Moody’s upgrades Latvia’s bond rating

Latvia is one of eight Eastern and Central nations whose ratings of foreign currency government bonds have been upgraded by the New York-based Moody’s Investor Service.

All eight nations—also including Estonia and Lithuania—are candidates to join the European Union. Also upgraded were foreign-currency country ceilings, Moody’s said in a press release.

Latvia’s bond rating was upgraded to A2 (relatively good financial security) from Baa2 (relatively adequate financial security). The best rating possible is Aaa, or exceptional financial security.

“The upgrades reflect Moody’s view that the process of economic and financial integration of these countries with the EU is virtually irreversible,” the investor service said.

The rating is a measure of what Moody’s sees as a country’s ability and willingness to make payments on bonds. In other words, the risk of investing in the nation has declined.

Andris Straumanis is a special correspondent for and a co-founder of Latvians Online. From 2000–2012 he was editor of the website.

Nov. 18 isn’t, and shouldn’t be, obsolete

As a Latvian child growing up in Sydney, my recollection of Nov. 18 each year was of a sombre and solemn occasion: a memorial service, a reception, some speeches, some songs; Latvians of various ages (the average getting progressively older, as each year passed) gathering around the flag—a scene repeated in Latvian halls around Australia.

I was taught that “this was our national day.” But it struck me as quite different from the way that the Aussies around me celebrated Australia Day, because they did just that: they celebrated.  (Well, most of them did. The Aborigines didn’t, but I didn’t know that then.)

The Latvians didn’t celebrate. Back in those days (my recall would date from about 1970)—and at least until Latvia again declared independence in 1991—the exiled Latvians in Sydney would commemorate what had been, not celebrate what was.

And the commemoration would be solemn and stoic and sad. Sure, there would be some grand words of hope and aspiration, spoken usually by the men in suits who addressed the annual gatherings at Latvian House. But I am not sure how much those words were really believed, by those who spoke them or by those who listened. The hope expressed was for Latvia to someday be independent and self-governing again, but it had been half a century since it had been thus…and for such a very short time. I don’t know if any of the kids listening to the speeches, like me, really believed it would happen again. Then, as we grew older and began to understand the political forces at work in Europe and the world, to this general scepticism was added the more specific realization of exactly how difficult it would be. We did not see how it could happen, or what could possibly shift the monolith that was then the U.S.S.R.

Of course, happily, in August 1991 we were proven wrong.

But until then, to me the annual Nov. 18 commemoration was an example of what I sometimes call the “frozen culture” syndrome. We expat kids were taught a “frozen culture” by our parents and teachers. Having little or no access to Soviet Latvia and the cultural lives of its citizens, pre-war Latvia was all they knew and all they could teach us about. Of course, their knowledge and teaching dated back hundreds of years, so there was no shortage of material, but they taught us about the Latvia they remembered, the Latvia they had left in the mid 1940s. For many exiled communities around the world, most of the anniversaries were sad ones. Most of the memorable dates in the calendar were occasions of grief and loss: June 14, March 6, etc. Even Nov. 18, once a joyous independence day, had been overshadowed by what came after.

Given that Latvia is again self-governing, does that make Nov. 18 obsolete as an anniversary?  We have a new independence day in August, so what is the point of Nov. 18 these days?

Pure history, for one thing. As a lover and great respecter of the power and lessons of history, I want my children to know the story of the little northern nation that produced their mother and her forebears, just as they should know the story of the Australian country families that produced their dad. And Nov. 18 is an integral part of that story, a crucial signpost on the ancient timeline of Latvian history.

While it no longer has the sad resonance that it once did—and has been superseded, in a literal sense, by the “current” independence achieved in August 1991—Nov. 18 remains a seminal day in Latvian history. Such historical markers are important, to allow us to pause, consider, think about life and our place in the world. So, I will teach my kids about the tiny window of self-rule that Latvia enjoyed for a few short years early in the 20th century and about what happened to cut this time short. It is part of the story that will explain to them why and how their maternal grandparents found themselves in, of all places, Australia (!), half a world away from their hometowns.

What else? A reminder of what Latvians can do when they put their mind to it. A reminder of what was achieved by a tiny people, against the odds, back in 1918.

Finally, a chance to think and share ideas. I have noticed that the speeches made on Nov. 18 these past few years are different. They tend to be about what Latvia is now and what we want it to become. They look forward, not back. They explore ideas about the role of people like us—the communities of emigrants and exiles—in Latvia’s future and the contribution that we can usefully make, if we want to.

Nov. 18 once mattered a great deal. I think it still does, but in different ways. We shouldn’t just discard a date that matters, forget simply because history has moved on. It will always do that, but we must recognise what is worth remembering—and make sure we remember it.

New government formed, but how long will it last?

Well, they did manage to form a government after all! After weeks of wrangling and an almost painfully slow process, on Nov. 7 Latvia finally had the government that was predicted by everyone immediately after the election—a coalition led by Einars Repše and his New Era party (Jaunais laiks).

Coalition partners are Latvia’s First Party (Latvijas Pirmā partija), the Green and the Farmers’ Union (Zaļo un zemnieku savienība) and For Fatherland and Freedom (Tēvzemei un brīvībai/LNNK).

Common sense seems to have prevailed, despite some fights over ministerial chairs and various positions that provided some transient shock and horror in an otherwise slow news month.

Moreover, after all this wrangling, the decision in the Saeima (parliament) to approve Repše’s government came quickly and without debate! Various commentators consider that the quiet from the opposition—Andris Šķēle’s People’s Party (Tautas partija) and Jānis Jurkāns’ For Human Rights in a United Latvia (Par cilvēka tiesībam vienotā Latvijā)—only means that they will concentrate on attacking the government elsewhere, particularly in relation to the looming budget and further negotiations with the European Union.

As scripted, all 55 members of the four coalition parties voted in favour of the government. However, in a somewhat unsettling departure from the script, the previous day when the Saeima speaker’s position was contested (this time in a secret ballot), only 52 voted for the coalition candidate. This is fertile ground for early conspiracy theories.

Now it’s down to work for a government characterised by relative newness and inexperience. While Repše’s time as head of the Bank of Latvia has drawn widespread positive reactions, his political experience in other areas is still under question. As prime minister of a coalition government he will have to deal in a far more political style rather than the managerial style he was used to at the Bank of Latvia. Mention of a potentially dictatorial style has come from several commentators as well as from Repše’s political opponents.

However, he has so far shown astuteness in dealing with often difficult demands for positions and influence from his coalition partners, firmly rejecting some candidates for ministerial positions nominated by the partners, but compromising on other candidates so as not to alienate support. It is very clear that Repše will be the dominant figure of the new government, an objective reflection of the nature of this coalition. New Era has almost as many deputies in parliament as all the other coalition partners combined. For good or ill responsibility for all that happens will be sheeted home to New Era and Repše.

The Cabinet of Ministers is also marked by a large number of young ministers, with several in their early 30s and the oldest minister—Foreign Minister Sandra Kalniete—being just 49. This is definitely a new broom. To balance this, some well-regarded former ministers have retained ministerial positions, particularly Ģirts Valdis Kristovskis as defence minister and Roberts Zīle as transport minister.

A popular choice is Kalniete, after the coalition could not agree on other suggested candidates. The only minister not to come from a political party background, she has been a career diplomat since the 1990s after being one of the prominent leaders of the People’s Front (Tautas fronte) in the late 1980s, and now has to steer the critical talks on joining both the EU and NATO.

The youth and inexperience of the new government has been quickly picked up by the opposition, which dismisses the potential of the new government and sees it as a retreat from professionalism. The opposition also been critical of the coalition’s joint declaration of its government’s objectives, seeing it as the vaguest of all hitherto declarations, which are traditionally issued for each new coalition government. The declaration is largely a statement of intent and is full of promises of high-quality administration and ethical principles of government. However, it does have some firm measures, such as limiting any potential budget deficit to 3 percent of gross domestic product, in line with EU norms.

The guessing game is on for how long this government will last, a popular quiz at the moment in Latvian newspapers.