Latvian Political Monitor

Day No. 54 in the prime minister's seat – immigration law, hospital reform, energy, and again the old unresolved issues. Today the day started early with a security meeting on the illegal immigration counteraction plan – we will inform the public tomorrow. It is a very good plan and it will be put into effect immediately. But in parallel, several serious issues are on the government's agenda. 🛂 IMMIGRATION LAW / TUA FOR INVESTORS The President has returned to the Saeima for re-review the amendments to the Immigration Law on temporary residence permits for foreign investors. We must make a clear choice – whether we want to fill the state budget mainly with the help of foreign students working at Bolt/Wolt, or whether we are able to attract wealthy people who invest in Latvia, create companies, buy property and pay taxes. I have repeatedly stressed – 🇱🇻 the foundation of national security is a strong economy. For the economy to grow, we ourselves must be brave enough to make bold and competitive decisions. 🏠 The housing stock deficit exists in practically all regions of Latvia. For example, the Vidzeme hospital lacks qualified medical staff also because people who would be ready to work there simply have nowhere to live. My proposal provides: ➖️ an investor who wishes to receive a TUA in Latvia must provide a much greater economic contribution to the state; ➖️ increase the direct payment to the state budget to €50,000 over five years; ➖️ at the same time, ensure real investments in Latvia's economy; ➖️ in the next step, create an opportunity for these people to become Latvian tax residents, paying a fixed €60,000 tax per year – a kind of Latvian tax “subscription”. 📊 If we could attract 1,000 investors this way: ➡️ €50 million directly to the state budget; ➡️ more than €100 million in investments in Latvia's economy; ➡️ in the case of tax residence, up to another €300 million over five years. Total potential contribution – around half a billion euros in five years. That is a completely different scale. 👶 WORKING PARENTS' BENEFIT In the coalition we agreed on amendments to the Maternity and Sickness Insurance Law (initiated by @Jauna_Vienotiba): ➖️ extend the current arrangement regarding the working parents' benefit; ➖️ give new parents a clear signal that support will also be available in the future; ➖️ the Ministry of Finance is tasked with assessing the financial impact of the decision. 🎓 EDUCATION LAW We agree that the assessment system for learning outcomes must be improved. But trying to introduce significant changes by September 1 – that is simply not realistic. We agreed to convene a separate meeting this week that will be entirely devoted to this issue. ⚡ ENERGY, ENVIRONMENT AND CLIMATE A new government thematic committee on energy, environment and climate issues will be created, with KEM taking overall supervision. There are many questions and unresolved problems here, so much closer coordination between ministries is needed. 🌬️ K2 VENTUM WIND PARK PROJECT IN PĀVILOSTA Again we are faced with decisions taken, or more precisely not taken and postponed, by previous governments. The situation is legally complicated, and wrong decisions can cost the state many millions of euros. ➖️ KEM must take responsibility for its decisions; ➖️ we asked the ministry to assess the issue much more broadly; ➖️ in a week I expect full information and an assessment of possible consequences. It is the responsibility of both officials and the minister to prevent the state from being drawn into extensive and expensive litigation. 🏥 ZZS OBJECTIONS TO THE HOSPITAL REFORM Here again we encountered a familiar situation. In the government, the hospital reform issue has been reviewed and a decision has been made. I also urge ZZS to familiarize themselves in detail with the real situation in hospitals, patient flows, staff availability and funding. Reform cannot be done only on paper, but it can likewise not be stopped just because change is politically unpopular. 🇱🇻 My principle remains unchanged – the state must be able to make decisions. Not to postpone them endlessly to the next government. KNAB has initiated a review of my visit to Zemgale and Liepāja - my answer: come and check. I honestly combined a work visit to Zemgale and Kurzeme to get to know the situation in agriculture and manufacturing, while also meeting residents as the AS prime ministerial candidate in the next elections. As prime minister, my work is 24/7 and there is no other way than to reach voters without combining it with work. If someone wants to nitpick, you are welcome, I will explain and show everything.

The idle ones have managed to call this an 'illegal visit'. Hats off to @AndrisKulbergs for managing to visit all this in a day. https://t.co/MYBOcmLAzz

Day No. 53 in the prime minister's chair (Friday, Aug 7) – unofficial visit to Liepāja, Grobiņa, Nīca 😊 I visited entrepreneurs, manufacturers, farmers, municipal deputies, market ladies, residents, the crazy Liepāja folk ⚙️ RK Metal – Grobiņa A modern metalworking company with around 200 employees producing high-level metal structures, equipment, and specialized solutions for export. Here the problem of labor costs was again very clearly voiced. 🤒 From the entrepreneurs' point of view, a big problem is the abuse of the sick leave system and how much of the sick period is covered by the employer. ⏱ The second topic – 100% surcharge for overtime and complex bureaucracy to introduce more flexible solutions in the company. By comparison, we also talked about 🇸🇪Sweden, where in some cases the overtime surcharge model is more flexible. A welder's salary in Latvia has already approached the level I once saw in 🇳🇱 the Netherlands, having worked 13 years in the equipment manufacturing industry. This shows very well how serious the skilled labor problem has become in Latvia. ❤️ RŪRE Care Home This was a very personal visit for me. RŪRE once allowed my cousin Mārtiņš Lauva to live out his last days with dignity and helped fulfill his final wishes. That is why I know the value of mobile hospice services not from documents but personally. And I am seriously concerned that the Ministry of Health's ill-considered planning and conditions could jeopardize a system that Latvia could rightly be proud of in recent years. RŪRE has simultaneously taken on a huge risk by developing five regional healthcare centers in Kurzeme in a short time. The problem is again the same – delayed state planning, extremely short deadlines and bureaucracy. As a result, there is a risk of not using millions of euros of 🇪🇺EU funding. 🏗 Liepāja SEZ – industrial park on the former 'Metalurgs' territory We talked about: ➖️ industrial territory development; ➖️ military industry opportunities; ➖️ new production plants; ➖️ labor availability. In Liepāja unemployment is historically very low – around 4%, with only about 1,737 unemployed people. That's good, but it creates another problem for entrepreneurs – there is no one to hire. There is a particular shortage of technical specialists. Here the weakness of our education system in STEM subjects – mathematics, physics, engineering – is strongly felt. 🏠 The second problem – the lack of housing stock. Even if a company finds a specialist in another Latvian city, the person often has nowhere normal to live in Liepāja. Among development projects – also YOKOHAMA's plan to create a tire plant in addition to the existing alloy wheel production. 📦 CALJAN – from Liepāja to the whole world This is one of the companies Latvia should truly be proud of. CALJAN produces high-level logistics and small-parcel conveyor systems for global clients such as: Amazon, FedEx, UPS, DPD, DHL, Walmart and others. 🌍 About 30,000 units have already been delivered worldwide. And the most impressive thing – the company has relocated its: ➖️ R&D; ➖️ engineering; ➖️ production; ➖️ head office from 🇸🇪 Sweden to Liepāja. This is exactly the Latvian economic model I want to see more of – not cheap labor, but knowledge, engineering, technology and global exports. 👷 CALJAN employs around 410 people. But they too can no longer find enough workers in Latvia. About 40 people are already being hired through a 🇱🇹Lithuanian labor leasing company – including engineers, programmers and electricians from 🇮🇳 India and the Philippines. And the money for labor intermediation goes to Lithuanian companies, not stays in Latvia. 🏛 Meeting at Liepāja City Council @liepaja With the city leadership we discussed: ➖️ The Local Government Financial Equalization Fund; ➖️ Liepāja's development; ➖️ The Port Law and its further progress. ✈️ NORSAF – green aviation fuel project A very ambitious idea – producing future synthetic aviation fuel in Liepāja using green hydrogen. 🇪🇺 In the coming years, aviation will face increasingly strict requirements for sustainable aviation fuel blending – in 2030, 2035, 2040 and beyond. At the moment, however, the technology is still extremely expensive. 💶 Approximate: ➖️ new fuel – €7,000/t; ➖️ traditional Jet Fuel – around €1,500/t; ➖️ before the Hormuz crisis – around €600–800/t. This shows how huge a technological and economic leap is still needed. 🥒 Liepāja Market I'll be honest – I liked it more than Rīga Central Market. 😄 Cozier, more Latvian, and with a feeling that there are more local producers. In the shopping basket: 🍞 very good bread baked in Liepāja; 🍗 Rubeņi smoked chicken; 🥒 lightly salted cucumbers; 🍄 and, of course, chanterelles – because I have no time to go to the forest myself. ☹️ 📺 In between, also an interview with Liepāja TV. - about MP compensation 🏭 Liepāja Papīrs An impressive Latvian-level plant specializing in printing adhesive labels. 👷 Around 120 employees. The company invests very actively in modern production equipment and automation. Not because they don't want people, but because there simply aren't any. Training a new specialist takes up to two years. Hence, the labor shortage effectively forces companies to invest in technologies that allow them to produce more with fewer workers. 📦 Due to the Hormuz Strait conflict, the company has purchased about twice as much paper stock to ensure continuity of production. This in turn means more money frozen in the warehouse and pressure on production costs. 🖨 FORTIUS – printing house A smaller local printing and labeling company. And such companies are also very necessary – almost every city needs its own local printer that can quickly serve small and individual orders. 🥛 Kazdanga company “Baltu Piens” Two enterprising women joined forces, mortgaged their properties and used ALTUM financing to buy a farm. This story is also personally close to me, because my wife's parents live in Kazdanga. But the numbers raise very serious questions. 💶 The loan principal has been repaid about €50,000, but €39,713 has already been paid in interest. The interest rate – almost 9%. Moreover, to review the loan repayment schedule, ALTUM requires an additional fixed payment of 0.5% of the remaining amount. Then my question is simple: Is ALTUM's task not to be a state development financial institution that helps companies grow? If state funding conditions weaken a company more than help it develop, something is wrong with the system. Moreover, the new farm managers still need to invest about €459,000 in treatment facilities that the previous owners had not fixed. 🏎 Garage 1965 – Latvian rally history museum For all petrolheads – a must-see! 🔥 A very enjoyable museum. In Liepāja not only 'the wind is born' – there are very deep roots of Latvian rally and motorcycle sport. 👥 Meeting with Liepāja residents at the Latvian Society House 👥 Meeting with residents in Nīca 🧀 Nīca cheese and ZS “Skrodis” Again the seasonal labor problem. Vegetable and berry growers need people for specific seasonal work, but existing rules make attracting labor extremely complicated and expensive. Entrepreneurs point out that the set €1,700 salary threshold for attracting foreign labor for this type of work is too high and, given current agricultural product prices, makes production costs uncompetitive. And the reality in the countryside is harsh – local people often cannot be found even for such pay. Young people simply don't come to cut cabbage or pick berries. 🧀 But the cheese – seriously – one of the best I've tasted in Latvia. 🌅 End of the day – Red Sun Buffet Beach Bar Meeting with the owner, who has run a family business on the Liepāja seaside for 17 seasons, working both summer and winter. Here, too, the reality of the Latvian labor market is very clearly visible. 🇺🇦 Ukrainian families work at the company, engaging in work across several generations. They serve clients in Latvian, but the Ukrainian women have also introduced their own delicious traditions to the menu. 🎶 And every evening – live music with high-level musicians. What did I take from these two regional days? 🇱🇻 In Latvia we have fantastic entrepreneurs, farmers and manufacturers. They invest. Take risks. Export. Invent. Build factories. Take over markets. Create jobs. But at almost every stop I heard the same words: ⚠️ bureaucracy; ⚠️ labor shortage; ⚠️ tax and labor costs; ⚠️ slow state decisions; ⚠️ ill-considered regulation; ⚠️ difficulties obtaining financing; ⚠️ officials' fear of taking responsibility. The state's task should not be to train entrepreneurs in an obstacle course. The state's task is to create an environment where a person ready to risk, invest and create jobs can do so. For me, such visits are far more valuable than dozens of presentations in Rīga. Because only in a factory, in a field, in a warehouse, on a farm or at an entrepreneur's table can you understand what actually works in Latvia and what urgently needs fixing. @Apvienotais_

As I promised, changes will be made and the proposals of the Riga Heat investigation commission and the State Control will be put into use to reduce the heat tariff in Riga. Thank you @JanisVitenbergs and KEM VS @LigaKurevska for a very well-developed plan with clear deadlines and responsible parties to make the necessary changes in the short and long term.

Kulbergs hasn't even squeaked about the liquidation of the Climate Ministry, the shutting down of the SIF, halting the airBaltic subsidy, revising the Saeima election law, denouncing the Migration Pact, selling student visas, security checks of city mayors by security institutions, cancelling subsidies for electric car purchases, the ban on burning peat, etc. decisions initiated, supported and implemented by JV, PRO, ZZS. Why should he be considered a revolutionary? He now signs students' diplomas.

A constructive meeting with the new prime minister @AndrisKulbergs — many issues where our views align. Rīgas siltums needs a single owner — either the municipality (Riga proves it can do better) or the state, but the situation where neither side holds a majority in the company cannot continue. In recent days we also hear broad discussions about the new municipal equalization fund. I emphasized to the prime minister that Riga has no problem making contributions to the regions, but we must not do this at the expense of the capital and metropolis's economic development. There needs to be a proportionate solution that motivates municipalities to do more, rather than fight each other over one formula or another. Because at the end of the day — the bigger Riga's economy becomes, the more all of Latvia gains.

Time for @MarisKucinskis and @AndrisKulbergs to step out of the opposition populism slippers. KEM has more functions than some old ministry, and climate is the smallest % we addressed in EU energy and environment. Of course, I got firewood and woodchips recognized as renewable resources, but Latvia still has a lot of work in energy.