AGP Executive Report

Payments Resilience: Mastercard will require new European cards to support offline payments from 2027, building on functionality already available in Estonia and Latvia. Critical Minerals: The EU selected NPM Silmet’s Silmet 2.0 among 46 strategic raw-material projects; Estonia is pressing the company to end its reliance on Russian supplies, with early 2027 floated as a target. Renewable Energy: Estonia plans up to €5 million for municipalities that allow wind farms, aiming to encourage local backing for new projects. Business and Tech: Estonia expects to recover €25 million from Nordica’s former aircraft lessor, while space startup Golbriak raised €4 million to scale laser communications for satellites.

Art Market: Estonia’s Artists’ Association raised a record €2.3 million at auction, selling 159 of 162 works. The proceeds will clear its €700,000 fraud loss ahead of schedule and support artists. Payments: Eesti Pank Deputy Governor Andrus Alber says a digital euro could make payments more resilient by reducing reliance on a few providers based outside the EU. Critical Minerals: Estonia is pressing rare-earth processor NPM Silmet to set a deadline to end Russian raw-material reliance; its Silmet 2.0 project has been selected for EU strategic status. Digital Business: Estonia is courting Indian tech firms and talent through e-residency, which lets entrepreneurs establish and manage EU companies online. Startup Funding: Estonian space startup Golbriak Space raised €4 million to scale laser communications for satellite constellations.

Digital Payments: Eesti Pank deputy governor Andrus Alber says the digital euro could make payments more resilient during crises and reduce reliance on a small number of non-EU providers. Critical Materials: Estonia is pressing NPM Silmet to set an early-2027 deadline to end Russian raw-material use, as its Silmet 2.0 project gains EU strategic status. Business Welcome: Minister Liisa Pakosta is inviting Indian tech firms and entrepreneurs to use e-Residency to establish EU businesses from Estonia. Investment: The government plans up to €5 million for municipalities that allow wind farms, while space startup Golbriak Space has raised €4 million to expand its satellite communications technology. Aviation: Estonia expects to recover €25 million from Nordica’s former aircraft lessor.

Public Finances: Economist Raul Eamets argues Estonia’s debt burden is being overstated as the state budget enters a difficult debate in a minority parliament. Industrial Growth: Industrial output rose 4.5% in August, its strongest growth in seven months, while inflation climbed to a four-month high. Clean Energy: The government is proposing payments of up to €5 million per municipality to encourage wind-farm development, with at least €12 million planned for 2027–28. Critical Materials: The EU named NPM Silmet’s expansion a strategic project, and Estonia wants a clear deadline for the company to end its reliance on Russian raw materials. Digital Business: Estonia is courting Indian entrepreneurs and IT talent through e-residency, which lets founders run EU-based companies digitally. Startup Funding: Estonian space startup Golbriak Space raised €4 million to expand laser communications for satellite networks.

Digital Trade: Estonia is courting Indian IT firms and talent through e-residency, while backing an India-EU free-trade deal to expand digital services and investment. Wind Power: The government proposes up to €5 million per municipality to encourage wind farms, with €12 million planned for 2027–28; eligible plans must include at least five turbines. Trade Policy: Estonia and its Baltic neighbours want the EU to ban Russian grain transit, arguing European routes should not help Moscow earn revenue while it disrupts Ukrainian exports. Strategic Industry: Estonia says Silmet must set a deadline to end its use of Russian raw materials as its critical-minerals expansion gains EU strategic-project status. Public Finances: Estonia plans to recoup €25 million from Nordica’s former aircraft lessor. Investment and Innovation: Foreign-controlled firms make up 12% of Estonian businesses, the EU’s second-highest share; Estonian startup Golbriak Space has raised €4 million for laser satellite communications.

Fuel Costs: Lux Express is raising fares by €0.50–€1 on Tallinn–Narva and Tallinn–Pärnu routes as diesel costs exceed forecasts by more than 30%. The government has rejected a fuel-excise cut, citing an estimated €210 million annual revenue loss if rates fell to the EU minimum. Circular Economy: Tartu could get a solar-panel recycling plant, with Epler & Lorenz receiving nearly €500,000 in EU funding to develop the facility. Estonia recorded about 100 tonnes of panel waste last year, but volumes are expected to grow. Startup Funding: Estonian space communications firm Golbriak Space raised €4 million to expand production of laser terminals for satellites and aircraft. Industry and Sanctions: Estonia asked the EU to remove a Russian rare-earth supplier and an associated person from a draft sanctions list, saying the materials are critical to NPM Silmet, an Estonian processor serving European industries including wind energy. Business Ownership: Foreign-controlled firms made up 12% of Estonia’s producer enterprises in 2024, the second-highest share in the EU after Luxembourg.

Supply Chain: Estonia asked the EU to remove a Russian metals producer and its CEO from the proposed sanctions list because the company supplies materials to NPM Silmet. The move buys time for the Estonian processor to find alternative sources. Cybersecurity: Elisa and If Kindlustus launched cover for consumers facing cyber fraud, identity theft and online shopping scams, including possible legal and psychological support. Energy: A new 74-megawatt solar park near Tartu highlights the sector’s dilemma: abundant sunny-day generation can push wholesale prices down, while grid upgrades may raise network fees. Business: Estonia’s spa association warns that new facilities opening in 2027–28 could outnumber customers able to afford them. Company News: Estonian ride-hailing firm Bolt has been denied permission to appeal a UK VAT ruling, leaving an estimated £190 million tax bill in dispute. Industry: Estonia’s industrial output rose 4.5% in August, its strongest growth in seven months, helped by a surge in energy production.

Regional Economy: Estonia’s county centers have gained better amenities, but local commentators warn that without viable businesses and well-paid jobs, small towns will keep losing residents. Competition: Lithuania’s competition watchdog has ordered MM Grupp to sell an Apollo cinema after finding its position in Vilnius had become too dominant. Supply Chains: Estonia asked the EU to remove a Russian rare-earth supplier to Silmet from its proposed sanctions list, while the processor seeks alternative sources. Business Growth: Estonia-based ELEKS has bought a majority stake in ADM Interactive, with plans to expand the digital services firm’s local workforce. Retail: Estonia recorded 6% year-on-year retail growth in August, the EU’s third-highest increase. Economic Climate: Estonia ranked 15th in the latest global economic freedom index, with a score of 7.92 out of 10.

Technology Investment: Estonia-based ELEKS has acquired a majority stake in Tallinn software firm ADM Interactive, with plans to expand its Estonian team and digital public-service work; financial terms were not disclosed. Prices and Travel: Inflation climbed to 3.5% in September from 1.5% in August, while Tallinn Airport set a September record of nearly 356,000 passengers, up 13% year on year, but expects winter traffic to ease. Property: Arco Vara agreed to sell the company behind its Bulgarian Botanic Lozen project for more than €6 million, redirecting its focus to Estonian developments, including Tallinn’s Luther Quarter. Local Business: Restaurant closures in Tartu reflect weak demand and rising costs, though brokers say Tallinn restaurant premises continue to attract new operators. Manufacturing: Tartu-based HUUM introduced its CORE Pro range of commercial sauna heaters, designed for larger venues.

Defense & Security: Estonia is shifting troops closer to the Russian border under an “active defence” push, while EU talks consider tighter restrictions and extra checks for Russian diplomats amid hybrid attacks. Public Services & Social Policy: Estonia faces a critical specialized care shortage, with just over 2,000 people waiting and only about 700 ready to start immediately. Economy & Prices: Estonia’s inflation jumped to a four-month high in September as housing and transport costs rose. Aviation & Jobs: airBaltic plans to cut up to 700 jobs across Riga, Tallinn and Vilnius as it restructures around a smaller Airbus A220 fleet and tighter network. Transport & Trade Links: Viking Line and TT-Line signed a joint operation agreement for a Finland–Estonia ferry route starting in Q1 2027. Business & Industry: Luminor granted EUR 1.8m to forestry firm LIVO Mežs to expand capacity and exports. Energy Regulation: Estonia allocated €2.2m to set up a nuclear safety regulator within TTJA in 2027. Tech & Governance: Oxford Insights says cities—including Tallinn—are integrating AI into public services without a shared readiness framework. Culture & Media: Latvia’s “Netflix tax” debate is heating up as film industry groups question a possible U-turn. Industry Spotlight: HUUM unveiled CORE Pro sauna heaters at interbad, and the Estonian Sauna Trust launched an international quality mark at the same fair.

airBaltic Restructuring: Latvia’s national carrier plans to cut about 500–700 jobs across Riga, Vilnius and Tallinn as it shrinks its Airbus A220-300 fleet and leans more on year-round ACMI partnerships, with the new structure expected by mid-October. Border & Migration: Estonia’s Police and Border Guard Board has stepped up checks in Valga and other transport hubs after illegal entries rose, including many migrants from East Africa and South Asia. Security Posture: Estonia is moving key units closer to the Russian border under an “active defence” approach, while EU talks consider tighter restrictions and extra checks for Russian diplomats amid hybrid attacks. Justice & Migration Crime: Estonia’s justice ministry proposes tougher penalties for migrant smuggling, citing hybrid threats and a rise in attempts to cross the border illegally. Energy & Regulation: The government earmarks €2.2m to set up a nuclear safety regulator at the TTJA in 2027. Transport & Trade Links: Viking Line and TT-Line sign a joint operation for a new Helsinki–Muuga ferry route starting Q1 2027. Economy & Living Costs: Eurozone retail sales edged up 0.1% in August; Estonia’s retail rose 0.9%. Circular Economy: Estonia, Latvia and Finland pilots under SustainaCycle test easier textile and waste recycling access, targeting reuse or recycling of at least 60% of collected material.

AI & Cities: Oxford Insights says cities are rolling out AI in public services without a shared way to measure readiness, safety or accountability, and proposes a City AI Readiness Index including Tallinn, Helsinki, London, Seoul, Montreal and Abu Dhabi. Aviation Restructuring: Latvia’s airBaltic plans workforce adjustments that could cut about 500–700 jobs across Riga, Vilnius and Tallinn as it implements a new business plan after a Chapter 11 filing and seeks financial stability. Energy & Industry: Eurostat reports euro area and EU industrial producer prices rose 1.9% in August, with Cyprus up 0.2% month-on-month, as energy costs and turnover trends diverge. Hydrogen & Biofuels: Lhyfe’s Netherlands unit signed an MoU with Pioneer Next to explore renewable hydrogen supply for DeltaNor biomethanol in Delfzijl, with Estonia also in the company’s expansion plans. Trade & Diplomacy: Estonia opens a permanent embassy in Chisinau, boosting cooperation on EU accession, security resilience and business links. Transport Rules: Estonia is considering allowing truck drivers to work longer hours in emergencies to protect supply of essentials like medicines and fuel. Public Safety: Tallinn Transport says it reviews tram safety incidents after a child was left alone at a stop, while also noting most complaints are about schedule issues.

Estonia’s “active defence” shift: Tallinn is permanently moving its 1st Infantry Brigade from Tapa to Jõhvi, about 50 km from the Russian border, building new facilities in Narva, and expanding long-range strike plans with HIMARS and South Korean Chunmoo systems (up to ~300 km), as officials warn the next 1–4 years are critical. airBaltic restructuring: Latvia’s flag carrier says workforce “adjustments” could cut roughly 500–700 jobs across Riga, Vilnius and Tallinn as it restructures after a Chapter 11 filing. Tallinn tourism tilt: July data show Estonia’s recovery is uneven, with Tallinn hitting a record 455,000 overnight stays while other destinations still lag pre-pandemic levels. Housing market signal: A rare €4m apartment sale in Tallinn highlights a still-niche luxury segment as new-build prices push above €5,000/m². Industrial prices & output: Eurostat reports EU industrial producer prices up 1.9% in August; Estonia’s industrial output rose 4.5% y/y in August, driven by energy and electrical equipment. Public safety & crime: Police warn QR stickers near Estonian schools are linked to online drug sales.

Defense & Security: Estonia is permanently moving troops closer to the Russian border and building new facilities in Jõhvi and Narva under an “active defense” plan, while also buying long-range systems such as US HIMARS to deter or blunt a possible limited Russian move. Industrial Pulse: Statistics Estonia says industrial output grew 4.5% year-on-year in August, the fastest pace in seven months, led by utilities and mining. Energy Costs & Logistics: Diesel prices are squeezing waste collection firms and farmers, forcing renegotiations of local waste fees and raising transport costs. EU Budget Talks for Farms & Regions: Seventeen EU states, including Estonia, are pushing Ireland’s EU presidency to protect cohesion policy and the Common Agricultural Policy in the 2028–2034 budget. Transport Resilience: Estonia’s climate ministry is considering emergency rules to let professional truck drivers work longer hours to keep essential supplies moving. Real Estate Market: Fewer newbuild homes were sold in Q2, while existing-home sales rose. Tech & Society: Estonian museums are reshaping displays for TikTok/Instagram audiences as attention spans shrink. Business/Travel: Jet2 launched its Winter 2027/28 Christmas market programme, including routes to Tallinn, with 800,000+ seats on sale.

Latvia Election & Economy: Centrist PM Andris Kulbergs’ United List is set to stay in power after a strong parliamentary election result (about 35% of the vote, 42 seats), with coalition talks ahead and the campaign heavily shaped by fears of Russian hybrid pressure. EU Budget Fight: Seventeen EU leaders, including Estonia, urged Ireland’s EU presidency to protect farm and regional funding, warning cuts to the CAP and Cohesion Policy would weaken the bloc rather than modernize it. Fintech in Riga: UN:BLOCK Fintech will bring 600+ leaders to Riga on 15 October, with a heavy regulatory focus on MiCA, stablecoins, DORA, PSD3 and compliance support for startups. Estonia Labour Policy: An opinion piece argues Estonia’s minimum wage remains a key safeguard for low-paid workers, using the €946 monthly minimum to show how take-home pay supports against in-work poverty. Research Integrity & AI: A TalTech researcher says paper mills and AI-generated content are distorting research databases, with retractions only a small slice of the wider problem. Estonia Infrastructure Scrutiny: A decade-long gravel-road stabilisation case is being questioned after earlier road-works tests reportedly showed cracks soon after treatment. Crypto Sanctions: Japan added Moscow-linked crypto exchange Garantex to its asset-freeze list, tightening sanctions aligned with the US and EU.

Latvia Election Watch: Andris Kulbergs’ centrist, pro-Ukraine United List is set to stay in power after winning Latvia’s parliamentary vote with about 35% of the vote and a strong seat haul, while coalition talks will still be needed as fragmentation rises and voters weigh Russia-linked security fears. EU Budget Fight: Seventeen EU leaders, including Estonia, urged Ireland’s EU presidency to protect farm and regional funding in the 2028–2034 budget, warning cuts to Cohesion Policy and the CAP would weaken Europe’s competitiveness and food security. Riga Fintech Push: UN:BLOCK Fintech will bring 600+ leaders to Riga on 15 October, with a heavy focus on MiCA, stablecoins, DORA, PSD3, compliance and regulatory access for fintechs. Estonia Labour Policy: Elle Pütsepp argues Estonia’s minimum wage remains a key safeguard for low-paid workers, using the €946 monthly minimum and tax/pillar assumptions to show how pay lifts reduce in-work poverty risk. Estonia Social Policy: Marica Lillemets calls for a life-course approach for older people, saying Estonia’s healthcare and welfare systems leave seniors navigating unequal local capacity and rising costs. Estonia Business/Tech: Estonia’s Askend expands internationally with a new subsidiary and first export project, signaling continued Baltic tech push into foreign markets.