With a population of just over 2 million people and a gross domestic product of $37 billion, Latvia is important not for its size but for its location. Situated on the coast of the Baltic Sea and in the heart of the North European Plain, Latvia has been contested by larger powers, such as Russia, Germany and Sweden, throughout its history.
A Political Option
For much of the past two centuries, Latvia was under Russia's domain, first as a part of the Russian Empire and then as an unwilling member of the Soviet Union. After the Soviet Union dissolved, Latvia aligned with the West. In 2004, it joined the European Union and NATO, as did Estonia, Lithuania and several other ex-Communist countries in Central and Eastern Europe. This was a tremendous source of concern for Moscow: The West's primary economic and political blocs were now on Russia's doorstep.
However, nearly two hundred years of Russian domination has left an indelible impact on Latvia, where Russia influence remains strong. This influence is seen primarily in Latvia's many ethnic Russians, who currently account for just less than 30 percent of the population. It is also seen in the country's politics. Harmony Center, a party that derives much of its support from the ethnic Russian population, consistently performs well in the country's parliamentary elections. The party had its best performance ever in the most recent parliamentary elections in 2011 when it won 28 percent of the popular vote. The elections gave Harmony Center 31 seats in the 100-seat parliament — more than any other party.
But this electoral success was not enough to get Harmony Center into power. The Unity Party, led by Prime Minister Valdis Dombrovskis, and the Zatlers' Reform Party, led by former President Valdis Zatlers, formed a coalition to counteract what they saw as a pro-Russia party leading the government. The coalition brought on the smaller National Alliance party instead of Harmony Center to get the necessary majority needed for Dombrovskis to retain his premiership. This was a blow to Russia, which had seen an opportunity for its preferred party — Harmony Center — to lead a new government after a corruption scandal brought down the previous coalition.
With its political option falling short, Russia has sought other methods to influence Latvia. One method meant to capitalize on the frustration felt by ethnic Russians who voted for the Harmony Center. A few months after the election, the country held a referendum in 2012 over making Russian a second official state language. Roughly 75 percent of voters voted against the proposal, showing that it had little appeal outside Russian populations.
Another factor in the referendum's failure is the "non-citizen" status of many ethnic Russians, which precludes them from voting. Moscow is highly critical of this designation, but as the culture minister's comments show, Riga probably is not going to change its mind anytime soon. The referendum thus reflected the outcome of the parliamentary elections: Ethnic Russians strongly support Harmony Center, but other segments of society are making a concerted effort to block Harmony Center's progress.
More Difficulties
There was also an economic component to Russia's strategy in Latvia, which presented Russia a great opportunity to penetrate the Baltic region economically. Estonia is firmly entrenched in the eurozone, and Lithuania recently has tried to weaken Russia's position in the region, especially in the energy sector. In fact, Lithuania has been aggressively implementing the EU Third Energy Package. For its part, Latvia has been less aggressive and more willing to work with Russia, due in part to its complete dependence on Russian oil and natural gas.
But here Russia's position also appears to be on the decline. While Latvia has not made the same progress as Lithuania in terms of energy diversification, Riga probably will benefit from various regional energy projects down the line. Moreover, if Latvia joins the eurozone, Russia will find it even more difficult to influence the country economically — as was the case with Estonia. In fact, it is Estonia's strong economic performance, despite joining the eurozone during its crisis in 2011, that served as a positive example for Latvia. Stronger European integration would limit Russia's economic influence in Latvia, particularly in Moscow's pursuit of infrastructure projects that favor Russia and its prospects of undermining Baltic unity. However, Russia would likely remain one of Latvia's top trade partners.
Notably, Latvia's eurozone accession is not inevitable. Concerns remain over the future of the eurozone and its significant financial and political problems. Public opinion in Latvia currently disfavors eurozone membership; roughly 66 percent of the population opposes it. And though the government is not required to hold a referendum on the issue, joining the eurozone without consulting the public could be seen as a controversial move. But in the competition between Europe and Russia over the Baltics, Latvia appears to be favoring Brussels at the expense of Moscow.
