tq=11, consulted on 24 February 2012. 277 Interview R25. 278 Ibid. 279 D. Daveluy, ‘The media landscape in the Baltic States’, retrieved from: http://www.inaglobal.fr/en/ideas/article/media-landscape-baltic-states?tq=11, consulted on 24 February 2012. 280 Interview R25. 281 Ibid. 282 V. Zel*e, K. Lo*mele, O. Procevska, ‘Media Landscape: Latvia’, retrieved from: http://www.ejc.net/media_landscape/article/latvia/, consulted on 24 February 2012. 283 Marketing online, ‘9.2 Miljoen lezers lezen per dag de krant’, retrieved from: http://www.marketingonline.nl/nieuws/bericht/92-miljoen-lezers-lezen-per-dag-de-krant/, consulted on 19 May 2012. LATVIA AND THE EUROPEAN UNION 347 quality of reporting. As a result, the focus now mostly lies on general affairs and entertain- ment.284 Besides that, print media is losing ground because of the continuous rising of the internet. In Latvia there are two types of audiences: the Latvian language audience and the Rus- sian language audience. There are 20 daily newspapers, of which 12 are in Latvian and 8 are in Russian. The most important Latvian language dailies are ‘Latvijas Av!ze, which is more popular in rural areas, Diena, and the national-conservative Neatkar!g% R!ta Av!ze’.285 An important business newspaper is the Dienas Bizness. The major Russian language papers are the dailies Chas and Telegraf. The Russian language business paper is called Bisnes I Baltija. Regional newspapers are also very popular in Latvia, more popular than daily newspapers. And even more popular than those are the magazines; this is because magazines are seen as part of the consumer culture, which people did not experience during the Soviet period.286 Secondly, there is radio. There are public operators as well as private operators. The most important radio stations are Latvian Radio (4 channels), Radio NABA (university radio), and the private operators Radio SWH, Star FM and Radio Skonto. Radio played a very important role during the years in which the Latvians strove for independence. They played a key role in the organisation of non-violent protests, by providing the people with all the necessary information.287 Nowadays, some stations transmit in the Latvian language, others in Russian, according to the rules laid down in the Electronic Mass Media Law and the Official Language Law. These laws state that 65 % of broadcast programming (of radio as well as television) has to be in Latvian. Thirdly, there is the medium of television. The main channels are Latvian Television (LTV), LTV1, LTV7, Latvian Independent Television (LNT), TV3 Latvia, TV5. Of all the Latvian households, 98 % has at least one television. Television is the form of media that the Latvians tend to trust most: 59 % of the asked people said they trust this medium.288 Howev- er, the public TV channels face a serious problem. Latvian Television (LTV) is not the ratings leader anymore; it is losing ground to the available commercial channels. A factor that is contributing to the declining importance of the public TV channel Latvian Television (LTV) is the fact that there are many Russian television channels available in Latvia, and most people are bilingual.289 Some of these Russian [language] TV channels come directly from Russia through satellite, some are located in Latvia and some offshore, for example in London.290 In 2009, digital transmissions were introduced. It is to be expected that digital television will

284 Interview R65. 285 Eurotopics, ‘The media landscape in Latvia’, retrieved from: http://www.eurotopics.net/en/home/medienlandschaft/lettlandmdn/ , consulted on 24 February 2012. 286 V. Zel*e, K. Lo*mele, O. Procevska, ‘Media Landscape: Latvia’, retrieved from: http://www.ejc.net/media_landscape/article/latvia/, consulted on 19 May 2012. 287 Ibid. 288 Ibid. 289 I. Brik%e ed., ‘Information environment in Latvia: 2009’, Working Papers: Communication Studies (1), 2010, p. 11. 290 Interview R10. 348 PUBLIC LIFE

increase the competitive position of TV in general, with regard to other forms of media. How- ever, recent data show that the popularity of television compared to radio is (still) quite similar. In 2010, the amount of time spent in front of the television by a Latvian individual was 4 hours and 41 minutes per day (European average is 4 hours), while the time spent listening to the radio was 4 hours and 36 minutes.291 Fourthly, there is Latvian cinema. Latvian cinema is not a very strong branch of media and culture. Inta Brik%e, professor in communication theory, writes that: ‘apparently a certain period of time has to pass before anything called the national film tradition (style, film language elements) could be formed’.292 The financial crisis of 2009 did not help the film industry. Fewer Latvians went to the cinema, also because of the fact that the VAT rate was increased from 5 to 20 %.293 The fifth type of media (or closely related to it), is telecommunications. The Latvian telecommunications sector has been monopolised for some time, but since the mid-1990s that started to change, and it has been gradually liberalised since then. There is more competition and the services have improved. The biggest providers that can be found in the country are Latvian Mobile Telephone, Tele2 and Bite.294 Recently, the European Commission has expressed its concerns about the Latvian telecommunications sector. The Latvian telecoms regulator (SPRK) introduced a plan in March 2012 with the proposal not to use an ‘access obligation’ (which is set out in the EU's Access Directive, 2002/19/EC).295 This plan allows competitors of mobile operators to terminate calls on their networks. In practice this could mean that it would become a problem for Latvian consumers to contact persons who use a different mobile network. Also, operators could deny access to their networks to remove competitors from the market, which conflicts with the principles of the European Single Market.296 The Euro- pean Commission has decided to suspend the plan and is going to review it together with the Body of European Regulators for Electronic Communications, to see if the plan can be changed so as to make sure that it will be in line with the EU regulations.297 Lastly, there is the phenomenon of internet. Internet has developed enormously and has become a very important medium in Latvia; it has taken a leading role within the media environment. Latvia ranks third regarding the internet penetration rate in Central and Eastern Eu-

291 V. Zel*e, K. Lo*mele, O. Procevska, ‘Media Landscape: Latvia’, retrieved from: http://www.ejc.net/media_landscape/article/latvia/, consulted on 7 April 2012. 292 I. Brik%e ed., ‘Information environment in Latvia: 2009’, Working Papers: Communication Studies (1), 2010, p. 17. 293 V. Zel*e, K. Lo*mele, O. Procevska, ‘Media Landscape: Latvia’, retrieved from: http://www.ejc.net/media_landscape/article/latvia/, consulted on 25 February 2012. 294 Ibid. 295 European Commission, ‘Digital Agenda: Commission insists Latvian consumers should benefit from joined- up mobile networks’, retrieved from: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/241&format=HTML&aged=0&language=EN&g uiLanguage=en, consulted on 18 March 2012. 296 Ibid. 297 Ibid. LATVIA AND THE EUROPEAN UNION 349 rope with rate of 60 %. Latvia is only behind Estonia and the Czech Republic.298 Internet is available to more than half of the Latvians. Also, the medium is used by persons of various ages, and therefore it is reaching many people. In 2011, Latvia developed a support scheme for the deployment of high speed broadband networks in Latvia. The speed for internet consumers will increase. This was a support scheme of 71.5 million lats, and it was approved by the European Commission under the EU state aid rules.299 This scheme is in line with the Eu- rope 2020 Strategy, which highlight ‘the importance of broadband deployment to promote social inclusion and competitiveness in the EU’.300 To achieve social inclusion, and to close a certain ‘digital gap’ between urban and rural areas, EU and public funds are necessary, to extend the current broadband coverage to areas within Latvia where private operators would (commercially seen) not invest.301 Internet is the possibility for the Latvians to gather more accountable news (compared to the abovementioned types of media). Websites like ir.lv (from the magazine IR), rebalti- ca.com (from the Baltic Center of Investigative Journalism) and politika.lv can be considered sites of investigative journalism. The latter is partly sponsored by the Latvian Open Society Institute, renamed Latvian Open Society Foundation in 2011, which is part of the Open Socie- ty Foundations founded by George Soros. It supports the development of rule of law, education, public health and independent media.302 Quality news and commentaries can be accessed on these kinds of websites. Besides that, ‘the internet is dominated by a local version of Face- book, which is called Draugiem and three portals - Delfi, Tvnet, and Apollo’.303 The Latvians also often use YouTube, Google and inbox.lv (a site similar to Hotmail.com). Other types of media, like TV channels and newspapers, make use of the popularity of Internet by creating their own online websites, by broadcasting online and by signing up for Twitter accounts.304 Not only TV and newspapers see the advantages of the internet. More and more politicians set up their own sites and accounts as well. Another activity in which Latvians are often involved is blogging. Popular blogs are onkulis.com (about Latvian events and news), krizdabz.lv and

298 Center for International Media Assistance (CIMA) (E. Hume), ‘CIMA research report: Caught in the Middle: Central and Eastern European Journalism at a Crossroads’, 20 January 2011, p. 51, retrieved from: http://cima.ned.org/sites/default/files/CIMA-Central_and_Eastern_Europe-Report_6.pdf, consulted on 25 Febru- ary 2012. 299 European Commission, ‘State aid: Commission clears Latvian support scheme for high speed broadband networks’, retrieved from: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/1323&format=HTML&aged=1&language=EN& guiLanguage=en, consulted on 10 June 2012. 300 Ibid. 301 Ibid. 302 Soros Foundation, ‘About the Open Society Foundation’, retrieved from: http://www.soros.org/about, consulted on 1 March 2012. 303 Center for International Media Assistance (CIMA) (E. Hume), ‘CIMA research report: Caught in the Middle: Central and Eastern European Journalism at a Crossroads’, 20 January 2011, p. 51, retrieved from: http://cima.ned.org/sites/default/files/CIMA-Central_and_Eastern_Europe-Report_6.pdf, consulted on 25 Febru- ary 2012. 304 I. Brik%e ed., ‘Information environment in Latvia: 2009’, Working Papers: Communication Studies (1), 2010, p. 9. 350 PUBLIC LIFE

pods.lv (about technology), laacz.lv (about lifestyle) and arturs.jaffa.lv (about social networks, internet and marketing).305 Worth mentioning in the blogging context is Juris Kaza, a well-known and popular Latvian-American blogger. He writes critically about things happening in Latvia, for example in the political or journalistic landscape.

8.5.3 Cultural aspects of the media As will be described below, the cultural and societal tensions within Latvia are both represented and reinforced by the media. The most outstanding and important feature of the Latvi- an media is that it is focused on two audiences: a Russian speaking audience and a Latvian speaking audience.306 This is a result of the Soviet occupation, because already at that time the most important newspapers were written in both Latvian and Russian. The implications of this two-audience division is that readers of newspapers get a very coloured view of the issues in Latvian society. As described above, during the Soviet occupation two versions of the official communist newspaper existed in Latvia: one was written in the Latvian language, the other in Russian. But it was not only the language that was different: research has shown that even the topics that were discussed were different.307 The Soviet regime understood that there were different groups in society. This division in Latvia between Latvian language press and Russian language press can still be found nowadays. The Russian and Latvian press within Latvia are still two information spaces which are little related.308 Because of this parallelism, diversity of opinions on an issue does not exist within one media group.309 Meaning that the Latvian language media display the Latvian opinion, whereas the Russian language media in Latvia express the Russian opinion. In a way, it is logical that this division exists, since the groups see this division as part of their identity and memory, and the two groups have very different perspectives on history and politics.310 Latvian language newspapers have a global view and serve as a watchdog by critiquing political processes, whereas the Russian language papers focus for the most part only on the Rus- sian community within Latvia, on Russia and on its spheres of interest in the former Soviet Union.311 Latvian language print media not only write about things happening in Riga, but

305 Public Intelligence, ‘(U//FOUO) U.S. State Department Social Media Landscape: Latvia’, retrieved from: http://publicintelligence.net/ufouo-u-s-state-department-social-media-landscape-latvia/, consulted on 01 April 2012. 306 M. Mozers, ‘Latvian media identity and diversity’, Filosofija Sociologija 18 (4), 2007, p. 91. 307 Interview R71. 308 B. Zepa, ‘Citizenship, Official Language, Bilingual Education in Latvia: Public Policy in the Last 10 Years’, in: C.H. Giordano, A. Zvinkliene, D. Henseler eds., Baltic States. Looking at small Societies on Europe´s Mar- gin. Freiburg: University Press 2003, p. 93. 309 I. Sulmane, ‘The Media and Integration’, in: N. Muiznieks, How Integrated is Latvian Society? An Audit of Achievements, Failures and Challenges, Riga: University of Latvia Press 2010, p. 252. 310 Interview R71; interview R65. 311 V. Zel*e, K. Lo*mele, O. Procevska, ‘Media Landscape: Latvia’, retrieved from: http://www.ejc.net/media_landscape/article/latvia/, consulted on 24 February 2012. LATVIA AND THE EUROPEAN UNION 351 also about the countryside and Latvian regions; the Russian language print media write largely about topics regarding Riga.312 Discussions between the two groups can hardly be found in one and the same newspaper. The fact that dialogue is absent and people live in very different information spaces does not help to solve cultural and societal problems between the different ethnic groups.313 Media discourse (how reality is represented by the media) plays an important role in shaping public opinion and reflecting political events.314 Issues that are presented completely different usually concern historical issues and language issues.315 A very clear example of the Latvian versus the Russian opinion in the media landscape regards the school-language issue. In 2004, an amended education law was introduced in Latvia, requiring that a minimum of 60 % of the teaching on secondary schools was to be carried out in in the official state language which is Latvian (see also page 324).316 In the Russian-orientated media it was described as a reform attempting at ‘assimilating Latvian- isation’.317 The Latvian-orientated media on the other side said the Russian-orientated media was telling untruths, and that it was responsible for strengthening stereotypes.318 The Latvian press assured that the Russian language would be protected, because according to them the Russian-speaking minority would continue to speak the Russian language anyway.319 The fact that the Russian press within Latvia is funded by Russian capital brings along a certain anti-democratic tendency to the media.320 The owners of the Russian media in Latvia, whom will be discussed in more detail below, try to influence the Russian audience in Latvia and to achieve political goals.321 Especially during elections in Russia, the Russian language media turn away from problems inside Russia by focussing on the outside, namely the Baltic countries.322 There is a large Russian TV channel, but there are also local media, which have close connections with the Russian state and which are very influential in Latvia.323 Accord- ing to Mozers, professor at the University of Latvia and member of the Union of Journalists,

‘these media aim at disrupting the agenda of the existing lawful power of Latvia by putting forward their own agenda of absurd and scandalous questions, in this way hampering a normal dialogue of the state power and society, and various social groups’.324

312 Ibid. 313 Interview R25. 314 B. Zepa, ‘Integration Policy in Latvia: Theory and Practice’, Socio-economic and Institutional Environment: Harmonisation in the EU Countries of Baltic Sea Rim. Proceeding of the Institute of European Studies. Interna- tional University Audentes (4), 2008, p. 133. 315 Interview R25. 316 G. Hogan-Brun, ‘At the interface of language ideology and practice; the public discourse surrounding the 2004 education reform in Latvia’, Language Policy 5 (3), 2006, p. 314. 317 Ibid., p. 324. 318 Ibid., p. 324. 319 Ibid., p. 324. 320 M. Mozers, ‘Latvian media identity and diversity’, Filosofija Sociologija 18 (4), 2007, p. 93. 321 Ibid., p. 93. 322 Interview R39. 323 Interview R71. 324 M. Mozers, ‘Latvian media identity and diversity’, Filosofija Sociologija 18 (4), 2007, p. 93. 352 PUBLIC LIFE

Mozers gives the example of the Russian language media in Latvia, which have tried to use Latvia to reach the goal of having the Russian language as an official EU working language, by trying ‘to give it a legal status of the second state language in Latvia’.325 On the other hand, the Latvian press within Latvia attempts to influence the Latvian language speaking audience and stigmatise the Russian minority, according to an article written by Ilze Brands Kehris, now chairwomen of the European Union Agency for Fundamental Rights. It portrays the Russian media support for issues such as an official status of the Rus- sian language and automatic citizenship for non-citizens as disloyal to the state and illegiti- mate.326 However, the Latvian language media has adopted a watchdog role since the end of the Soviet occupation, whereas for the Russian language media that is less true.327 It can be concluded that tensions within society are reinforced by the media. There are some possible solutions to close the gap between Latvian language and Russian language media. One solution might be the introduction of bilingual media. This has already been tried. When newspaper Diena first came out, it was published in both languages, so that both groups would get the same information. This worked for some years, but the fact that translated news was always delayed, and the fact that the market was declining, made an end to the Russian edition of the Diena.328 Another possibility is the introduction of more Russian language broadcasts on Latvian television and radio stations, so as to provide the inhabitants with the same news and messages, and in that way to compete with channels coming directly from Russia. An example of this is the programme of the public service radio Latvijas Radio 4 which transmits in the Russian language and in this way competes with another popular programme with cultural content, coming partly from Russia (‘Hits of Russia’).329 In the field of television there is for example LTV7, which also has news in the Russian language. How- ever, it is not very competitive, because Russian language news is only one small part of the channel’s programmes and it has a lot of competition from the The First Baltic Channel (PBK). The content of PBK comes almost directly (by re-telecasting) from Russia’s First Channel and REN TV, which means again a one-sided Russian (political) view on certain issues, like politics and history.330 Only when the Latvian national channels that provide some Russian language news and shows become more competitive, they can bring the two separated information spaces closer together. Besides, the two language groups might be more con-

325 Ibid., p .93. 326 EMILIE (I. Brands Kehris), ‘Cultural Diversity and National Identity, October 2009, p. 19., retrieved from: http://emilie.eliamep.gr/wp-content/uploads/2009/11/lv-integrated-report_final.pdf, consulted on 26 February 2012. 327 D. Daveluy, ‘The media landscape in the Baltic States’, http://www.inaglobal.fr/en/ideas/article/media- landscape-baltic-states?tq=11, consulted on 26 February 2012. 328 Interview R71. 329 Interview R10 330 Ibid.; interview R39. LATVIA AND THE EUROPEAN UNION 353 nected in real life than the media tend to present.331

8.5.4 Press freedom and media ownership Legal framework Like every European country, Latvia has some media legislation and regulation. Because the Baltic countries wanted a clear break from the past, in which the Communist Party dominated the entire media environment, they established a system with a very liberal regulatory environment and low state interference after independence.332 Latvia’s constitution guarantees the right to freedom of speech.333 However, journalists who are convicted of criminal libel (slander or defamation) can be sentenced to jail for three years.334 In 1991, the Law on Press and Other Mass Media was established, in which press freedom is guaranteed and censorship and monopolisation prohibited (with last amendments in 2011, regarding ownership, which will be elaborated below).335 In 1995, the Law on Tele- vision and Radio was approved, which deals with the establishment and supervision of broadcasting organisations.336 This law was replaced by the Electronic Mass Media Law in 2010. In 1998, the Latvian Information Freedom Law was enacted, which states that any person has the right to ask and receive information from the government.337 This gives journalists the possibility to submit Freedom of Information requests. Until recently, the Latvian law did not demand transparency of ownership from the different types of media, which is in contrast with other EU countries.338 However, this has changed since September 2011. Media enterprises must now register their real physical owners, which means that it cannot be a vague offshore company anymore, or an unknown person.339

331 Interview R65. 332 D. Daveluy, ‘The media landscape in the Baltic States’, retrieved from: http://www.inaglobal.fr/en/ideas/article/media-landscape-baltic-states?tq=11, consulted on 26 February 2012. 333 V. Zel*e, K. Lo*mele, O. Procevska, ‘Media Landscape: Latvia’, retrieved from: http://www.ejc.net/media_landscape/article/latvia/, consulted on 2 March 2012. 334 Center for International Media Assistance (CIMA) (E. Hume), ‘CIMA research report: Caught in the Middle: Central and Eastern European Journalism at a Crossroads’, 20 January 2011, p. 50, retrieved from: http://cima.ned.org/sites/default/files/CIMA-Central_and_Eastern_Europe-Report_6.pdf, consulted on 26 Febru- ary 2012. 335 I. Andersone, ‘Amended Law Requires Revealing Media Ownership and Confirms Editorial Independence’, retrieved from: http://merlin.obs.coe.int/iris/2011/10/article32.en.html, consulted on 2 March 2012. 336 V. Zel*e, K. Lo*mele, O. Procevska, ‘Media Landscape: Latvia’, retrieved from: http://www.ejc.net/media_landscape/article/latvia/, consulted on 12 June 2012. 337 Ibid. 338 Center for International Media Assistance (CIMA) (E. Hume), ‘CIMA research report: Caught in the Middle: Central and Eastern European Journalism at a Crossroads’, 20 January 2011, p. 50, retrieved from: http://cima.ned.org/sites/default/files/CIMA-Central_and_Eastern_Europe-Report_6.pdf, consulted on 26 Febru- ary 2012. 339 Interview R10; interview R25; interview R39. 354 PUBLIC LIFE

The National Electronic Media Council The National Electronic Media Council (Nacion#l# elektronisko pla%sazi(as l!dzek-u padome, NEPLP) is the independent institution responsible for the regulation of the Latvian radio and television sector. In the Electronic Mass Media Law it is written that ‘the National Electronic Mass Media Council is an independent, autonomous institution’ (section 57 of the Electronic Mass Media Law).340 However, they are dependent on the state budget.341 A draft law was discussed in 2010 to ensure more public involvement in this sector. The (draft of the) Elec- tronic Mass Media Law, however, suffered from a slow movement through the Saeima, because it was difficult to solve certain contradictions, inaccuracies and incomplete parts. It took so long that Latvia was eventually threatened with sanctions from the EU, because they were failing to implement the terms of its Audiovisual Media Services Directive.342 The Law eventually came in to force in August 2010. From that moment on the National Electronic Media Council was the legal successor of the National Radio and Television Council (NRTC). The NEPLP consists of five members that are nominated by the Commission of Human Rights and Public Affairs of the Saeima, after having consulted foundations that are active in the areas of mass media, education, culture, science and human rights (section 56 of the Electron- ic Mass Media Law).343 The NEPLP’s task is to make sure that the electronic mass media respect the constitution and other relevant laws. Sometimes it cooperates with institutions from other states or with the European Commission. It has to ensure freedom of speech and information within the radio and television environment. It issues and annuls broadcasting permits, deals with suggestions and complaints of the public, carries out monitoring of the electronic mass media, ensures the allocation and efficient use of the state budget resources in the interests of the public, promotes competitiveness of the electronic mass media within Europe and the world, and works in the national interests of Latvia (section 60 of the Electronic Mass Media Law).344 On the one hand, the NEPLP is the representative of the state in the country’s public service broadcasting Latvian Television and Radio, which are actually state companies.345 In other words, the NEPLP is a shareholder in public Latvian Television and public Latvian Ra- dio.346 On the other hand, the NEPLP is also the regulator of those same State companies. This might create a conflicting situation, as will be elaborated explained further below.

340 ‘Electronic mass media law’, 28 July 2010, came into effect on 11 August 2011, retrieved from: http://www.vvc.gov.lv/export/sites/default/docs/LRTA/Likumi/Electronic_Mass_Media_Law.doc, consulted on 7 April 2012. 341 V. Zel*e, K. Lo*mele, O. Procevska, ‘Media Landscape: Latvia’, retrieved from: http://www.ejc.net/media_landscape/article/latvia/, consulted on 7 April 2012. 342 I. Brik%e ed., ‘Information environment in Latvia: 2009’, Working Papers: Cummunication Studies (1), 2010, p. 11. 343 ‘Electronic mass media law’, 28 July 2010, came into effect on 11 August 2011, retrieved from: http://www.vvc.gov.lv/export/sites/default/docs/LRTA/Likumi/Electronic_Mass_Media_Law.doc, consulted on 7 April 2012. 344 Ibid. 345 Interview R10. 346 Interview R25; interview R71. LATVIA AND THE EUROPEAN UNION 355

Code of ethics With regard to journalistic ethics (the moral rules related to the profession of a journalist), the idea was to create a self-regulating system. While this led to the lack of one specific code, several media outlets have their own codes of ethics. Newspaper Diena was one of the first to establish a code of ethics in 1991, for example about fundamental responsibilities for a journalist, integrity etc.347 Several organisations for journalists have also established codes of ethics. For instance the Latvian Union for Journalists (Latvijas +urn#listu savien!ba), which tries to protect the independence of journalists and which has adopted a code of ethics in 1992. However, according to the European Journalism Centre, it has not been updated since then.348 Due to the developments in the field of digital journalism since then, it might not reflect all the relevant values with regard to digital journalism. In 2010 the Latvian Association of Journalists (Latvijas +urn#listu asoci#cijas) was founded by people who attach value to journalist ethics.349 The Association aims to promote a professional work environment and to protect and stimulate issues like freedom of speech, press freedom and transparency of ownership. It has also established a code of ethics. In addition, it supports for example the Hungarian media that protest against Hungarian laws that limit their press freedom, which is contrary to the rules of the EU.350

Press freedom in practice Being a member of the EU, Latvia is obliged to respect media freedom. In practice, the situation regarding press freedom and democratic aspects of the media is fragile. Latvia was in the 30th place in the 2010 Press Freedom Index published by Reporters Without Borders, but the situation has deteriorated dramatically and Latvia has fallen to the 50th place in the period 2011 – 2012.351 (This index ranks countries worldwide, some small countries are not taken into account). Compared to other EU Member States, only Italy, Greece and Bulgaria have a worse position. Also remarkable is the fact that Latvia’s neighbouring country Estonia is in third place. However, some experts have expressed doubts about the trustworthiness of the Latvian consultant for Reporters Without Borders, since this person also works for the newspaper Neatkar!g% R!ta Av!ze – a newspaper connected to Latvian oligarch and politician Ai- vars Lembergs.352

347 Interview R71. 348 V. Zel*e, K. Lo*mele, O. Procevska, ‘Media Landscape: Latvia’, retrieved from: http://www.ejc.net/media_landscape/article/latvia/, consulted on 2 March 2012. 349 Interview R71. 350 Latvijas +urn#listu asoci#cijas, ‘Par asoci#ciju’, retrieved from: http://www.latvijaszurnalisti.lv/par- asociaciju/ , consulted on 19 May 2012. 351 Reporters Without Borders, ‘Press Freedom Index 2011-2012’, retrieved from: http://en.rsf.org/press- freedom-index-2011-2012,1043.html, consulted on 2 March 2012. 352 Interview R39; interview R71. 356 PUBLIC LIFE

Nonetheless, experts confirm that the press freedom situation has worsened during the last few years. When we consider the press freedom score on the Freedom of the Press Index published by Freedom House, Latvia’s position has also worsened, but not as much as it has on the Press Freedom index published by Reporters Without Borders. On Freedom House’s Freedom of the Press Index, Latvia was in the 19th place in 2007, the 22nd place in 2008, the 23rd place in 2009, the 26th place in 2010 and the 26th place again in 2011.353 Freedom House still categorises the press status in Latvia as free.354 Several recent incidents help explain why Latvia’s position has deteriorated. These incidents also show that the media legislation and the assurance of freedom of speech are fragile and are not always observed. One of the most recent cases was in December 2011. Leon!ds J#kobsons, a news website owner and editor who publishes about criminal activities like crime and corruption, was arrested for posting copies of compromising e-mails that had been sent between the mayor of Riga, Nils U%akovs, and an employee of the Russian Embassy.355 These e-mails contained information that gave the strong impression that the Embassy had secretly funded the mayor’s election campaign.356 Reporters Without Borders believed that his arrest had nothing to do with a unbiased judicial procedure, but was an act of revenge from the mayor. They declared that:

‘It is unacceptable that a journalist can be jailed for an alleged media offence in a Euro- pean Union member country. The confidentiality of journalists’ sources is being seriously threatened by the seizure of all of his computer equipment and by the pressure being put on him to reveal how he obtained the emails’.357

Before this incident, J#kobsons’ site had already been the victim of cyber-attacks, but the police had not taken his complaints seriously. In April 2012, J#kobsons again became a victim, but now of an attack by two assailants who beat him and fired shots at him when he returned home from work. Reporters Without Borders condemns this attack on J#kobsons, calling it ‘clearly linked to the highly sensitive subjects of his investigative reporting’.358 The Latvian

353 Freedom House, ‘Latvia: freedom of the press 2011’, retrieved from: http://www.freedomhouse.org/report/freedom-press/2011/latvia, consulted on 19 May 2012. 354 Ibid. 355 Reporters Without Borders, ‘Website editor arrested after publishing emails linking mayor to spying and corruption’, retrieved from: http://en.rsf.org/latvia-website-editor-arrested-after-16-12-2011,41564.html, consulted on 2 March 2012. 356 Reporters Without Borders, ‘Investigative journalist badly injured in targeted attack’, retrieved from: http://en.rsf.org/latvia-investigative-journalist-badly-30-03-2012,42219.html, consulted 1 April 2012. 357 Reporters Without Borders, ‘Website editor arrested after publishing emails linking mayor to spying and corruption’, retrieved from: http://en.rsf.org/latvia-website-editor-arrested-after-16-12-2011,41564.html, consulted on 2 March 2012 358 Reporters Without Borders, ‘Investigative journalist badly injured in targeted attack’, retrieved from: http://en.rsf.org/latvia-investigative-journalist-badly-30-03-2012,42219.html, consulted 7 April 2012. LATVIA AND THE EUROPEAN UNION 357

Association of Journalists has also strongly condemned the attack.359 Another incident concerns the anti-corruption bureau KNAB, which confiscated newspapers’ files in 2011. The KNAB invaded the offices of newspaper Neatkar!g% R!ta Av!ze and its parent firm SIA Mediju Nams, and copied all the computer files without letting anyone film the invasion.360 A judge had approved the search because there were advertisements of companies that were under investigation by the judge in the newspaper.361 However, this message on the invasion was sent out by a person who, according to some experts, is not very trustworthy, since he also works for Neatkar!g% R!ta Av!ze.362 Allegedly, the newspaper was complicit in money laundering through advertisements.363 In another KNAB-related incident in September 2010, a satirical film was censored during election time. It was removed by the KNAB from the on-demand television service, because it was alleged to be electoral advertis- ing, but the filmmaker himself as well as others deny this accusation.364 In May 2010, the police invaded the house of journalist Ilze Nagla to try to find out who her sources were.365 Nagla worked for Latvian public television and had published a story about leaked government documents, in which it became clear that a state official received huge salaries, while salaries for the rest of the population were being reduced.366 She got the documents from a person who had found a leak in the electronic declaration system, and who in this way had acquired the government data.367 Nagla has brought her case to the European Court of Human Rights (ECHR), saying that her rights were violated, and the ECHR has accepted her case for review.368 Furthermore, in April 2010, media owner Grigorijs Nemcovs was murdered in Daugav- pils in what appeared to be a contract killing.369 Nemcovs was the publisher of a large regional Russian language newspaper called Million, which was involved in publishing investigative articles about government corruption.370 The incidents described above are some examples of the problems regarding journalism

359 Latvijas +urn#listu asoci#cijas, ‘Uzbrukts L+A biedram Leon!dam J#kobsonam’, retrieved from: http://www.latvijaszurnalisti.lv/, consulted on 19 May 2012. 360 Reporters Without Borders, ‘Anti-corruption police steal newspaper’s files’, retrieved from: http://en.rsf.org/lettonie-anti-corruption-squad-tampers-with-27-05-2011,40367.html, consulted on 2 March 2012. 361 Ibid. 362 Interview R39; interview R71. 363 Interview R39. 364 D. Daveluy, ‘The media landscape in the Baltic States’, retrieved from: http://www.inaglobal.fr/en/ideas/article/media-landscape-baltic-states?tq=11, consulted on 2 March 2012. 365 Freedom House, ‘Latvia: freedom of the press 2011’, retrieved from: http://www.freedomhouse.org/report/freedom-press/2011/latvia, consulted on 19 May 2012. 366 Interview R39. 367 Freedom House, ‘Latvia: freedom of the press 2011’, retrieved from: http://www.freedomhouse.org/report/freedom-press/2011/latvia, consulted on 19 May 2012. 368 Bureau of Democracy, Human Rights and Labor, ‘2011 Human Rights Reports: Latvia’, 24 May 2012, p. 8., retrieved from: http://www.state.gov/documents/organization/186581.pdf, consulted on 12 June 2012. 369 Reporters Without Borders, ‘Newspaper owner gunned down in apparent contract killing’, retrieved from: http://en.rsf.org/lettonie-newspaper-owner-gunned-down-in-18-04-2010,37062.html, consulted on 2 March 2012. 370 Freedom House, ‘Latvia: freedom of the press 2011’, retrieved from: http://www.freedomhouse.org/report/freedom-press/2011/latvia, consulted on 20 May 2012. 358 PUBLIC LIFE

and press freedom that have taken place in recent years. Although they can be considered as grave incidents, it might go too far to consider them as structural problems. It is not uncommon that presenters and journalists reporting about corruption scandals in the political and business environment are the victim of house search and dismissal.371 However, it is not an everyday practice either, it occurs occasionally.372

Media ownership Some flaws can also be found with regard to the independence and ownership of the media. There are two main factors contributing to the problems in this field. First of all, until Sep- tember 2011 the Latvian law did not require transparency of ownership from the different types of media. This has only changed recently. Now, media outlets have to register their owner, i.e. the physical person. However, the problem is that in practice this does not always happen.373 It can be noticed that newly established media do register the real owner, but old media do not, which is probably an issue of control and monitoring.374 Secondly, the financial crisis has had a negative effect. It caused a lot of changes in ownership, and the numbers of audience of especially printed press and public media declined.375 This made the media more vulnerable to political and business influences, most notably oligarchs who were able to buy for example newspapers that were in financial trouble.376 This caused a lot of professional journalists to quit their job. After the fall of communism Diena became the leading quality newspaper in Latvia. It was owned by the Swedish Bonnier group. According to the Western world it was the best newspaper of the Baltic states.377 However, the financial crisis of 2008 brought an end to the independence of some of the news media. Diena came in hands of owners with political goals in 2009. At first sight it was not even clear who the new owner was; Diena was thought to have been bought by a British company, but later it turned out Diena had been bought by Lat- vian businessman Viestrus Koziols, who is a ‘former partner and a good friend of the vice- mayor of Riga’.378 His party preference is the nationalist centre-right Par Labu Latviju, which means For Good Latvia, and the paper is allegedly not politically independent anymore.379 Other experts say that, despite the threat of political influence, the journalists currently work-

371 Reporters Without Borders, ‘Latvia’, retrieved from: http://en.rsf.org/latvia.html, consulted on 2 March 2012. 372 Freedom House, ‘Latvia: freedom of the press 2011’, retrieved from: http://www.freedomhouse.org/report/freedom-press/2011/latvia, consulted on 20 May 2012. 373 Interview R25. 374 Ibid. 375 Ibid. 376 Interview R10; interview R71. 377 Center for International Media Assistance (CIMA) (E. Hume), ‘CIMA research report: Caught in the Middle: Central and Eastern European Journalism at a Crossroads’, 20 January 2011, p. 48, retrieved from: http://cima.ned.org/sites/default/files/CIMA-Central_and_Eastern_Europe-Report_6.pdf, consulted on 4 March 2012. 378 Ibid., p. 48. 379 Ibid., p. 48. LATVIA AND THE EUROPEAN UNION 359 ing at the newspaper at least still try to protect editorial independence.380 For the editor-in- chief and several investigative journalists and writers, the unclear ownership situation and the decreased editorial independence were reasons to quit the paper.381 Some of these journalists have started a new weekly magazine called IR and an associated website, which are more accountable than the Diena newspaper under Koziols’ ownership. Diena is not the only outlet where political influence is visible; Latvian television is in some cases also influenced by For Good Latvia. For example, the ‘independent’ news department has been ordered to run stories promoting the vice-mayor of Riga.382 Furthermore, another Latvian language newspaper, Neatkar!g% R!ta Av!ze, is closely connected to oligarch Aivars Lembergs.383 Russian language media outlets have also been observed to not always be independent. Aleksandr Krasnitsky, the editor of one of the main Russian language newspapers, Telegraf, wrote a critical article in 2010, infuriating the mayor of Riga; Krasnitsky was fired as a result. After this incident Telegraf got a new owner, but the real ownership is still not clear.384 Ac- cording to The Economist the owner of the Telegraf is now a controversial Russian businessman, Olegs Stepanovs, the co-owner of a big local oil company and sponsor of the centre-left party Concord Centre.385 A trend that can be seen in both Russian and Latvian language media is that before and during election campaigns, some of the media become campaign instruments for political parties.386 Also at a regional level, there is an example which demonstrates the problems with regard to ownership. In 2009, a large share of Latgale Radio (owned by SIA MG Latgolys Bolss) was sold.387 Latgale radio used to be a radio station which transmitted for the most part songs and programmes in the Lattigalian language. However, the new owners demanded that the new content of the radio station had to be in Russian, which was contrary to the rules and regulations of the National Radio and Television Council, that had stated that: ‘only 40 % of the broadcast content can be presented in languages other than Lattigalian or Latvian’.388 An- other shareholder was not pleased with the situation and asked the public to help him in his

380 Interview R39. 381 Interview R71. 382 Center for International Media Assistance (CIMA) (E. Hume), ‘CIMA research report: Caught in the Middle: Central and Eastern European Journalism at a Crossroads’, 20 January 2011, p. 49, retrieved from: http://cima.ned.org/sites/default/files/CIMA-Central_and_Eastern_Europe-Report_6.pdf, consulted on 4 March 2012. 383 Interview R39. 384 Center for International Media Assistance (CIMA) (E. Hume), ‘CIMA research report: Caught in the Middle: Central and Eastern European Journalism at a Crossroads’, 20 January 2011, p. 49, retrieved from: http://cima.ned.org/sites/default/files/CIMA-Central_and_Eastern_Europe-Report_6.pdf, consulted on 4 March 2012. 385 Author unknown, ‘Latvia: Elections under a cloud’, retrieved from: http://www.economist.com/blogs/easternapproaches/2010/09/latvia, consulted on 1 April 2012. 386 Interview R10. 387 I. Brik%e ed., ‘Information environment in Latvia: 2009’, Working Papers: Communication Studies (1), 2010, p. 8. 388 Ibid., p. 8. 360 PUBLIC LIFE

battle for the restoration and preservation of the radio station as a real Lattigalian station, with support from Lattigalian artists. The public protest against the ‘Russification’ of the media and culture in Latgale eventually led the National Radio and Television Council to agree to monitor the content of the programmes transmitted by the radio station.389 Since then the ownership has changed again, and the station is now in the hands of the R&zekne-Aglona diocese of the Catholic Church.390

Shortcomings and possible remedies It is clear that there is room for improvement. For example, improvement is needed in the field of control. As mentioned above, the NEPLP has a double function: it has to regulate and supervise all the electronic media, but at the same time it is the shareholder of public Latvian television and radio.391 This makes it hard for the NEPLP to work independently, so a clearer division of activities and responsibilities could lead to improvement. Also, they have a lot of tasks, but there are only five Council Members. There are only two persons in the monitoring centre, who have to monitor all national, regional and local electronic media, which is almost impossible. Thus, there is a need for more financial as well as administrative capacity.392 Another field of improvement regards the way in which journalists are organised. Cur- rently, there is more than one journalist organisation. Not even all the journalists are in those organisations, and not all journalists have the same views on certain issues, like journalistic ethics.393 If they would be more united, their position within society could improve. The issue of having difficulties with uniting themselves might be related to the Soviet past.394 Another important field where improvements can be made is in the mentality of the Lat- vian public and political elite. Latvian politicians do not always see the importance of independent media. This might also be connected to the Soviet past, since many politicians grew up when Latvia was still under Soviet occupation.395 More time is needed to change this way of thinking, although there are signs that Latvia is gradually on its way to establish a real democratic media landscape, step by step. Not only the politicians need a change of mind, but also the general public. Latvians are generally characterised as reserved and timid, expecting others to come up with solutions or ideas.396 This might prevent necessary changes in society. However, there are definitely signs of improvement as far as media independence is concerned. The Baltic Center for Investigative Journalism (BCIJ) and magazines like IR focus on qualitative journalism.397 The BCIJ tries to stimulate Latvians to take action instead of pa-

389 Ibid., p. 8. 390 Ibid., p. 8. 391 Interview R25. 392 Interview R10. 393 Interview R25. 394 Ibid. 395 Ibid. 396 Interview R39. 397 Center for International Media Assistance (CIMA) (E. Hume), ‘CIMA research report: Caught in the Middle: LATVIA AND THE EUROPEAN UNION 361 tiently waiting.398 Also, the BCIJ has recently organised a conference for journalists from different countries, where they could share ideas and share the stories they have been working on. Other initiatives come for example from the Latvian Association of Journalists, which has established a new code of journalist ethics. They bring the topic ‘media’ more in the news, which previously was not the case.399 This makes the public more aware of ‘the media’. Members of the Association also talk to parliamentary committees, trying to convince the government to change or introduce laws, so as to protect the independent and free position of journalists.400 Education also contributes to the improvement of the situation in the Latvian media landscape. Journalism students are now made familiar with tools and ideas that for a very long time where not known or used, such as spread sheets, data-driven journalism or editing movies.401 These same students will be lectured in a post-Soviet setting with ample attention for the rules and standards of the EU. In this way they will adopt different viewpoints about qualitative journalism than the previous generation.402 In summary, there are definitely signs of improvement as regards freedom of the press in Latvia. How this process will continue depends on a combination of the initiatives of the citizens, the Latvian government and the support of the EU for these kinds of initiatives.

8.5.5 Latvian media coverage of the European Union When Latvia was about to access the EU, there was much attention for the EU in the different types of media. The attention focused mostly on one abstract issue and on several rather practical issues. The abstract issue was the following: worries were expressed about accessing another Union. Latvia had been part of the Soviet Union for 50 years, and people feared the fact that they were about to join another union.403 However, the attention to the EU funds, i.e. the money that Latvia could get, made the people feel more at ease.404 On a more practical level people were worried about things such as salt. Latvia had a kind of salt that people used to marinate their cucumbers with, but this type of salt did not meet the requirements that the EU had attached to salt.405 Furthermore, there was also attention in the media for the wave of migration, i.e. Latvians leaving the country to work in Eng-

Central and Eastern European Journalism at a Crossroads’, 20 January 2011, p. 51, retrieved from: http://cima.ned.org/sites/default/files/CIMA-Central_and_Eastern_Europe-Report_6.pdf, consulted on 1 June 2012. 398 Interview R39. 399 Interview R25. 400 Interview R39. 401 Ibid. 402 Interview R25. 403 Interview R39. 404 Ibid. 405 Ibid. 362 PUBLIC LIFE

land or Ireland.406 There was a division between Latvian language and Russian language media with regard to the attention for Latvia’s accession to the EU in 2004. For example, the Latvian language newspaper Diena was in favour of EU accession and had editorials on the front page about the EU.407 In the Latvian language media the stance towards the EU was between neutral and positive. On the other hand, the Russian language media had a more sceptical view on Lat- via’s accession to the EU.408 This trend was reflected in the eventual voting patterns, where especially members of the Russian-speaking minority voted against accession. Nowadays there is attention for the EU in two ways. On one side, EU related topics can be part of any Latvian television or radio programme, for instance news programmes or political programmes, or of any article in any newspaper.409 Still, the fact that it can be part of any programme does not mean that it always is. On the other side, there are also special EU programmes on Latvian radio and television, such as ‘Here in Europe’, which is broadcast every Friday. However, these kinds of programmes are not very popular.410 There are also special programmes about Latvian MEPs. Every MEP has a budget for PR actions and they spend it on some national and regional radio stations, where ten-minute programmes are made about these parliamentarians.411 Some experts consider the programmes about the EU (and partly funded by the EU) to be too propagandistic.412 There are four main EU-related topics that get attention in the Latvian media nowadays. The first and most important topic are the (structural) funds of the EU for which Latvia quali- fies.413 There are articles and news messages that cover how Latvia spends European money and whether Latvia can get more funds. Secondly, there is attention for the euro crisis in combination with Latvia’s accession to the Eurozone in 2014. Recently, the magazine IR wrote an article about the Eurozone; the magazine receives some money from an EU programme to write about EU topics from time to time.414 Thirdly, the media cover issues of the European Court of Justice, because many Latvians send complaints to it.415 Finally, the EU is in the news when Latvian ministers or parliamentarians have meetings with European officials.416 When everything runs well within the EU there is not much attention for it in the media. However, when things go wrong, when there is a scandal or a crisis, the attention increases417

406 Ibid. 407 Interview R71. 408 Ibid. 409 Interview R10. 410 Interview R25. 411 Ibid. 412 Interview R10. 413 Interview R25. 414 Interview R71; interview R10. 415 Interview R25. 416 Ibid. 417 Interview R65. LATVIA AND THE EUROPEAN UNION 363 and the EU is often the scapegoat.418 This is a pattern that can be seen all around Europe.419

8.6 Conclusion

This chapter has combined three aspects of Latvia’s society to give an overview of modern day Latvia. Although there are big differences between these topics, all three bear the marks of the Soviet occupation, albeit to a different extent. After the independence of 1991 the Lat- vian media had to learn how to cope with a democratic environment with a market system, a process which in some ways is still on-going. Although Latvia is considered to have a free press environment, with rules and laws to protect the media, there are some cases that show that, in practice, there is much room for improvement, for instance with regard to freedom of speech, the protection of journalists and the independence of the media. Furthermore, a clear division between Russian-speaking and Latvian-speaking media is visible. This division provides the different language groups with coloured views on events happening in the Latvian society, potentially further increasing the tensions between the two groups. However, initiatives that are carried out right now might pave the way for a real break with the Soviet past and the installation of a more democratic media landscape. Regarding the educational system, the biggest issue revolves around the role of the Rus- sian language in Latvian education. Although there are new regulations limiting the usage of languages other than Latvian, this regulation only seems to have increased the gap between the two groups. The more successful changes in the educational systems will hopefully mark the beginning of further improvements in the areas of efficiency and transparency. Depending on the way in which these issues will be tackled, Latvia’s educational system might falter, or improve to the standards to which it is aiming for. Although there may be problems between the ethnic Latvians and the Russian-speaking minority, when it comes to health care, the constitution states that everyone has the same rights and is covered by the same insurance. This also includes the stateless minority. The Latvian health care systems is financed by tax revenues and patient payments, which can be official payments, such as co-payment fees for a consult or for care provided without a refer- ral, or unofficial payments, for instance to avoid a long waiting time. Since 1991 a lot of reforms have been carried out in the Latvian health sector to restruc- ture it, whereby it learned from the health sectors in Western Europe. Despite these reforms, Latvian faces many challenges today, such as inequity in access to health care services, a small state budget, shortage of personnel, a low life expectancy and a high mortality rate as a consequence of unhealthy lifestyles, diseases and a lack of knowledge about safeguarding one’s health. Additionally, the right the patient has to confidentiality and privacy are not always adhered to, and considerable problems arise with regards to the Russian-speaking mi-

418 Interview D07. 419 Interview R65. 364 PUBLIC LIFE

nority and the right to information. However, the Ministry of Health has recognised these problems and is working in close cooperation with the WHO and the EU to tackle them. Alt- hough much has been achieved, there is still much left to be done in the future. It remains to be seen, however, if all the projected plans and regulations will have the desired effect: success depends on whether they will actually be implemented and carried out, and the past has shown that a clear commitment does not always lead to concrete actions. LATVIA AND THE EUROPEAN UNION 365

9. Conclusion

This report has presented a broad and interdisciplinary analysis of the Republic of Latvia, its people and its position in the European Union. While Latvia’s re-integration into the international community has greatly improved security, stability and prosperity, its transition process has also institutionalised certain social inequalities and a lack of participatory citizenship.

Centuries of occupation by Germany, Sweden, Poland and Russia have left deep cultural and demographic marks on Latvia. Different groups in society have diametrically opposing perceptions of Latvia’s history, which to this day leads to divisions and tensions along ethnic lines. In this sense, Latvia is locked in its own history, and the scars that the Nazi and Soviet occupation have left may simply take longer than one generation to heal. Latvia is known to be inhabited since 9000 B.C. The first foreign powers to obtain dominance in the region were the Germans, around the year 1200. In the following six centuries, the control over Latvian territory shifted from the Germans to the Swedes and Poles, and finally the Russians, whom the Latvians eventually fought in their struggle for independence. This independence was proclaimed on 18 November 1918, but was short lived. From 1940 until 1991, Latvia went through periods of Soviet and Nazi-German occupation, and both occupations left severe scars on Latvia and its citizens. Nevertheless, some people still feel nostalgic towards the Soviet times, as life appeared more stable - with a guarantee for work and health care - than it does to date in these times of worldwide economic crisis. The ethnic composition of Latvia’s population, of which the Russian speaking minority forms one third, is a constant reminder of Latvia’s turbulent history. The different historical memories of a large part of the Russian speaking citizens and the ethnic Latvians have led to serious history-oriented debates. These debates have contributed to a division in Latvia’s society along ethnic lines. Efforts have been made to bring these different perceptions closer together, for instance through the establishment of the Russian-Latvian history commission in 2011. However, whether these efforts are sufficient to close the societal gap and avoid another turbulent chapter in Latvia’s history in the future, is too soon to say.

Due to the history of foreign occupations, Latvians cannot rely, to the extent that other nations can, on traditional elements such as religion or cultural expressions as a foundation for their identity. The main source for identity is the Latvian language, which explains why the presence of a large Russian-speaking minority in Latvia is such a problematic issue. The 2012 referendum on making Russian the second official language is a prime example of how this cultural issue has become politicised, and how it is further aggravated by the media. Nonethe- less, the new post-Soviet generation might usher in a climate of better mutual understanding. Despite of the occupations of foreign powers throughout the centuries, a characteristic 366 CONCLUSION

Latvian culture has developed. Today’s Latvian culture contains traces from former rulers; the most reflected influence comes from the German culture, which has actually integrated in the Latvian culture. The influence of the Russian culture is also present, but exists separetly from the Latvian one. From the side of the ethnic Latvian population, the Latvian language is considered as the most important component of Latvian culture. Also Latvian dance, music and folkore are important, because these have survived the years of foreign occupations and are therefore perceived as uniquely Latvian. In contrast to that, religion does not form an important component of Latvian culture, because there is no state religion and the religious composition is highly diversified. Architecture and art flows in Latvia have been represented as in other European countries, while Latvian literature does not play as important a role as in it does in other Eu- ropean countries. However, these cultural components are mainly a reflection of the ethnically Latvian part of the population. The presence of a large Russian-speaking minority in the country makes culture a controversial topic in Latvian society. Proof of this controversy is the referendum of February 2012 about making the Russian language the second official state language. En- hanced emphasis on the multi-cultural character of the Latvian society is required. The signing of the European Charter for Regional or Minority Languages would be a signal of approach towards the Russian-speaking minority. While the multicultural situation in Latvia causes frictions nowadays, there is also perspective on relaxation in the near future. Perhaps the best indication for more relaxation is the fact that the next generations of Latvia grew and grow up in independent Latvia. The next generations are all Latvian-speaking, so the problem that some Russian-speakers do not speak Latvian will resolve itself. We conclude that Latvia lacks a full acceptation of the multicultural situation in the country. Too much emphasis on assimilation of the Russian-speaking community seems to polarise the society and does not have the desirable effect. Nevertheless, optimistic prospects for the furure can be recognised; probably the younger generation will reduce the gap between different cultural identities within the Republic of Latvia.

Latvia’s legal and rule of law framework have tremendously improved since the end of Soviet occupation, but challenges remain. Most pressingly, the gap between legislation on paper and its practical implementation needs to be bridged. Courts are overburdened, there is considerable corruption, and the transition to a modern and European judicial practice has still not been completed. In addition, some systematic violations of human rights, especially regarding national and social minorities, need to be addressed. While Latvia’s constitution provides for a parliamentary democracy with full respect for the rule of law, several challenges remain in this area. Access to justice is considered to be good in Latvia. However, this accessibility creates a problem of overload of certain courts. In order to improve the situation, one may consider expanding the capacity for written proceed- LATVIA AND THE EUROPEAN UNION 367 ings, putting a halt on appeal possibilities for smaller cases, or installing more separate divisions in certain courts to make judges even more specialised. As far as the separation of powers is concerned, this is considered to be insufficient. However, Latvia has already made first steps towards improvement; for example by the creation of an independent judicial council which will take over the responsibility of the Ministry of Justice for the budget planning of the courts. Corruption also remains a problem in Latvia, partly because of the younger generation who perceive corruption as something positive. Yet, efforts of the civil society and KNAB, combined with the relatively strong anti-corruption legal framework, might lead to less corruption distribution in the future. In the field of human rights, the lack of knowledge of international and European legislation among judges is still an obstacle to correct application of legal norms in compliance with international standards. Furthermore, there are still some systematic violations of human rights, especially regarding social and ethnic minorities. For instance, same-sex couples are not allowed to marry and thus do not share the same level of protection as married couples do. Moreover, their right of assembly has been jeopardised several times by the Riga City Coun- cil. Also, the right of national minorities to speak their own language is at odds with the pro- tective measures taken by the government regarding the Latvian language, creating an un- pleasant situation for the Russian speaking minority. In addition, discrimination occurs between men and women in terms of monthly wages, which are considerably lower for women than men in Latvia. A final problematic matter Latvia faces, relates to the fact that Latvia has not transposed all elements of EU anti-discrimination directives, which results in an incomplete protection for the victims of discrimination.

Latvians have little trust in their government, which might in part be explained by the country’s chronic political instability. However, the recent economic crisis has helped to consoli- date the national political landscape, which seems to have had a modestly reassuring effect on public opinion. As far as foreign policy is concerned, both Latvia’s internal situation and its full integration into the EU and NATO have left its relationship with Russia rather tense. Fur- thermore, Latvia’s political elite is anxious to make the country part of ‘core Europe’, while the majority of voters either disapprove of the EU or are simply indifferent. In general, it can be said that Latvians are sceptical towards their government and are not yet convinced of the benefits of democracy. During the field research in Latvia people from different backgrounds and working in different fields often mentioned, that the Latvian governments have generally been occupied with short-term solutions and have lacked the vision to form a long-term vision. It must be said, however, that trust in the current government is higher than the level of trust in previous governments. Despite this positive trend, Latvia’s satisfaction with democracy is still ranked as one of the lowest in Europe. This might be linked to the turbulent political landscape. The country has seen many dif- 368 CONCLUSION

ferent, center-right governments in the past two decades, which were often dismissed due to cases of corruption. However, in recent years, national politics have somewhat stabilised. Perhaps the current government can make the first steps towards making Latvia a consolidated and trustworthy democracy. Latvia’s place on the international scene has been predominantly determined by its choice to join all the international organisations since its independence. After ten years of EU membership, Latvia has matured as a Member State: it now knows its role and position and understands how things work in Brussels. The country is a net-receiver of many EU funds, which has already led to far-reaching development of the country. The next years will show whether a two-speed Europe will evolve. In the case of this happening, Latvia is very eager to remain in ‘Core Europe’. However, this might become difficult, regarding Latvia’s arrears in several sectors. Nonetheless, the country claims to lead the way regarding fiscal austerity, referring to the way Latvia solved its own financial crisis. It is too early to define Latvia’s foreign relations and goals in a few sentences, but one can carefully state that Latvia’s role in the world has been largely influenced by its former ‘occupier’, Russia. The role that Russia played during Soviet occupation of Latvia and in the two decades after that, has shaped Latvian foreign relations, leading them to seek economic and military security by joining ‘Western’-oriented international organisations and by working closely with its neighbours. Latvia is trying to find its position in the international arena and is therefore setting high ambitions for itself for the near future. Looking back at what Latvia has achieved in the last two decades, these ambitions will most likely be achieved in a matter of years. The role of Russia, however, must not be underestimated, since both countries are intrin- sically linked by its shared history, culture, economy and society. Although grievances about historical events and interpretations still differ, Latvia has to acknowledge that Russia still plays an important role, since, in an interdependent world, a country as strong as Russia simply cannot be ignored.

After a 25 % drop in GDP in 2009 and severe fiscal consolidation, the Latvian economy has now more or less recovered from the global financial and economic crisis, as well as from the implosion of its real estate sector. However, the fundamentals of Latvia’s economy are rather weak. The service sector is highly dependent on international markets, while the manufacturing sector is highly underdeveloped due to a lack of value-adding production. This is related to Latvia’s chronic lack of highly educated workers. Finally, for both economic and historical reasons, Latvia has a minimalistic system of social welfare. These issues are being remedied through EU structural funds, but these do not provide a quick solution. Latvia’s economy seems to have recovered from the crisis: GDP is growing, unemployment is declining, and public finances seem to be returning to levels within the Maastricht criteria. Officials are optimistic about meeting the 2014 deadline to introduce the euro, alt- LATVIA AND THE EUROPEAN UNION 369 hough especially high inflation remains an obstacle on the road towards Eurozone accession. While Latvia’s economic reliance on services (trade in particular) makes it vulnerable to fluctuations in the global market, it also provides rapid growth opportunities. Perhaps the largest growth potential is found in the forestry sector, which so far is mostly based on raw exports. Value-adding technologies for both manufacturing and green energy purposes would introduce significant opportunities, not least to solidify Latvia’s position as a green energy leader. EU structural funds are being employed to help advance this process and to modernise the agricultural sector, but the current proposals for both structural funds and CAP financing are highly disadvantageous for Latvia. A strong political push must be made in Brussels to ensure these growth potentials are not undermined by a lack of EU funding after 2013. The crisis has provided an opportunity to extensively reform Latvia’s labour market and its social security system. However, the weak position of trade unions and the relatively low level of organisation among employers are obstacles for deep social dialogue. Combined with a post-Soviet heritage of ‘cheating the system’, these factors lead to a large shadow economy and hazardous labour conditions, among others. A more inclusive and representative social dialogue is required to help formulate Latvia’s socioeconomic policies for the 21st century, especially considering the demographic challenges of a shrinking and aging population. Most pressingly, we conclude that Latvia lacks a comprehensive long-term vision on how it can attain Western levels of prosperity and development. While the significant influx of EU funds has necessitated the formulation of strategic macroeconomic policy priorities, this way of thinking does not (yet) seem to have permeated all levels of economic governance. None- theless, some crucial opportunities for long-term development can be identified; the most notable are investing in human capital and infrastructure, the development of value-adding technology, and the green energy sector.

Latvia’s public life is still strongly influenced by its heritage from the Soviet occupation. Pub- lic education and health care facilities are persistently underfunded and access is to some degree unequal. Language issues are again an important factor, causing frictions in both these public services. These issues also play a big role in Latvia’s media landscape, which essentially is completely divided between Latvian-speaking and Russian-speaking audiences. Fur- thermore, several problems regarding the freedom and independence of Latvia’s press have recently surfaced. After the independence of 1991 the Latvian media had to learn how to cope with a democratic environment with a market system, a process which in some ways is still on-going. Alt- hough Latvia is considered to have a free press environment, with rules and laws to protect the media, there are some cases that show that, in practice, there is much room for improvement, for instance with regard to freedom of speech, the protection of journalists and the independence of the media. Furthermore, a clear division between Russian-speaking and Latvi- an-speaking media is visible. This division provides the different language groups with col- 370 CONCLUSION

oured views on events happening in the Latvian society, potentially further increasing the tensions between the two groups. However, initiatives that are carried out right now might pave the way for a real break with the Soviet past and the installation of a more democratic media landscape. Regarding the educational system, the biggest issue revolves around the role of the Rus- sian language in Latvian education. Although there are new regulations limiting the usage of languages other than Latvian, this regulation only seems to have increased the gap between the two groups. The more successful changes in the educational systems will hopefully mark the beginning of further improvements in the areas of efficiency and transparency. Depending on the way in which these issues will be tackled, Latvia’s educational system might falter, or improve to the standards to which it is aiming for. Although there may be problems between the ethnic Latvians and the Russian-speaking minority, when it comes to health care, the constitution states that everyone has the same rights and is covered by the same insurance. This also includes the stateless minority. The Latvian health care systems is financed by tax revenues and patient payments, which can be official payments, such as co-payment fees for a consult or for care provided without a refer- ral, or unofficial payments, for instance to avoid a long waiting time. Since 1991 a lot of reforms have been carried out in the Latvian health sector to restruc- ture it, whereby it learned from the health sectors in Western Europe. Despite these reforms, Latvian faces many challenges today, such as inequity in inequity in access to health care services, a small state budget, shortage of personnel, a low life expectancy and a high mortality rate as a consequence of unhealthy lifestyles, diseases and a lack of knowledge about safeguarding one’s health. Additionally, the right the patient has to confidentiality and privacy are not always adhered to, and considerable problems arise with regards to the Russian-speaking minority and the right to information. However, the Ministry of Health has recognised these problems and is working in close cooperation with the WHO and the EU to tackle them. Alt- hough much has been achieved, there is still much left to be done in the future. It remains to be seen, however, if all the projected plans and regulations will have the desired effect: success depends on whether they will actually be implemented and carried out, and the past has shown that a clear commitment does not always lead to concrete actions.

* *

From our analysis of Latvia’s internal and external situation, we can summarise the great challenge Latvia faces in the coming decades: to create a truly inclusive society, fully respecting human rights and with citizens that look beyond their own private sphere. Now that Latvia is stable and secure, it must have a strategic vision for its future in Europe and the world – a vision which, so far, is lacking. LATVIA AND THE EUROPEAN UNION 371

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