Latvian Political Monitor

From@edgarsj

@RedWhiteRedLV @poznaks I heard that AS is fighting against Russian railway cargo. What's the situation?

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From@u_osis

The Saeima elections are at the door. Who to vote for? I don't really know, because politicians' declarations have again clashed with socio-economic physics, mathematics, and logic. Probably for the lesser evil. But which one exactly? For years I've been saying that the 'comfortable stagnation' and institutional inertia cultivated for years are exhausted. But are they really exhausted? The state administration continues to function as a clumsy conveyor of regulations without feedback. Through the flood of Cabinet of Ministers regulations, it continues to automatically grow civil servant positions and bureaucratic barriers, while political responsibility dissolves in collegial decisions. This internal incapacity is made even sharper by the geopolitical background. Here, security demands immediate, asymmetric efficiency, not peacetime procurement procedures and other decision-making processes' dawdling. But maybe, finally, the time has come for good changes we all hope for? Let's see what we can actually hope for in the Saeima election atmosphere from the speeches and articles of the most popular parties (about 'Progressive' and parties representing the Russian-speaking electorate, we'll need a separate conversation). In the pre-election debates, as I would formulate them, three different main narratives dominate: The radical libertarian restart (Alvis Hermanis and MMN), which offers a brutal 'chainsaw' approach — reducing the number of ministries and civil servants by 15%–50%, 'zero budget', massive deregulation, and citizen involvement through capital markets. The pragmatic technocratic direction (Kulberga line, AS, LA), which also focuses on process audits, the 'one in, two out' principle in bureaucracy, and depoliticization and listing of state-owned companies (like airBaltic, Latvenergo) on the stock exchange. The populist 'strong leader' narrative (LPV, Ainārs Šlesers), which appeals to the public's emotional hunger for rapid growth. They offer to centralize state governance and grand investment projects, but don't delve into such 'details' as implementation mechanisms and fiscal constraints. The central flaw of all these declarations is the ignorance of stark reality. The 2.5% GDP growth touted by politicians is no market breakthrough. It's a typical 'war Keynesianism' illusion — the economy is kept afloat by state defense spending (over 1.1 billion euros or over 3%–3.5% of GDP) and borrowed budget funds, while private exports and business investments (apart from luxury Porsches and BMWs that fill Riga's streets) stagnate. With economic productivity at only 55.8% of the EU average and stagnating foreign investment, promises of 'doubled prosperity' and simultaneous tax cuts without a structural base change (low added value and productivity) are mathematically incompatible. The fiscal framework also allows no maneuvering, because defense commitments, rising state debt servicing costs, and the social burden of an aging society prevent simultaneously ensuring a 0% budget deficit and massive tax cuts. So, my dear, it's a dead end. In a regional breakdown, more than 80% of foreign capital is concentrated in Riga and Pierīga, while municipal fragmentation and low capacity, which I've also been talking about for years, make the periphery unable to lift any significant production projects. Meanwhile, in healthcare and social sphere, the introduction of a 'free market' hits an acute shortage of medics and a terrifying demographic hole. The next government will inevitably have to admit that attempts to patch the system with linear budget cuts and loud slogans alone will fail. So that it doesn't seem like I'm unfairly painting Latvia's bright future hopes in black colors, I will next examine the illusory attempts of parties to solve problems in more detail. Even later - what socio-economic physics, mathematics, and logic actually require to be done (which I've also been talking about for years). Have a nice last working day of the week!

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From@G131424

@E_Stendzenieks @AndrisKulbergs deeper into the swamp every day 🤦‍♂️

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From@JurgisLiepnieks

Conversation with Evika Siliņa about Kulbergs, Briškens, Sprūds, Augulis, Vienotība and whether Valainis has any interest in the Tet/LMT deal with Telia.

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From@aivars_ve

@Lato_Lapsa @AndrisKulbergs Comparing only 14.5% and 25% is misleading. The first loan financed airBaltic's growth strategy, while the second is short-term rescue financing to address the consequences of the failure of that strategy and its implementation. The economic essence of the two loans is fundamentally different.

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From@aivars_ve

@Lato_Lapsa @AndrisKulbergs Comparing only 14.5% and 25% is misleading. The first loan financed airBaltic's growth strategy, while the second is short-term rescue financing to address the consequences of the failure of that strategy and its implementation. The economic essence of the two loans is fundamentally different.

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From@BensLatkovskis

If “Unity” firmly states that it will not enter a coalition with LPV under any circumstances and places a strong emphasis on this point, then that would be a powerful move. Then JV will become the first choice for those for whom LPV is completely unacceptable. For those who dislike NA's flirtation with the Šlesers group, AS's uncertainty on this issue, and also PRO is not on the list of choices.

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