In a wide-ranging speech at The European Institute on the increasingly pivotal role of Europe’s Northern Dimension, the President of Latvia, Valdis Zatlers, said his country has survived the economic crisis and is poised for healthy growth and entry into the Eurozone in 2014.
“Latvia was arguably the hardest hit country,” said Zatlers, because the global crisis coincided with an independent downturn in Latvia. “We had two options,” he said, “devaluation [of Latvian currency] or internal devaluation -- discipline by government and households.” Latvia chose the second option, internal austerity, and now sees its economy growing, with exports back at pre-crisis levels and budget deficits back to 3 percent of GDP by next year.
Zatlers says Latvia is on schedule to join the eurozone in 2014, notwithstanding the issues raised recently with the euro in Greece, Portugal and elsewhere.
Zatlers noted regarding the concept of Northern Europe that: “There is much in common politically and we share the same economic area among five Nordic and three Baltic countries.” He noted that while not all countries are in both NATO and the EU the countries of Northern Europe “enjoy the same economic space and we are eager to defend the same values.”
Zatlers said that the “reset” policy with Russia by the Obama administration has yielded “positive results in the region” and assisted Latvia in achieving “a significant breakthrough” with Russia, notwithstanding a long history of conflict and mutual suspicion. Zatlers visited Russia last winter and agreed, among other matters, with President Medvedev to launch a joint commission of historians to examine Latvian-Russian relations with the purpose of enhancing mutual trust.
Zatlers was not as sanguine about relations with Belarus, which he said has “taken a step back in its democratic reforms and overstepped the boundaries of acceptable behavior of a country in the EU Eastern Partnership program.” Zatlers added that Latvia would be exploring “targeted sanctions to stop the violations and to release the political prisoners.”
He added: “We have to assist the people of Belarus to travel and educate themselves outside Belarus. Nobody can bring democracy to a country unless its citizens demand it. But we can offer them experience of democracy through, for example our education systems.”
He noted that Latvia along with USAID and others is opening a business school in Minsk this September.
“I am optimistic,” said Zatlers, “because if you have a room with many windows, at least one will be open, and the fresh air will be coming in. I think this is the most pragmatic approach to the eastern partnership... We should not give up any efforts with our neighbors.”
Zatlers said Latvia supports NATO actions in Libya and has voted along with the U.S. in all instances. Latvia has not contributed forces to the mission because it lacks the relevant air force assets. Latvia has sent forces to Afghanistan and Iraq.
On the subject of energy, Zatlers indicated that Latvia has proposed to build a regional liquefied natural gas terminal that could act as an alternative to Russian supply.
On nuclear energy, Zatlers, a former orthopedic surgeon with experience in nuclear issues, said that it would likely take Japan and the rest of the world about 20 years to recover from the tragedy in Fukushima. “The whole world will be on standby, revaluating, making it safer,” said Zatlers. But he stressed that “finding the right place for nuclear energy is crucial.”
In remarks earlier this month Zatlers, who participated on the ground in the Chernobyl clean-up operations, cautioned against overreaction in Europe over the Japanese nuclear crisis. He warned against “creating fear in Europe,” where there has been loose talk of “apocalypse,” and praised the quick reaction of the Japanese government to the damaged Fukushima nuclear plants.
“I really admire what the Japanese did,” said Zatlers. “They kept the situation under control and they are very prepared. The disaster could have been much bigger than it was. We have to say ‘thank you very much’ to the Japanese,” he said.
Zatlers went to Chernobyl two weeks after the disaster there and was in the 30-km zone. He noted that in comparison to the Japanese, the Soviet government tried to hide what had happened and began to give some information only when a radioactive cloud reached Sweden. “At that time the cloud had already passed over Latvia. Not only didn’t they give any information to neighboring countries, but even we, who were on the inside, were kept in the dark.”