It is a summer time

Vacation time is in full bloom in the Baltic Sea area. Mobile home vans with the licence plates from all over the EU could be seen on the Via Baltica and elsewhere. Saaremaa is traditionally visited by Finnish and Swedish tourists, and in Jūrmala traditional Russian tourists are mixing with Germans, British, Finns and Swedes. Have not been on the Curonian side of the Baltic Sea and Lithuania yet this summer, but I assume that pretty much the same trend is followed also there.

NATO officials these days in Mons discuss with the Baltic States respective representatives about the future of the air surveillance. The latter is provided now by the NATO allies in rotating order, and this system is agreed to exist until 2011. The official results of this meeting shall be known later and most probably Estonia, Latvia and Lithuania should start to tinker about purchasing of figher jets. Joint efforts here would probably work best and customarily one could follow the good examples of BALTNET, BALTRON and BALTDEFCO.

Military defense is important and especially now, when Russia is turning more self-assertive every day. The traditional Russian pre-election sabre rattling tactics has not changed, and it seems now that Kremlin's closed circle of friends have decided to continue verbal confrontation with the West. Divide et impera strategy works for Vladimir Putin, and the best way to secure balanced development of the Baltic States societies in the framework of such Russian strategy is to make their liberal economies and governance systems more transparent, thus more competitive and able to withstand global challenges.

Estonia has the best track record here and it is reflected in most of the indexes (just see the latest IT technology rating in the Economist or www.transparency.org). Lithuania has its problems with minority government, but at least they have internal consensus in the society. Latvia is traditionally the weakest link and unfortunately there is no light at the end of the tunnel.

The maire of Ventspils, who is charged with money laundering and graft, was released from the prison due to health reasons. The decision of the judge, Mrs Tamāra Broda to have a positive verdict in the sixth attempt of the Mr Lembergs defense team to bail out their client is still equivocal. There are rumours about possible reshuffle of the government because disatisfaction with the Minister of Economics is omniscient. Also the head of the PM's office Mr Māris Riekstiņš (former ambassador in the Washington D.C.) is considered as an underutilized asset in the Latvian governance system.

While the political elite tinker about best possible reshuffle of the government the Latvian political dinosaur, the Minister of Interior Ivars Godmanis (LC/LPP)
gave an interview to Latvijas Avīze today (http://www.la.lv/main1.php?dat=2007-07-19&id=3194227&type=la). In the long & rich interview the Minister admits that the productivity growth has been outpaced by the increase in the rate of salaries. With the population hemorreaging out of Latvia minister concludes that Latvian goverment has painted itself into the corner called - unsustainable economic system. At least there is one minister who admits that overheated Latvian economy is a problem, but his suggestions about alleviating the situation are a bit bizzare. Answering to the journalist's question - what next? - minister suggests that the best economists should be employed similarly to Germany in 2004(!), thus they would be handsomly paid to show the government the way out! This is truly brave to admit that problems exist, but in the meantime Latvian ministers never accept that the leadership is to be blamed for inadquate results of the economy running. Among several reports of Moody's , The Economist, Den Danske Bank and others, the most profound evaluation of the Latvian present economic situation was made by Messrs Alf Vanags & Morten Hansen (http://www.biceps.org/files/Inflation%20report%20II%20BICEPS%20web%20page%20version%206%20June.pdf). Instead of listening to the warning signals, Mr Godmanis blames the same economists as irresponsible theoreticians...yet, another example of "the responsible" Latvian government minister.

Finally, the question is why does the minister of interior have to come out with such "economic revelations"? Is it due to the fact that Mr Godmanis tries to position himself as the only one who understands the consequences of the irresponsible governance style of the government he is part of, or does he want to show that other ministers (of Economics, Finance and perhaps PM himself) are simply inadequate for their rank? It is widely accepted that monetary policy as well as major economic issues are made in Frankfurt & Brussels. The ECOFIN meetings are therefore utterly essential for every member state, but neither the Latvian finance nor economics ministers are able to converse in English... . Probably, this is another signal prior approaching government reshuffle, but slowly these signals come these days - because it is a summer time:)