According to ehistorylib, in 2005, Latvia had a population of around 2.3 million people and a GDP of $15.3 billion, making it one of the wealthier countries in Europe. The economy was largely reliant on services (including finance, IT and tourism) and foreign investment, with other industries such as manufacturing and agriculture also playing an important role. Unemployment rates were quite low at around 8%, while poverty levels remained quite high with an estimated 25% of the population living below the poverty line.
Foreign relations in 2005 were generally positive with Latvia being a member of various international organizations such as the European Union (EU) and NATO. In addition, it maintained diplomatic ties with many countries in Europe, Asia and North America. It was also an important ally to both Russia and Germany and had close trade ties to other European countries.
Politically, Latvia was a parliamentary democracy during this time period with executive power vested both in the Prime Minister who could appoint ministers responsible for executing policy decisions as well as the President who could veto any legislation passed by Parliament. Furthermore, there were three branches of government: Executive (Prime Minister), Legislative (Parliament) and Judicial (Constitutional Court). These branches worked together to ensure that laws were properly enforced throughout the country.
Latvia. Latvia’s relationship with Russia was further complicated during the year, while ties with the United States were strengthened.
According to countryaah, Riga is the capital and one of the major cities within the country of Latvia. Latvia President Vaira Vīke-Freiberga accepted his Russian colleague Vladimir Putin’s invitation to attend Moscow in May at the 60th anniversary of the Soviet Union’s victory over Nazi Germany in World War II. The decision was applauded by the Kremlin, until it became clear that Vīke-Freiberga intended to use the invitation to carry out Latvia’s vision of history: the defeat of Nazi Germany was followed in the Baltic by new terror during the Soviet occupation. Vīke-Freiberga sent a declaration of this to heads of state and government, and she demanded Russia’s recognition that the Baltics were illegally occupied by the Soviet Union. Latvia received support from the EU, but the Kremlin reacted angrily and reiterated its previous position that the Baltic countries joined the Soviet Union by mutual agreement.
- Also see abbreviationfinder.org for how the acronym LV stands for the country of Latvia and other meanings of this two-letter abbreviation.
Moscow was also annoyed that US President George W. Bush, on his way to the 60th anniversary celebration in Moscow, chose to visit Latvia, explaining that the Soviet occupation of the Baltics was “one of history’s worst crimes.” Bush met in the Riga Presidents of the three Baltic NATO countries, all of whom supported the US invasion of Iraq and who have their own troops there. The fact that the summit was held in Riga was seen as a political success for Latvia’s president.
Russia promised at the 60th anniversary in Moscow to sign the border agreement that Latvia has been waiting for for years. But the Kremlin backed down since the Latvian government added a political declaration that Moscow perceived as territorial claims on Russia. President Vīke-Freiberga considered the declaration unnecessary and criticized his own government for having destroyed the signing of the border agreement.
During the year, the Latvia and Swedish governments ended up on a collision course on how to interpret the EU’s free movement of labor and services. The Swedish government supported the trade union Byggnads, which had put a Latvian construction company in the block because it refused to sign a Swedish collective agreement. The blockade led to the company giving up and its workers returning to Latvia, where the government saw Sweden’s actions as a violation of EU rules on free movement across borders. The Labor Court in Sweden granted Byggnads the right, but the case was taken to the EU court, where the treatment can take several years.
Figures during the year showed that Latvia in 2004 had the highest economic growth in the EU, when GDP grew by 8.5%. At the same time, Latvia was the poorest country in the EU with the lowest per capita GDP, 42% of the average.
The new era – a new center-right party led by Einars Repše – became the big winner of the parliamentary elections in October 2002, when it gained 23.9% of the vote. It immediately began negotiations with other right-wing parties to form a coalition government. Repše is distinguished by becoming Governor of the National Bank of Latvia at the age of just 30 years. He stated that he would fight corruption at the government level, considered by the anti-corruption organization Transparency International to be the worst in Europe.
In August 2003, the United States discontinued its military assistance to Latvia as a result of the government’s refusal to sign an agreement to grant U.S. citizens immunity from being brought before the International Criminal Court (ICC) for genocide, crimes against humanity and war crimes.
On 20 September 2003, a referendum was held on Latvia’s accession to the EU. 67% voted in favor, while 32.3% voted against. In particular, the arguments for inclusion were that the country was unable to cope alone and that accession to the EU would become a definitive manifestation in favor of democracy and rupture with the past as part of the Soviet Union. The campaign against admission, in particular, struck at nationalist, autonomous and that admission would transfer supremacy to Brussels, only 13 years after it was abandoned in Moscow. With the massive backing, Latvia and 9 other Eastern European countries joined the EU on 1 May 2004.
Prime Minister Einars Repše was forced to resign in February 2004 after the government coalition disbanded in September 2003. Immediately following the implementation of the EU referendum, 3 of the 4 parties in the Repše coalition accused of ruling on the basis of «threats and lies ». President Vaira Vîke-Freiberga appointed Indulis Emsis of the Bond Alliance as new Prime Minister.