Latvia's plans — particularly for developing its defense industry — are ambitious. The government recently approved an action plan extending through 2036. Over the next three years, the volume of domestic industry supplies to the armed forces is set to double, with the goal of tripling the amount of military equipment produced in Latvia. Defense spending will also support research and innovation. Over the next decade, the defense industry is expected to account for a third of the national economy.

In addition to overarching goals, a more concrete action plan is expected to be completed. Next year, defense spending will increase to 4 percent of GDP. Latvia is already close to that threshold, with this year's defense budget being the largest in the country's history.

"By the end of the year, we will draw up a short-term action plan, as requested by defense industry representatives — what we expect from our companies and what we need between 2026 and 2028. We need to align the timeline with the needs of our armed forces," said Latvian Prime Minister Evika Silina.

"The armed forces already have a 20-year development plan, but if we receive additional funding, we can implement it much more quickly. We need to review many areas where we can take action. If more resources are allocated, it will significantly strengthen the country's defense capabilities," said Raimonds Bergmanis, chair of the Latvian Saeima's Defense, Internal Affairs and Corruption Prevention Committee.

"The development of the defense industry enables us to enhance our armed forces, supply security, the economy and innovation, and to create technical solutions — which are very important to us," said Latvian Minister of Defense Andris Spruds.

There are many competing financial needs. In addition to defense spending, Latvia must continue building Rail Baltica and ensure that people still have access to healthcare. Unlike Estonia, Latvia has not yet implemented any tax increases. In fact, both wage earners and pensioners will keep more of their income this year and prescription medications have become more affordable.

"The Baltic states were the ones warning Europe about Russia's intentions. We were right, because we understand the situation better. Look at the composition of the European Commission — Kaja Kallas is leading foreign policy, Valdis Dombrovskis is managing economic affairs and Audrius Kubilius is handling defense. These are three major areas not just for the Baltics, but for all of Europe. It is in the interests of both the Baltic states and Poland to have a strong Europe," said Martinš Kazaks, president of the Bank of Latvia.

Members of the government have spoken about internal savings and reducing bureaucracy. Still, the prime minister's party, Unity, has been in power for a long time, and during that time bureaucracy has only expanded. At least the minister of economic affairs promises that concrete proposals have now reached parliament.

"A year ago, we adopted a plan to cut red tape in the construction sector. It includes 60 different measures. We'll begin implementing them soon. This week's cabinet meeting was important because we approved amendments to the Construction Law. Coordination of these changes actually began back in September. The amendments address many key issues — for example, procedural changes that will make the work of builders easier. We'll also shorten the time it takes to apply for various permits," said Minister of Economics Viktors Valainis.

The opposition believes that the government, which has struggled to secure enough votes in parliament for key decisions, is largely incapable of delivering real results.

"If reforms aren't implemented and bureaucracy isn't reduced in the near future, the situation will only get worse. After all, we're one of the poorest countries in Europe," said Ainars Šlesers, chair of the Latvia First parliamentary group.

Just two months remain until Latvia's local elections, and naturally the upcoming vote is influencing the coalition's actions. Although Prime Minister Evika Silina tried to refresh her government and bring in new energy, support for the coalition still appears fragile. However, no major changes are expected before the elections.

President Edgars Rinkevics has also criticized the government's indecisiveness, especially regarding the election of the Bank of Latvia's new president. He has now proposed amending the law so that candidates for the central bank presidency, state auditor and chancellor of justice would be nominated by the president and then submitted to parliament for approval. This week, he also sent a proposal to the Saeima to lower the minimum participation threshold required for holding a referendum.

--

Follow ERR News on Facebook and Twitter and never miss an update!