AGP Executive Report

Financial Stability: Latvia’s central bank published its annual Financial Stability Report in English, warning that delays in improving the return on public spending are pushing up risks, with rising public debt and possible sharp fiscal (including tax) changes. EU Funding Push: Finance Minister Māris Kučinskis met Bank of Latvia governor Mārtiņš Kazāks to align Latvia’s priorities for the 2028–2034 EU funds cycle, after receiving proposals worth over €35bn for an indicative envelope of about €9.3bn. Defence Costs at EU Level: Ahead of the Oct. 3 election, Latvia is pressing the EU for €7bn to cover defence spending and fallout from Russia’s war. Drones and Border Security: Latvia says a drone shot down over its territory came from Belarus, with NATO jets responding after Russian jamming; meanwhile, border authorities report thousands of prevented illegal crossings since the year began. airBaltic Crisis: Latvian public media reports creditors will decide airBaltic’s next steps, as the airline seeks restructuring support and new interim financing. Cyber & Scams: Swedbank warns of renewed scam emails; Latvian State Forests says a cyber attack stemmed from an unpatched vulnerability. Local Life: Central Statistical Bureau data shows Latvians spent €619 per household member monthly on essentials in 2025, with food the biggest share.

Baltic Security & Drones: NATO jets kept busy as a suspected Russian drone was shot down over Latvia after an airspace breach linked to “Russian electromagnetic warfare,” while Romania also reported a drone intercept near the Ukraine/Moldova border. Ukraine-Russia Strikes: Ukraine launched one of its largest drone waves against Russia, with Moscow reporting hundreds of drones intercepted and a major fire at a Wildberries warehouse; both sides also reported fresh civilian casualties from missile and drone attacks. Local Governance & Culture: Riga marked its 825th anniversary with major public events, including a city-wide birthday concert “My Musical Score Riga.” Education & Science: The University of Latvia Foundation received nearly €799,000 from MikroTik to fund research grants and scholarships for future teachers and science students. Sports & Community: Latvia’s Jelena Ostapenko was knocked out in Cincinnati as Rybakina advanced; meanwhile, Latvia’s region stayed in the spotlight with international beach volleyball and a big corgi festival in Vilnius featuring competitors from Latvia.

Baltic Air Policing & Drone Threats: NATO jets again intercepted drones near the region’s borders, with a Spanish F-18 shooting down a drone over Romania after it entered from Moldova; debris fell in an unpopulated area near Galați, underscoring how Russia’s war spillover keeps testing Eastern flank airspace. Latvia Security Debate: Lithuania’s PM said the Latvia drone incident “cannot be ruled out” as a possible false-flag, while Latvia’s military maintains the shootdown followed a perceived danger from a drone violating its airspace. Ukraine–Russia Escalation: Ukraine launched hundreds of drones toward Moscow as Russian missile strikes hit multiple Ukrainian cities, with officials reporting deaths and injuries. Rīga 825 Celebrations: Rīga’s 825th birthday concert “My Musical Score Rīga” is set for Saturday night, with live coverage on LTV1 and online platforms. Sports (Latvia): Patriks Gailums won European javelin bronze; Riga FC’s women’s team clinched the Latvian Premier League with a perfect 21-0 run; Latvia’s U-16 boys won European basketball gold.

Baltic Air Security: NATO jets shot down a drone that entered Latvian airspace near the Russian border, with Latvia saying it was likely pushed in via Russian electronic warfare; the incident sparked airspace alerts and later a controlled explosion to clear debris. False-Flag Debate: Lithuania’s prime minister said a “false flag” scenario can’t be ruled out, but stressed there’s no evidence yet since wreckage hasn’t been found. Ukrainian War Evidence in Museums: Ukraine approved free transfers of captured/destroyed Russian T-72 tanks to museums in Lithuania, Latvia, Estonia, Denmark and the Netherlands for exhibition and documentation. Local Safety Incident: A small flying craft reportedly crashed into the sea near Jūrmala; one person was rescued and responders found no oil leaks. Sports Spotlight: Latvia’s U-16 basketball team won European gold in Romania, while Riga FC’s women’s side clinched the Latvian Premier League with a perfect 21-0 run. India Independence Day Link: Latvia was among countries where India’s “Suryapath Tiranga” tricolour relay was hoisted as part of Har Ghar Tiranga.

Baltic Air Policing: NATO jets shot down a foreign drone that entered Latvian airspace near the Russian border, with Latvia saying it was pushed in by Russian electromagnetic warfare; air alerts were issued in several eastern municipalities before being lifted, and crews are now searching for wreckage near Rugāji in Balvi district. Counter-Drone Testing: Latvia tested interceptor drone and counter-UAV systems during NATO Baltic Trust 26 at the Sēlija training ground, including trials that let military command delegate drone engagement to industry partners. Ukraine War Spillover: Ukraine’s Cabinet approved a mechanism to transfer destroyed Russian T-72 tanks to museums in Lithuania, Latvia, Estonia, Denmark and the Netherlands, aiming to document the war’s impact. Border Security: Latvia reported the discovery of a migrant tunnel from Belarus after migrants were found near the border fence, as authorities warn of continued “hybrid” infiltration risks. International Diplomacy: Latvia and other countries sent greetings to India on its 80th Independence Day, highlighting growing strategic and economic ties. Fact Check: A viral claim that Euronews reported a Ukrainian gunman killed NATO soldiers in Latvia during a drill was denied as false.

Baltic Air Policing: NATO jets shot down a foreign drone that entered Latvian airspace near the Russian border, triggering early-morning alerts in several eastern municipalities; Latvia says the incursion was likely caused by Russian electronic warfare, and a search is underway for wreckage. Counter-Drone Readiness: Latvia tested interceptor drone and counter-drone systems at the Sēlija training ground during NATO Baltic Trust 26, with about 650 participants and industry partners trialing how detection and engagement can be coordinated. Ukraine War Spillover: Ukraine approved a plan to transfer captured Russian T-72 tanks to museums in Lithuania, Latvia, Estonia, Denmark and the Netherlands, while reports also link the broader drone pressure to attacks on Russian ports such as Ust-Luga. Regional Security: Poland and the Baltic states are tightening protection of critical infrastructure amid fears of Russian “false-flag” sabotage using drones. Business & Local Life: Latvia’s government is preparing to buy more airBaltic bonds and extend state loan repayment; separately, AS Recipe Plus is investing €20m in a new Riga pharmaceutical logistics centre.

Baltic Air Policing: NATO jets scrambled after a foreign drone entered Latvian airspace early Friday, with Italian Eurofighters shooting it down over Balvi municipality; Latvia says the incursion was likely caused by Russian electronic warfare, debris searches are under way, and an air warning was lifted after the threat ended. Cross-border security: Finland temporarily restricted aviation and maritime traffic in the eastern Gulf of Finland as a precaution, while NATO said an investigation is ongoing and aircraft were operating under alliance command. Ukraine war spillover: The drone incident came alongside reports of Ukrainian drone strikes hitting Russia’s Baltic oil hub Ust-Luga, where a major fire disrupted operations, as well as fresh Russian strikes in Ukraine that killed a woman and her 9-year-old son and added to July’s record civilian toll. Local resilience: Latvia’s Defence Minister said the drone was destroyed to prevent danger to residents, noting there was no guarantee it would crash harmlessly. Business & health infrastructure: Riga-based AS “Recipe Plus” is building a large medicine logistics centre, investing €20m and targeting completion in spring 2027 to boost pharmaceutical supply resilience. Culture: A centenary exhibition of Latvian émigré artist Raimonds Staprāns opens in Riga’s National Museum of Art, running through January 2027.

Baltic Security: Lithuania approved an expanded border defense plan, adding a 20-meter counter-mobility strip (up to 150 meters in key zones) and expanding obstacle “engineering parks” from 27 to 50, with completion pushed to end-2028 as NATO prepares for possible Russian escalation. Cyber & Crime: Riga Airport customs breaches are up, with more illegal cigarette/alcohol imports and more drug-smuggling attempts; separately, Latvia’s Road Traffic Safety Directorate (CSDD) reported a cyber attack that exposed historical payment receipt data. airBaltic Crisis: Prime Minister Andris Kulbergs says airBaltic’s future depends on creditors; the airline plans to cut its A220 fleet to about 36 by end-2026 and raise €225m in bridge financing. Local Life in Riga: Alberta Street and parts of Antonijas Street become pedestrian-only on weekends (Aug 14–Sep 20). Economy & Society: A petition on ManaBalss.lv seeks to scrap MPs’ transport and rent allowances; Eurostat shows Latvia’s overall price level still below the EU average, but food and some essentials are already near Western European levels. Ukraine Support: Latvia launches a charity campaign to fund rehabilitation for wounded Ukrainian service members.

Iran Executions Diplomacy: Latvia and a broad group of countries condemned Iran’s alleged executions of protesters and use of the death penalty, prompting Iran’s FM Abbas Araghchi to accuse France and others of “blatant hypocrisy.” Riga Security & Crime: Latvian and international police teamed up to target crypto fraudsters tied to scam call centers, with a second phase netting suspects and losses over €200,000. Competition Watchdog: Latvia’s Competition Council fined state forestry firm LVM about €7.86m for giving long-term logging partners unjustified advantages outside public auctions. Border Pressure: Latvia says it has found its first documented migrant tunnel under the Belarus border, after 15 people were intercepted; authorities are stepping up surveillance and cooperation. airBaltic Financial Turn: airBaltic unveiled a new Riga-centered business plan and is cutting its A220 fleet, while bond prices have plunged and a key 17 August vote looms. Everyday Costs: Eurostat shows Latvia is no longer among the cheapest EU countries for some essentials like food, clothing, and alcohol, even as overall prices remain below the EU average. National Guard Anniversary: Riga will host a free concert and events marking the National Guard’s 35th anniversary at the Freedom Monument on 23 August.

Latvia–Belarus Border Security: Latvian border guards found an underground tunnel near the Belarus frontier and detained 15 people who used it to cross illegally; all were sent back to Belarus, marking the first known tunnel use in that specific area. Air Defense Procurement: Prime Minister Andris Kulbergs said Latvia bought anti-drone systems but “forgot” to procure the ammunition, raising questions about readiness after prior drone incursions. Regional Russia Risk: US intelligence warned Europe about possible Russian “hybrid” operations, including sabotage and false-flag actions, with Poland and the Baltic states highlighted. Latvia’s Drone Countermeasures: Latvia is assessing light combat aircraft to intercept drones, with Embraer’s A-29 Super Tucano among options. Transport & Tourism: Riga’s port began partial demolition of the ED dam to expand access for larger cruise ships, aiming for more calls in the city centre. Public Health: England’s NHS reported over 100,000 people treated for hepatitis C since 2015, with Latvia among the countries whose residents are urged to test. Business & Travel: airBaltic plans to cut its A220 fleet to about 36 aircraft by end-2026 and focus routes from Riga, seeking €225m bridge financing. Culture: Riga’s 825th birthday will feature an Auto Union V16 parade drive and display at the Freedom Monument.

Riga 825th birthday tourism boost: The city is set to welcome the Auto Union Type C parade drive, with the legendary Audi racing driver Dindo Capello piloting the car through Riga and a special presentation at the Freedom Monument. Public transport for students: Rīga is reminding parents to apply for the Student Card by Aug 25 so it’s ready for the new school year; the card also works as a public transport pass. airBaltic restructuring: The airline says the war and engine supply issues have forced a major plan change, cutting its Airbus A220 fleet by about a third and focusing routes in Riga, alongside €225m bridge financing. Border security: Latvia has launched coordinated operations (“Vilkatis”/“Werewolf”) to curb illegal migration from Belarus, including intelligence-sharing with neighboring states. Energy pressure: An economist warns Latvia will feel the latest gas price shock with a delay, but it will still feed into utilities and wider prices. Riga cruise capacity: Work on the ED dam at the Port of Riga will partially demolish the barrier to allow more cruise ships near the city centre. Justice reform: Latvia’s Ministry of Justice proposes “pay sooner, pay less” discounts and easier fine payment options to improve compliance.

Border Security: Latvia has launched “Operation Vilkatis” (Werewolf) to curb irregular migration from Belarus, running through the end of August and coordinated by the State Chancellery’s Crisis Management Centre, with the Interior Ministry, Border Guard, State Police and the National Armed Forces boosting patrols and using drones, helicopters and aircraft. Migrant Smuggling Tactics: Authorities say they found Latvia’s first tunnel allegedly used for illegal crossings near the Silene border crossing, detaining 15 people; Interior Minister Jānis Dombrava said the discovery is prompting searches for other underground passages. Regional Defence Concerns: Reuters reports Latvia is among NATO states warning of possible Russian “false-flag” sabotage against critical infrastructure, with Lithuania, Poland, Latvia and Estonia increasing protection and information-sharing. airBaltic Restructure: airBaltic unveiled a major turnaround plan: cutting its A220-300 fleet by about one-third to around 36 by year-end, focusing the network more on Riga, and seeking €225m interim financing for stability. Public Health: Latvia will move the second measles-mumps-rubella vaccine dose to age four (from seven) after measles cases were detected this year. Sports: Latvia’s men’s basketball team begins World Cup qualifier preparations, with several key players absent from the current squad.

UN Accountability: An Arria-formula UN Security Council session organized by Latvia, the UK and Ukraine heard allegations that Russia tortures Ukrainian POWs and civilian captives, with UN figures saying over 95% of interviewed POWs reported torture or ill-treatment and more than half reported sexual violence. Eastern Border Crackdown: Latvia discovered a migrant tunnel near the Silene border crossing with Belarus and arrested 15 people; Interior Minister Jānis Dombrava said it’s the first tunnel of its kind in Latvia and vowed wider scans and tougher action against smuggling networks. Border Security Operation: Prime Minister Andris Kulbergs launched Operation “Vilkatis” (Werewolf) to counter illegal migration as a “hybrid threat,” using drones and coordinated work by border, police and defence services. Regional Security Alert: Latvia, Poland and the Baltics stepped up protection of key infrastructure after warnings about possible Russian false-flag attacks using Ukrainian-made drones. Economy Snapshot: Latvia’s annual inflation was 2.6% in July, with housing and energy pushing prices up while food costs fell. Rīga City Life: Traffic restrictions are planned for Rīga’s birthday celebrations, including closures around 11 November Embankment and Old Riga. Health Note: England reported it is “on the cusp” of eliminating hepatitis C after scaling up testing and treatment.

Security & NATO: Latvia is part of a wider Baltic push to harden critical infrastructure after warnings that Russia could stage “false-flag” incidents using Ukrainian drones, with officials pointing to tighter protection for energy and transport assets. UN Human Rights: Latvia helped organize an Arria-formula UN Security Council meeting focused on Russia’s abuse of Ukrainian detainees, including torture and coercive recruitment. Culture & Identity: Latvia’s Culture Minister is urging the Saeima to revive laws renaming Soviet-era streets and towns, as the Baltic region moves to reduce lingering Russian influence. Rīga & Mobility: A new “Riga Atlantis” mural was unveiled in a Central Station underpass as part of an Urban ReLeaf climate-and-nature outreach project. Energy Infrastructure: Construction is underway on a battery storage park in Grobiņa parish, a €7m project aimed at boosting grid flexibility. Digital Services: Latvia’s e-address will be unavailable for technical upgrades over 14–16 August, while other services on latvija.gov.lv should keep working.

Security & Hybrid Threats: Latvia and its Baltic neighbours are tightening protection of dams, power plants and gas infrastructure after warnings that Russia could stage “false flag” attacks using Ukrainian drones, with regional officials describing stepped-up security and constant intelligence sharing. Energy Infrastructure: Sadales tīkls is set to receive €40m from the EU Modernisation Fund to expand Latvia’s grid capacity, building new substations in Saulkrasti and Saldus and upgrading Salacgriva, aiming to boost renewable connections by 2030. Local Economy Shock: The closure of the “MERE” retail chain is leaving Latvian suppliers with frozen funds and spoiled stock; the Latvian Traders Association puts the stuck value at €1.52m, with unresolved questions over whether goods can be resold. Public Health & Safety: Reports highlight illegal spice-laced vapes reaching schools, with a major share of seized devices testing positive for drugs. Transport & Daily Life: Roadworks are ongoing on 58 national road sections, with the biggest delays on Valdemārpils–Rude (P126). Weather: Latvia faces a windier, rainier start to the week before calmer, drier conditions later. Sports (Latvia in focus): Jelena Ostapenko and Hsieh Su-wei reach the Toronto Masters doubles semifinals, while Latvia’s U16 standout Benjamin Berrouet continues to shine at EuroBasket in Oradea.

Latvia’s Demographic Crunch: Latvia is facing a “triple squeeze” as the region ages and shrinks, with projections pointing to about 1.5 million people by 2050 and a sharp rise in old-age dependency alongside falling pension replacement rates. EU Migration Policy: Europe is moving from fences to return centers as migration enforcement hardens, with the Ceuta crisis again putting pressure on Brussels to tighten rules and surveillance. Security & Hybrid Threats: Baltic officials warn Russia may use false-flag tactics, including drones, to undermine NATO support for Ukraine; the wider alarm follows incidents like a runway shutdown in Germany after explosives were found. UN Humanitarian Law: Latvia and the UK are set to organize a UN Security Council Arria-formula meeting on treatment of Ukrainians held in Russian captivity. Sports (Latvia in focus): Benjamin Berrouet powered Latvia at FIBA U16 EuroBasket, joining the 30-point/20-rebound club; Jelena Ostapenko advanced in Toronto doubles. Business & Travel: Tallink will charter the cruise ferry Romantika to Italy for the Mediterranean Games in Taranto. Local Economy: Latvia’s Economics Ministry says a fuel-retailer solidarity payment plan should be reconsidered after findings that diesel excise cuts didn’t fully reach prices.