LATVIA IN REVIEW July 19 25, 2011 Issue 29 CONTENTS

Government Latvian Parliament Dissolved in Referendum on July 23 Prime Minister Dombrovskis Votes in Favor of Dissolution in Referendum Ex-President Zatlers Confirms Readiness to Run in Latvia's Parliamentary Elections Latvias Ex-President and Associates Establish Zatlers Reform Party Merger of Nationalist Parties TB/LNNK, All For Latvia! Supported at Congress Economics In U.S., Dombrovskis Promotes Closer Cooperation Between Latvian and American Companies Dombrovskis Participates in NASDAQ Stock Exchange Closing Bell Ceremony in New York Dombrovskis to Bloomberg News: Latvia on Schedule to Adopt Euro by January 1, 2014 In Texas, Dombrovskis Encourages Cooperation Between Latvia and Texas Universities, Companies Bank of Latvia Economist: Producer Price Rise Moderates, But Still Fueled by Higher Energy Prices Bank of Latvia Economist: Money Supply Leveled Out; Pronounced Rise Not Yet Expected Latvian Unemployment Drops to 12.3% in Second Half of July Foreign Affairs President Presents Credentials to Upcoming Latvian Ambassador to Canada Latvian and Lithuanian Presidents Agree on Closer Cooperation at EU Level Baltic States Demonstrate Unity in Protesting Austrias Release of Ex-KGB Colonel Mikhail Golovatov State Secretary Teikmanis Participates in Opening of Latvian Honorary Consulates in California Society Highest Voter Turnout Abroad for Latvias Referendum Reported in UK Sigulda Opera Festival Presents Open-Air Performance of Eugene Onegin Weekly Saturday Flea Market Unveiled at the Former VEF Factory in Rga New Wave 2011 International Competition of Young Pop Singers Kicks Off in Jrmala Articles of Interest Bloomberg: Latvia Referendum Dissolves Parliament Associated Press: Fed Up with Corruption, Latvians Sack Lawmakers in Historic Referendum Agence France-Presse: Latvians Vote Overwhelmingly to Force Snap Election New Europe: Latvia: Political Dj vu? Al Jazeera: Latvians Back Dismissal of Parliament in Vote Reuters: Latvians to Fire Parliament, Head to New Election Reuters: Timeline: Latvia Heads for New Elections Bloomberg Business Week: Latvia to Weaken Oligarchs, Join Euro in 2014, Dombrovskis Says Rancho Santa Margarita Patch: Local Doctor and Prime Minister Cut Ribbon on Consulate Mother Jones: Inside Latvias Gay Rights Battle Stanford University News: Bridging the Innovation Gap: From Latvia to Silicon Valley

Government Latvian Parliament Dissolved in Referendum on July 23 Latvian parliament (Saeima) was dissolved in a referendum on July 23, according to preliminary results which indicate that more than 94 percent of voters cast their ballots in favor of sacking parliament. Preliminary results show that 650,518 voters, or 94.3 percent, voted for the dissolution of parliament, while 37,829 votes, or 5.48 percent, cast their votes against dissolution, the Latvian Central Election Commission reported to BNS after receiving data from all 1,028 polling stations.
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According to BNS, the latest voter turnout data both from Latvia and foreign countries suggests that 689,988 people, or 44.73 percent of Latvia's eligible 1,491,735 voters, took part in the referendum. In order to go forward with the dissolution, the move had to be approved by more than 50 percent of participants in the referendum. The current parliament will continue to work until the next parliament takes office, BNS reported. In the meantime, parliament sessions will be called by Latvian President Andris Brzi, who will also set the agenda of these sessions. Standing parliament committees and the presidium will also carry on with their work, but the presidium will not be authorized to call parliament sessions. The referendum on dissolution of the parliament was initiated by outgoing Latvian President Valdis Zatlers a month before his term in office expired. Zatlers called for the historic referendum after parliament refused to permit law enforcement officials to search the home of parliamentary deputy and reputed oligarch Ainars lesers, from opposition party For A Good Latvia (PLL), as part of an ongoing investigation in a major corruption case. According to data compiled by the Central Election Commission, a total of 689,988 people, or 44.73 percent of Latvia's 1,491,735 eligible voters, took part in the referendum. Prime Minister Dombrovskis Votes in Favor of Dissolution of Parliament On July 23, Latvian Prime Minister Valdis Dombrovskis, a member of the Unity bloc, cast his vote in the referendum on the dissolution of parliament, saying that he had voted in favor of the dissolution of parliament, BNS reported. According to BNS, Dombrovskis explained his vote in the referendum by saying that Unity had agreed with former Latvian president Valdis Zatlers from the very start, when he initiated the referendum on the dissolution of parliament shortly before his term in office expired, emphasizing that the parliament should not contain any parties that were under the influence of reputed oligarchs. From the very start, Unity supported the initiative of former Latvian president Valdis Zatlers for the dissolution of parliament. Unity sees this as a good chance to make sure the parties representing oligarchs interests, or voting to support oligarchs interests, would have no majority in the next parliament. This is a chance to ensure that the forces supporting a state governed by the rule of law have the majority, the Prime Minister was quoted as saying. However, BNS reported that he would not make any predictions as to the likely composition of the ruling coalition after the possible early general elections, as this would depend on the outcome of the elections. But I would like very much that this opportunity would be used to achieve the goal of having in the parliament a majority that would be free from oligarch influence, Dombrovskis told BNS. According to BNS, in response to an inquiry about the governments work until the possible early general elections, Dombovskis said that the key task of the government is to ensure that political changes do not threaten positive trends in economic development and financial stabilization. Ex-President Zatlers Confirms Readiness to Run in Latvia's Parliamentary Elections Ex-president Valdis Zatlers has asserted his intention to run in Latvia's early parliamentary elections with his Zatlers Reform Party (ZRP), founded on July 23, BNS reported. I am ready to get fully engaged in this reform process and do everything to create this party and ensure that it achieves good results, Zatlers said in an interview with Latvian television channel LNT on July 24. According to BNS, the former president also indicated that the creation of the new political party began only on July 23 the day the party was officially established and for this reason
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ZRP would be one of the last to submit its list of candidates for the general elections. Considering that our party was founded only yesterday, we will be the last to submit this list, the ex-president told LNT on July 24. Zatlers declined to reveal the possible posts he might take if his party received the required number of votes in the parliamentary elections. I am not interested in posts at this point. My first concern is to make sure that the party develops into a stable force, based on new principles, he told LNT. I will answer the question when the lists are drawn up. These people will introduce themselves. We will have our candidate for prime minister too. But it takes time. My immediate task is to create this party, and its creation began yesterday, said Zatlers on July 24. Latvias Ex-President, Associates Establish Zatlers Reform Party Zatlers Reform Party (ZRP), named after former Latvian president Valdis Zatlers, was established at a foundation congress in Rga on July 23 attended by 293 party members, reported BNS. At the congress, Zatlers was elected as leader of the party; he was the only candidate for the post. According to BNS, Zatlers Reform Party will be a centrist party, and its organizers have underlined that politics without ethnic division is required for the development of the country. The key principle of centrism is that further national policies should bring balance to the national development. According to the introductory chapter of the partys program, as quoted by BNS, An emphasis on future, medium, and long-term perspectives and an adjustment of policies to the given phase of development will single out ZRP among other centrist political forces. ZRP is not a rightwing party because it does not rely solely on choices by individuals and private owners and the belief that the market rules will settle everything, the program indicated. The program states that the cornerstone of the party ideology is the solidarity of citizens and a focus on the identity and strength of the community. The mission of the new party, BNS reported, is to implement major reforms to release the potential of people, the land, and the state, and to remove the pile-up of barriers preventing balanced and sustainable growth. According to BNS, the partys program, which covers seven years or two successive parliamentary terms, also indicated that the main directions for the reforms will be to build a healthy economic structure that would be competitive on a regional level; to restore the demographic balance and sustainability of the social system; to offer high quality and easily accessible education and health care systems; to build a pragmatic, cost-effective, and far-sighted public administration; and to develop a political decision-making system that would be accountable to citizens and would enjoy their trust. According to BNS, the economic chapter of the partys program listed the achieving of a zerodeficit budget by 2014 among its main objectives. The program states that the deficit in the Latvian national budget for 2012 should be below 2.5 percent of GDP and the government debt to GDP ratio must not be increased any further. The economic chapter of the partys program also states that ZRP wants to reduce the tax burden on wages and proposes that, upon raising the real estate tax, the local governments should be given the right to grant tax allowances to people whose income is inadequate to the value of the property that they own. According to BNS, the new party also opposes payment of unofficial salaries as a method to avoid taxes and supports annulment of reduced VAT rates coupled with introduction of compensatory mechanisms to protect the poor. In turn, BNS reported that the governance chapter of ZRP program calls for a thorough assessment of public functions; immediate implementation of the one-stop agency principle; introduction of a small and effective public administration; partial transfer of corporate income
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tax to municipal budgets; a purposeful rural development strategy; and an identification of Latvias priorities and the development of a plan to achieve the national goals. Merger of Nationalist Parties TB/LNNK, All For Latvia! Supported at Party Congress In a congress on July 23, delegates of the nationalist All For Latvia! and TB/LNNK parties supported the merger of both parties into one, reported BNS. According to BNS, the two-hour long congress took place in a patriotic spirit with music and folk songs. The leaders of both parties Roberts Zle and Raivis Dzintars addressed the congress. According to BNS, the party's new name will be the National Alliance All For Latvia! TB/LNNK, and it will have two co-chairmen: Roberts Zile from TB/LNNK and Raivis Dzintars from All For Latvia! At the congress, delegates adopted the merger, the renewed program, and draft statutes, BNS reported. The board of the new party will include Jnis Tomels, Jnis Birks, and Raitis Abelnieks from TB/LNNK, as well as Jnis Iesalnieks, Aldis Grunde, and Aigars Lsis from All For Latvia! The new party will have about 2,100 members, as TB/LNNK currently has 1,700 members and All For Latvia! has almost 400 members. According to BNS, TB/LNNK was founded in 1997 after the merger of the parties LNNK and For Fatherland and Freedom (TB). Party member Guntars Krasts was prime minister between 1997 and 1998. All For Latvia! was established in early 2006 on the basis of the youth union All For Latvia! All For Latvia! and TB/LNNK ran for the previous parliament elections in one list and won eight seats at the 100-seat parliament, BNS reported. At present, the union has only seven seats, as its member Visvaldis Lacis left the faction in March. Economics In U.S., Dombrovskis Promotes Cooperation between Latvian, American Companies During his working visit to the United States from July 13-22, Prime Minister Valdis Dombrovskis presented to American businesses and finance sector representatives concrete proposals for cooperation between Latvian and American companies. Dombrovskis traveled with a delegation that included more than 40 entrepreneurs from Latvia, representing such sectors as IT and electronics, transport and logistics, metal processing, mechanical engineering, construction, and education. The business delegation, which was formed by the Latvian Investment and Development Agency, also included the management of the Association of Latvian Commercial Banks and representatives from NASDAQ OMX Rga and the American Chamber of Commerce in Latvia. During the visit we met representatives from more than 60 American corporations, including companies which are world leaders in their area of activities, in order to strengthen economic cooperation, Dombrovskis said. The initiative of the Latvian IT companies deserves special emphasis, as this is the field which opens the greatest potential for expanded business activities. By further developing the contacts made during this visit, our companies have opportunities for considerably increased trade volumes and for attracting new investments from the United States in the nearest future. Dombrovskis expressed the conviction that the United States is a strategic partner for Latvia. We have developed close political contacts and cooperation in defense matters, but the focus of this visit was on the development of economic cooperation. Now, when Latvias economy is gradually recovering, it is the right moment to enter new markets and expend the existing ones. The Prime Minister made several presentations regarding Latvias experience in overcoming the financial crisis, for instance, at the World Bank, the Peterson Institute for International
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Economics, Stanford University, the E.U. Mission in the U.S., the World Affairs Council, and the Council of Foreign Relations. Dombrovskis met entrepreneurs representing various sectors of the economy, including the defense technology company Raytheon, transport and logistics company Maersk, agricultural equipment company John Deere, electronic and communication technology company Cisco, audio technologies company Dolby Laboratories Inc, IT company Juniper Networks, film production company Warner Brothers Studios, information technology and research company IBM, Internet and software company Google, banking and finance companies Citibank, Credit Suisse and NCH Capital Inc, and the IT companies Exigen and Dell. During the meetings with U.S. corporations and financial investors, the sides discussed opportunities for investments into Latvian projects in such areas as production, IT, transit, and other industries. The sides also discussed possible cooperation projects and the expansion or launching of American business activities in Latvia. According to the Prime Minister, For IT companies Latvia can offer a favorable taxation system, well-developed IT infrastructure, and favorable conditions for cooperation, as well as highly qualified, experienced, and skilled specialists who are able to fulfill tasks and problems of global leaders. An important focus of the visit was the promotion of university cooperation. To this end, meetings were held at Stanford University and the University of Texas. American universities have more developed cooperation with the business sector by effectively transferring knowledge and technologies from universities to businesses. Latvian universities should take over this experience, particularly by developing applied research in the relevant areas, the Prime Minister emphasized. During his visit, the Prime Minister opened a representation of the Latvian American Business Association of California (LABACA) in the Silicon Valley, participated in a round-table discussion of the Atlantic Council on shale gas, and participated in business seminars in Los Angeles and Austin, Texas. More information on Prime Minister Dombrovskiss visit to the United States, as well as links to photos from important events, available here: http://www.mk.gov.lv/en/aktuali/zinas/2011/07/220711-pm-02/. Prime Minister Participates in NASDAQ Stock Exchange Closing Bell Ceremony On July 22 at 10:45 p.m. Latvia time (3:45 p.m. New York time), Prime Minister Valdis Dombrovskis ended his official trip to the United States of America by visiting the NASDAQ Stock Exchange and participating in the NASDAQ Closing Bell ceremony, a tradition held at the end of the regular trading session. The Prime Minister met with NASDAQ representatives and official rang the closing bell, an event that was also broadcast live on the twelve-story screen on the NASDAQ Tower in Times Square. NASDAQ OMX Group, Inc. is the largest stock exchange in the world. It delivers trading, exchange technology and public company services across six continents. NASDAQ OMX is also represented in Latvia by its stock exchange NASDAQ OMX Rga (former Rga Stock Exchange). The trading system services of NASDAQ OMX are used by the State Treasury of Latvia for initial issuing and trading of securities. Dombrovskis to Bloomberg News: Latvia on Schedule to Adopt Euro by January 1, 2014 In an interview with the American business news site Bloomberg News, Prime Minister Valdis Dombrovskis stated that Latvia has set a clear target: to adopt the euro by January 1, 2014, and is currently on schedule to do so. Latvias national currency, the lat (LVL), is already pegged to the euro with a very narrow fluctuation corridor. Therefore we are actually affected by any euro problems, but we cannot take any of its advantages: lower expenditures for individuals and
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businesses, and greater trust in financial markets leading to lower credit rates for companies. We are carefully following and studying the experiences of Estonia, which introduced the euro this year, and the effect is apparently good: Estonias financial markets are more trusted. We expect the same scenario in Latvia. Dombrovskis explained that for the 2012 budget drafting process, Latvia needs to implement the final fiscal adjustment, totaling about 0.8% of its GDP, or about 100-110 million LVL. A short video of this interview is available on Bloombergs YouTube channel: http://www.youtube.com/watch?v=GRgQCLwC-Fg&feature=player_profilepage. PM Encourages Cooperation between Latvia, Texas Universities and Companies On July 19, during his working visit in the United States, Prime Minister Valdis Dombrovskis met with representatives of the University of Texas in Austin. During the meeting, the Prime Minister noted that Latvian universities should adopt the best practices of their American colleagues in transferring knowledge and technologies from universities to businesses, by ensuring closer, more targeted cooperation between research institutions and entrepreneurs. American universities are more experienced and more successful in this area than higher education establishments in Europe. With 51,000 students, the University of Texas is one of the largest universities in the United States. The meeting was also attended by Leonds Ribickis, Rector of Rga Technical University (RTU), who informed the University of Texas about RTUs activities and reached an agreement on closer cooperation between both universities, including staff and student exchange programs. The representatives of the University of Texas, which has experienced researchers of shale gas, acknowledged that for both universities a common area of activities is the researching of alternative energies. They also said that the universities could also cooperate in researching nuclear energy. In Texas, Dombrovskis also met Governor Rick Perry and discussed bilateral cooperation in the area of military and defense matters. The sides also discussed the experiences of the State of Texas in shale gas mining. Several mining spots are located in the territory of Texas, and Dombrovskis said that Latvia would be interested in engaging American experts in assessing the potential and economic feasibility of shale gas mining in Latvia. During a seminar for Texas businesses, the Prime Minister emphasized the advantages of investments in Latvia for instance, a taxation system that is one of the most competitive systems in the European Union (EU), as well as a favorable geographical location, implying a great potential for exports to the EU and the CIS countries. The business seminar was attended by representatives of the Latvian Investment and Development Agency and the American Chamber of Commerce in Latvia, who encouraged American companies to consider opportunities for starting or expanding cooperation with Latvian companies. Several Latvian companies, for instance, the IT company Tilde, presented their cooperation proposals. Bank of Latvia Economist: Producer Price Rise Moderates, But Still Fueled by Higher Energy Prices In June, producer prices continued on their upward trend, posting a 7.3% rise year-on-year, reported Bank of Latvia economist Krista Kalnbrzia. Their monthly increase of 0.5% mostly resulted from higher costs of energy production as the natural gas trading price moved up by 9.4%. On average, producer prices recorded a decrease in other sectors, Kalnbrzia wrote on the website Macroeconomics.lv. Reflecting further stabilisation and even moderation of global commodity prices, producer prices in manufacturing shrank by 0.1%, while those of export goods were 0.5% lower than in May, Kalnbrzia wrote. Prices of goods in manufacturing produced for the domestic market
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continued to grow; their rate of increase, however, saw a sharp slowdown. Prices of metal and wood products have decreased over the month; costs of the manufacture of computers, electronic equipment and furniture have also contracted. Prices of food manufactured for the domestic market continued to move up (+1.1%) as companies were obviously making up for the price declines of the previous years. Food exports saw a monthly price rise of a mere 0.1%. According to Kalnbrzia, in view of the expected price increase for natural gas, prices of goods produced for the domestic market will continue to grow at a more rapid pace than those of export goods. Although the price rise in energy-intensive sectors will persist on account of the growing (energy) costs, she reported, in manufacturing it will generally continue on the downward trend. Kalnbrzia concluded: It will basically be retailers who will decide on the extent to which the producer price stabilisation finds reflection also on the shop shelves. Since inflation expectations of general public are quite substantial, there is a risk that prices in the shops will be raised higher than necessary on account of a pick-up in costs. Inflation expectations and the low competitiveness in retail trade are factors allowing more easily to raise prices both for producers and retailers. Bank of Latvia Economist: Money Supply Leveled Out, Pronounced Rise Not Expected As economic growth remained moderate, a small drop in money supply was observed, yet overall it has been developing in a balanced manner for half a year, reported Bank of Latvia economist Vilnis Purvi. The monthly fluctuations are within 1%, pointing to entrepreneur and household caution with regard both to consumption and accruals, with bank and client caution with regard to lending and borrowing as an added factor, Purvi wrote on the website Macroeconomist.lv. The demand for cash currency did go up as the holiday season began, but the balance of deposits in banks dropped, bringing along a drop in the total currency in the economy. The drop in bank loan portfolio continued, with the rate of annual decrease in domestic loans reaching 9.2% in June. According to Purvi, money indicator M3, which characterizes the amount of cash and noncash currency in the economy, dropped by 1.0% in June, with the annual rate of growth of M3 falling to 5.4%. The annual rate of growth of cash currency in circulation dropped (to 14.2%), he reported, whereas the annual growth of deposits attracted by banks increased to 3.4%. The drop in M3 was determined by a drop in term deposits while the balance of overnight deposits increased moderately. The deposits of both private businesses and households increased slightly in June while the balance of lats deposits of public non-financial corporations decreased. In his commentary piece, Purvi wrote that the drop in the balance of loans was determined in June by the almost constant drop in loans in euro (by 1.6%), whereas loans in lats dropped by only 0.5%, with their annual growth reaching 4.7%. Purvi concluded: The current course of economic development along with the drop in industrial confidence indicator and the cautious attitude of consumers in conditions of rising prices still do not ensure a stable renewal of money supply growth; nor can we can expect it in the near future. Likewise, no increase in lending is expected at least for this year because of the still unknown plans for cutting the 2012 budget deficit and the potentially unstable situation in the external markets. For that reason, the most important precondition for a positive development in money supply in the relatively near future would be a consistent effort by the government in drafting the 2012 budget, avoiding tax increases and ensuring deficit cuts in the budget by limiting expenditure.

Latvian Unemployment Drops to 12.3% in Second Half of July The registered unemployment rate in Latvia in the second half of July this year was 12.3 percent of the economically active population, declining 0.1 percentage points from the week before, BNS reported, quoting information from the National Employment Agency (NVA). According to BNS, the number of the jobless registered with the NVA on July 24 was 138,961. The news service also reported that, among Latvia's regions, the lowest jobless rate (9.1 percent) was observed in the Rga region, as usual. The western Latvian region of Kurzeme followed with 12.9 percent; the central Latvian region of Zemgale with 13.4 percent, the northeastern region of Vidzeme with 13.9 percent; and the eastern region of Latgale still showed the highest unemployment rate, at 20.5 percent. According to BNS, the Latvian capital Rga showed the lowest jobless rate compared to other largest towns in Latvia: 8.5 percent in the second half of July. The northwestern Latvian town of Ventspils followed with a 9.5 percent unemployment rate; Jelgava in central Latvia also had a 9.5 percent rate. The highest unemployment rate was still observed in the eastern Latvian town of Rzekne, at 18.2 percent, BNS reported. According to BNS, on July 17, 2011, the unemployment rate in Latvia was 12.4 percent of the economically active population, with 139,986 jobless registered with the NVA. Foreign Affairs President Presents Credentials to Latvian Ambassador to Canada During an official ceremony at Rga Castle on July 21, Latvian President Andris Brzi presented letters of credence to the upcoming Ambassador Extraordinary and Plenipotentiary to Canada, Juris Audari. Audari has been with the Ministry of Foreign Affairs since 1992. During the 20 years of his diplomatic career, Audari has held various positions in the Ministry of Foreign Affairs, including Consul General to St. Petersburg, Advisor at the Latvian Embassy in Italy, and Undersecretary of State at the Ministry of Foreign Affairs. Since 2004 Audari has been the Ministrys Special Assignments Ambassador to the Latvian Diaspora. Juris Audari will replace the present Latvian Ambassador to Canada, Marers Krams, who, following his service in Canada, has returned to the position of Special Assignments Ambassador to the European Union Directorate. This year marks the 20th anniversary of the resumption of diplomatic relations between Latvia and Canada. Latvian-Canadian political diplomatic relations are stable and constructive, and the countries successfully collaborate in international organizations. Latvian, Lithuanian Presidents Agree on Closer Cooperation at E.U. Level Latvian President Andris Brzi made on an official visit to Lithuania on July 19. In Vilnius, he met with the countrys top officials, including the President of Lithuania and the speaker of the countrys parliament. Brzi also placed flowers at the Antakalnas Cemetery during a special ceremony. President Brzi was welcomed to the Presidential Castle by Lithuanian President Dalia Grybauskaite. At a news conference after their meeting, President Brzi expressed his thanks to the Lithuanian President for her hearty welcome and invited her to pay a state visit to Latvia. During our discussion, we agreed to become actively involved in dealing with issues that we have in common so that we can arrive at joint positions on European Union issues, President Brzi said. He added that Lithuania is Latvias leading trading partner, which is very important for Latvia. Brzi added that the two presidents discussed in great detail issues that are currently on their countries agenda. One of these issues was the construction of a nuclear power plant at Visaginas. President Brzi said that Latvia fully supports this historically important project in Lithuania, because Lithuania
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has all the necessary conditions to implement it without any delay. Asked about Latvias participation in the Visaginas project, President Brzi answered that Latvia does not have the financing to take part in this project, but after evaluating the situation at Latvenergo and receiving information about how positively the processes in Lithuania are developing, I can say with certainty that Latvenergo will be able to become involved in the project. That will be not only an important business project, but also a political decision. President Brzi also said that he and President Grybauskaite discussed the development of the Rail Baltica project, agreeing that it is important not just for the Baltic States, but also in terms of the fact that the Baltic States would then move closer to the European Union with their own infrastructure projects. The third issue discussed by the two presidents was the construction of a liquefied natural gas terminal in the Baltic States. President Brzi told journalists that it is just a matter of time before the issue is resolved, saying that this will happen during the next few years. He also said that one of Latvias greatest priorities is the subterranean gas storage facility at Inukalns, where the amount of stored gas is sufficient to supply the needs of all three Baltic States. President Grybauskaite, for her part, noted that there is room along the Baltic Sea shoreline for all possible terminals. She added that there could be a discussion about three terminals, one in each country, with one terminal larger than the others. Grybauskaite confirmed that Lithuania supports Latvias intention of building the larger terminal. At the conclusion of the press conference, President Grybauskaite told the new Latvian President that politics are an example of honest and selfless work on behalf of the people, not of individual groups or politicians themselves. She said that she hopes that this is how President Brzi will work during his term in office. More on President Brzis visit to Lithuania: http://www.president.lv/pk/content/?cat_id=605&art_id=18163. Baltic States Demonstrate Unity in Protesting Austrias Release of Mikhail Golovatov On July 18, the foreign ministers of the three Baltic countries signed a joint letter protesting the Austrias release of retired KGB colonel Mikhail Golovatov, a former commander of the Alpha Group who is accused of war crimes in Lithuania. The crimes are related to an attack on the State Radio and Television Building and TV Tower on January 13, 1991, in Vilnius, which resulted in the death of fourteen people and the injury of several hundred. Golovatov had been detained at Vienna airport on July 14 on a European Arrest Warrant issued by Lithuania, but was subsequently released by Austrian authorities. The letter was presented to the foreign ministers of the EU member states and to the Vice President of the European Commission, Viviane Reding. In the letter, the three Foreign Ministers Audronis Aubalis (Lithuania), irts Valdis Kristovskis (Latvia), and Urmas Paet (Igaunija) emphasized that the European Arrest Warrant was issued within the EU as an instrument of mutual trust and was expected to assure an effective rule of law on occasions when suspects are detained and extradited, particularly when they are accused of war crimes and crimes against humanity. The decision to release Golovatov impairs the effectiveness of international legal cooperation in criminal cases and lessens the significance of the EU solidarity principle for the member states, the minister wrote in the letter. The letter also accentuates that Golovatov was released 24 hours after he was detained. Though we understand the principle of judicial independence, we are still concerned about the speed at which the Austrian authorities decided to release the individual, the letter says. On July 17, Latvian Foreign Minister Kristovskis, in solidarity with Lithuania and its people, expressed his deep regret about the decision of the Austrian Prosecutor Generals Office to
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release and not extradite Golovatov to Lithuania. The crimes performed in 1991 in Vilnius and Rga have no limitation, the Kristovskis stressed. Two days later, on July 19, Kristovskis summoned the Austrian Ambassador to Latvia, Hermine Poppeller, to the Foreign Ministry to offer explanations about the decision of the Austrian authorities to unexpectedly release Golovatov, During the meeting the minister presented a note to the Ambassador requesting the Austrian side to furnish the Latvian Foreign Ministry with information on legal and any other considerations behind the decision taken by the Austrian authorities to abruptly release Golovatov. Kristovskis also expressed Latvias support of Lithuania to eliminate any possibility of impunity for crimes committed by the communist regime against the Baltic people. State Secretary Participates in Opening of Latvian Honorary Consulates in California During Prime Minister Dombrovskiss official visit to the U.S., State Secretary Andris Teikmanis of the Latvian Foreign Ministry participated in the opening of two Latvian honorary consulates in the State of California: in Rancho Santa Margarita and in San Francisco. The consulates will represent Latvias interests in Southern California and Northern California, respectively. Dr. Juris Bunis will serve as honorary consul in Southern California, based in Rancho Santa Margarita, whereas Liga Hoy will be honorary consul in Northern California, based in San Francisco. Both are American citizens of Latvian descent and have earned respected in their communities. They are ready to help in establishing business, cultural, and academic contacts between Latvia and the State of California. Together with the newly-opened honorary consulates, Latvia is now represented by fifteen honorary consuls in the United States. Each of them works on a voluntary basis and does not receive any compensation. For contact information of the Latvian honorary consuls in the United States, please visit the Ministry of Foreign Affairs website: http://www.mfa.gov.lv/lv/vestniecibas-parstavniecibas/?lv=1&type=5. Society Highest Voter Turnout Abroad in Latvia's Referendum Reported in UK The highest voter turnout abroad in Latvia's referendum on the dissolution of parliament was reported in the UK, according to BNS. In all, 1,501 Latvian citizens cast their votes in the referendum at the six polling stations that were set up in the UK, reported BNS. Nearly one fifth of all Latvian voters taking part in the poll abroad, or 550, cast their votes at the polling station in London. According to BNS, another 1,239 Latvian citizens residing in the US took part in this Saturday's referendum by casting their ballots at 13 polling stations, and 593 Latvian citizens voted in Ireland. Also, 485 Latvian citizens voted in Sweden, 480 in Australia, 479 in Germany, 455 in Canada, 349 in Norway, 267 in Belgium, 217 in Russia, 190 in Denmark, 186 in Estonia, 134 in the Netherlands and 105 in Luxembourg. In all, 7,547 eligible voters cast their ballots in this Saturday's referendum at polling stations set up in foreign countries, BNS reported. Of these voters, 7,166 voted for and 371 against the move. Ten ballot papers were found to be invalid. Sigulda Opera Festival Presents Open-Air Performance of Eugene Onegin The 19th annual Sigulda Opera Festival will be held this hear from July 29-31. The key event at this years festival is a performance of Tchaikovskys Eugene Onegin, specially adapted for the Sigulda Castle ruins, on July 30 at 9 p.m. The international cast for the performance features Maija Kovaevska of Latvia as Tatyana, Nathan Gunn of the U.S. as Onegin, Evgeny Akimov as Lensky, and Marija Gorcevska as Olga.
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Other cast members include Krijnis Norvelis, Kristne Zadovska, Antra Bigaa, and Guntars Ruis. The performance will be conducted by Aleksandrs Viumanis and directed by Yury Alexandrov. The set and costume designer is Vyacheslav Okunin from the Mikhailovsky Theatre in St. Petersburg. The internationally-renowned Latvian pianist Liene Circene will raise the curtain of the 2011 Sigulda Opera Festival with her solo concert on July 29, followed by a performance of local musicians the next day. The festival will close with a sacred music concert at Sigulda Evangelical Lutheran Church during the day and a Gala Concert in the evening. The latter features performances by tenor Pavil Breslik (Slovakia), soprano Inga ubovska (Latvia), Evgeny Akimov, Maria Gorceva, as well as singer Amanda Bamakova from Alksne. The orchestra and choir will be conducted by Vladimir Kiradjiev (Austria). Tickets for the festival range from LVL 10 to 30 and are available at the LNO box-office, Sigulda TIC, Bieu Serviss, and elsewhere online. Weekly Flea Market Unveiled at the Former VEF Factory in Rga A weekly flea market will take place every Saturday for the rest of the summer in the territory of the former VEF Factory in Rga. The market is located right beside the VEF Art Center, at Unijas iela 8/7, entrance from Brzaunes iela. Offerings at the weekly free market, organized by the vintage shop Retro Spectro, will be incredibly wide and diverse, ranging from vintage household objects and sporting equipment to books, jewelry, and clothing. On the flea markets website, the organizers explain their motivation for putting together the Rga Flea Market. Our aim is pretty clear: to give Rga a regular and proper flea market where you can find just about anything, starting from old books and filigree porcelain creations, unusual objects for transportation, and musical instruments from almost ancient times, to very funky shoes from your grannys youth and some Polaroidsas well as much, much more! Just like the box of chocolates in the move Forrest Gump, where you are unable to guess which filling youre gonna get! Thats why its so awesome to shop at flea markets and thats exactly why we created this one. In leading up to the flea markets, the organizers had put out an open call for vendors to sell their wares. Vendors were encouraged to send brief descriptions of their wares, as well as digital photographs of the items. This helped ensure that goods are suitable for sale, instead of just being suitable for throwing out. First established in 1932, VEF, an acronym for Valsts elektrotehnisk fabrika (State Electrotechnical Factory), was the largest factory in Latvia during the Soviet period and the leading producer of telecommunications equipment and electronics in the U.S.S.R. The historic Art Nouveau factory was built in the late nineteenth century, and the iconic Minox miniature camera was designed at the factory in 1936. At the factorys peak, in 1991, VEF employed over 20,000 people. VEF was privatized and reorganized in the late nineties. Since 2010, portions of the former factory have been transformed into the VEF Art Center, now home to exhibition spaces, artists studios, and workshops. The center hosts poetry readings, art exhibitions, concerts, theater performances, and other related events. The flea market is open from 10 a.m.17 p.m. every Saturday; entrance is free of charge. More info on VEF Flea Market: http://retrospectro.wordpress.com/. More info on the VEF Art Center: http://www.totaldobze.com/ArtCenter/. New Wave 2011 International Competition of Young Pop Singers Kicks Off in Jurmala On July 26, the annual New Wave 2011 International Competition of Young Pop Singers kicks off in the Latvian resort town of Jurmala. The competition will last for six days, featuring a range
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of concerts and performances by young artists from all over the world. The winner will be announced on July 31. According to the festivals website, The New Wave International Contest of Young Pop Singers has been a significant event not only in Russia and Latvia but also in the CIS and other countries for several years. The televised events are broadcast all over the former Soviet Union, and are followed by millions of TV viewers. The New Wave competition was first organized in 2002 by Russian composer Igor Krutoy and Latvian composer Raimonds Pauls. The pair wanted to create a musical forum that would help discover new talented artists not only in Russia, but also in other countries. Since that time, numerous up-and-coming pop singers have performed at the annual competition, traditionally held in the Dzintari Concert Hall in Jrmala. This years performers include Yuzary of Belarus, Erik of Armenia, Roger Ricco of Brazil, Jayden Felder of the United States, Jenna Hof of Togo, as well as participants from Ukraine, Kazakhstan, Poland, Finland, and Russia. Latvia will be represented by the pop singer Candy. The New Wave competition traditionally draws an influx of VIP guests from throughout the former Soviet Union, particularly Russia, who pack the resorts hotels, restaurants, and beaches throughout the six-day festival. The star-studded event is therefore widely reflected by local paparazzi and the tabloid press. Link to the festivals website: http://newwavestars.com/eng/. Articles of Interest Bloomberg: Latvia Referendum Dissolves Parliament: http://www.bloomberg.com/news/2011-07-24/latvia-may-elect-new-premier-after-referendumsinks-parliament.html. Associated Press: Fed Up with Corruption, Latvians Sack Lawmakers in Historic Referendum: http://www.washingtonpost.com/world/europe/latvian-voters-appear-ready-to-sack-theirparliament-in-a-national-referendum/2011/07/23/gIQA5TfXVI_story.html. Agence France-Presse: Latvians Vote Overwhelmingly to Force Snap Election: http://my.news.yahoo.com/latvia-braces-election-plebiscite-041454171.html. New Europe: Latvia: Political Dj vu?: http://www.neurope.eu/articles/Latvia-Political-djvu/107790.php. Al Jazeera: Latvians Back Dismissal of Parliament in Vote: http://english.aljazeera.net/news/europe/2011/07/2011723215535185126.html. Reuters: Latvians to Fire Parliament, Head to New Election: http://uk.reuters.com/article/2011/07/21/uk-latvia-referendum-rptidUKTRE76K4ML20110721 Reuters: Timeline: Latvia Heads for New Elections: http://uk.news.yahoo.com/timelinelatvia-heads-elections-162249771.html. Bloomberg Business Week: Latvia to Weaken Oligarchs, Join Euro in 2014, Dombrovskis Says: http://www.businessweek.com/news/2011-07-21/latvia-to-weaken-oligarchs-join-euro-in-2014dombrovskis-says.html Rancho Santa Margarita Patch: Local Doctor and Prime Minister Cut Ribbon on Consulate http://ranchosantamargarita.patch.com/articles/local-doctor-and-latvian-prime-minister-cutribbon-on-consulate. Mother Jones: Inside Latvias Gay Rights Battle: http://motherjones.com/media/2011/07/gaypride-latvia-kaspars-goba. Stanford University News: Bridging the Innovation Gap: From Latvia to Silicon Valley: http://news.stanford.edu/news/2011/july/latvia-silicon-valley-071911.html.

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THE LATVIAN INSTITUTE The Latvian Institute promotes knowledge about Latvia abroad. It produces informative materials and works closely with international media professionals in developing a wide variety of communications projects. Contacts: Pils iela 21 Rga, LV 1050, LATVIA Phone: (+371) 67503663 Fax: (+371) 67503669 Email: info@li.lv Web: www.li.lv Twitter: www.twitter.com/LatviaInstitute Facebook: http://www.facebook.com/LatvianInstitute

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