Examining Latvia's Challenges and Opportunities

Edgars Rinkēvičs, minister of foreign affairs of the Republic of Latvia, joins CFR's Stephen Sestanovich to discuss problems of European security in 2016 and beyond, his country’s evolving relationship with Russia, and the upcoming NATO summit in Warsaw. Rinkēvičs discusses the challenges facing Latvia amid an increasingly assertive Russia next door. He assesses the role of NATO is countering Russian irredentism in eastern Europe and evaluates priorities for Latvian foreign policy.

SESTANOVICH: Mr. Minister, welcome to the Council on Foreign Relations. Thank you very much for joining us.

I think the obvious place for us to begin is with a look at European security issues. In the past couple of years, the European security environment and discussion of security questions by European governments I think have fundamentally changed. And NATO now actually talks about security again, and that will be the subject of the summit in Warsaw. I wonder whether you could start our discussion by describing the way in which you see this new conversation about security, the way you see the new decisions taken by the alliance and by the United States in increasing its spending, its deployments, both of troops and equipment in Eastern Europe. And among other things, tell us whether you and other Baltic governments consider these measures adequate.

RINKĒVIČS: Well, good afternoon, everyone. And first of all, thank you for having me here in the Council on Foreign Relations. And also just want to thank for the opportunity to share some thoughts. But as we have discussed previously, I really don’t like long speeches or long remarks. I would rather prefer really an interactive discussion, questions, answers, debate.

SESTANOVICH: You’ll get it.

RINKĒVIČS: So from that point of view, having said that, now you will get an answer for about 35 minutes.

SESTANOVICH: (Chuckles.)

RINKĒVIČS: But let me just say a couple of things answering also to the questions you posed.

First, I have spent almost all my career in security and defense business. I’ve started in 1995 in the Ministry of Defense. I have seen the process of NATO enlargement. I have been part of it. I have seen the kind of debate 10 years ago that was almost like rushed in a kind of slogan: If NATO is not out of area, it’s going to be out of business. That was kind of I would describe old, good times. And now we are back to the kind of NATO 3.0 when we see the return to the core business, Article 5, the need to first of all defend all allies, all 28 allies, to provide a credible deterrence policy, particularly in the eastern flank.

And yes, you are right: I think that what we have seen in—over the past two years, especially after the illegal annexation of Crimea by Russian Federation, all the events in the eastern part of Ukraine, all the rhetoric, increasingly aggressive rhetoric coming from Kremlin, we have seen that the fundamental thinking has changed and has changed in Europe, not only in the alliance, but I would also say the whole European Union, even if we are of course all the time discussing what would be the best way how to address those challenges.

Second, well, I think that if you look back for what has been decided by the alliance, especially in 2014, I have repeatedly said that I think that those measures, reassurance measures taken by the alliance, sending troops to the Baltic region, to Poland, to provide some rotational presence, exercises, also strengthening the air policing mission, also providing naval patrols, those decisions have been adequate.

However, I think that we have to understand that still, the presence of the allied troops in the Baltics and Poland is not enough to provide credible deterrence. And that’s where we are advocating very much in the run-up to the Warsaw summit of the alliance in July, that we need to have long-term increased presence of NATO allies so that it really sends a strong message of deterrence. I am rather pleased that NATO defense ministers have taken right decisions two weeks ago. We still have around four months to go to prepare all the necessary decisions.

But I also want to say that it would be huge mistake to think that if there is no robust presence of allied troops in the eastern flank, that it would somehow appease Russia. I think that the only thing that we can say is that if there is a very strong and powerful message by the alliance, then there is also the necessary let’s say equilibrium of security and stability in the region.

So from that point of view, I am very much hoping that the discussions within the alliance evolve in the way of understanding by all 28 member states on the need to go back to the core business—to reinvent NATO 3.0, to some extent. And also, from that point of view, I think that if we have this credible presence, credible deterrence policy, then we can definitely also, to develop what has been discussed recently among foreign ministers of the alliance as well as between the secretary-general of NATO and Russian foreign minister, also the necessary resumption of the dialogue between NATO and Russia on some issues: Ukraine; also how we address some of challenges that we see as the sometimes lack of communication between militaries. But we can do it only, quoting—I believe that was Mr. Brzezinski at some point—that only strong fences make good—or at least somehow peaceful—neighbors.

So from that point of view, I would say that so far, we have been satisfied with the way how the alliance has responded. But I think that we also need to develop that policy.

Also we understand our own commitments. The Latvian government has made necessary decisions also to increase the defense spending. Our goal is to get to 2 percent of GDP by 2018. We had almost doubled—almost, I have to say; from 0.9 last year to 1.4 this year—our defense spending. But also, we see the need to develop the robust response also when it comes to hybrid risks, hybrid threats. And I’m also pleased that there have been right steps brewing last year, the NATO hybrid warfare strategy that addresses also those issues because they should understand that Article 5 has to be applied in a flexible way. I’ll stop here.

SESTANOVICH: Thank you.

You know, the secretary-general, Stoltenberg, said that NATO was committed to have as much presence in the east as needed. But I take it from what you’re saying is that there is not agreement on what is needed. Can you tell us a little bit about that debate and whether you’re—whether the Baltic states have particular targets at—either in terms of the, you know, size of deployments, kind of equipment and so forth that they—that would create credible deterrence in their mind?

RINKĒVIČS: Well, you know, I’m the foreign minister, and I will be very careful stating the amount of troops we would love to see. I will leave it for internal debate. But I think that there are some points I want to outline.

First of all, I think that NATO should address the challenge, the issue that we have already for some years. And I think that one thing that I would like to see is that we transform our Baltic air policing mission into the more robust air defense capability. We have got air policing mission since the very first day we have entered the alliance—that was March 29th, 2004, so almost 12 years ago. And those are four fighter places that were doing, well, the more surveillance mission. I think that what we need—also taking some scenario-based exercises so far—we really need to speak about credible air defense, especially that throughout the discussion of our defense development plans, especially more peaceful time, I would say, we have been always told before entering alliance and also after entering, don’t spend much on buying fighters, don’t spend your quite scarce resources in developing capability that the alliance has, but develop more what the alliance lacks, some niche capabilities. We had such talk. Now we see almost on a daily basis there are Russian reconnaissance planes, also fighter planes flying around the Baltic states. I think that would be one thing we should do.

Second is probably more political but still also an issue that we have to look also from a bit legal point of view is the way how we address the Article 5 and the authority of military command of NATO because you need a quick response, and somebody has to make decision before 28 ambassadors or ministers or whom else get in touch. So that I think this is something that even doesn’t require much of money or much of kind of, you know, military capability.

The third, I think that we really need to address anti-access and area denial capabilities. And talking almost like in my old job of being state secretary of the Ministry of Defense—I will try to back—to come back to the foreign ministry part—but finally, I do believe that yes, while we are having around—really differs from time to time, but if we have some hundred to two to three hundred soldiers, allied soldiers from the United States, from some European allies on the ground, I think that we still need to develop the way where we have a permanent presence, rotational presence of allied troops that is sufficient—and I leave it to military experts—to provide credible deterrence. I don’t believe it’s going to be company but I also don’t believe that we are going to speak about brigades. So I will—I will leave it in a bit murky way, to generals and to military experts to find the right answer, but I think that the current numbers are not enough.

SESTANOVICH: OK. Let me ask you another question that is—I think you’ll acknowledge is part of your portfolio as foreign minister, and that is your relationship with Russia. At the same time that the alliance tries to develop an effective strategy of deterrence and defense, there is nevertheless an effort by all members of the alliance to define their political relationship with Russia. And I wonder whether you could tell us a little bit about how you have approached that question, whether this is just an—you know, bad adversarial relationship, or whether there are positive elements of it that you feel create some confidence and stability on both sides? I mean, what’s—what is it that foreign ministers of Baltic states seek in their relations with their counterparts in Russia?

RINKĒVIČS: Well, you see, we all have seen the last eight or so years of both NATO-Russia relations, European Union-Russia relations, and to some extent also our bilateral relations as the very interesting period.

There had been high hopes of the 1990s and then beginning of 2000s that Russia would gradually develop into more liberal democracy. Then we have seen the first wake-up call I believe we have all missed, and that was Russia-Georgia conflict in 2008. We were very quick to come back to the business as usual. We were very quick to come to recent policy.

We were doing our part. And we were trying to find the way of political dialogue with Russia, even if we have, as you may imagine, quite long dispute over some history lessons, Soviet occupation of the Baltic states, while we have the long-standing discussion about minority issues, where we have seen also some attempts to use this as a kind of also political instrument to influence internal decision-making of the Baltic states and so on.

Then we have seen 2014 that I believe has become a game-changer. To some extent, because of our own historic experiences, we do have some similarities of what happened with Crimea: the breach of international legal obligations, the illegal annexation of the territory while some referendum that has been made in a very let’s say hasty way. We have seen also the situation as it developed—and still it’s developing— in the eastern Ukraine.

So from that point of view, I want to say that definitely, we believe that under current circumstances—and I don’t want to use this phrase that has been used some many times, but I don’t find any better—is that we cannot get to the business as usual, even if we sometimes hear in some capitals of Europe or some politician saying that OK, let’s try another round. I don’t believe that two lessons we have already got so far and the ongoing situation in Syria, even with some good news about possible cease-fire and some political settlement, has encouraging news. Then we have heard Prime Minister Medvedev in Munich talking about the new Cold War, outlining some of let’s say steps of current thinking.

So from that point of view, I think that the only way how to approach the relations with Russia is, first, to invest in the let’s say Article 5 capabilities of NATO to make sure very strongly that alliance is capable of dealing with whatever challenge it may face. Second, I do believe that we have to insist on our policies as we have declared them when it comes to, for instance, implementation of Minsk Agreement in Ukraine, that we shouldn’t somehow close our eyes on things that if we don’t insist on full implementation of agreement and we leave the situation as a frozen conflict, we are all better off.

But having said that, I also understand and I have also repeatedly said that we still have challenges we have to address as NATO, as EU and where also engagement with Russia is necessary.

One is what happened with Iran nuclear program. I know that it has not been terribly popular in some quarters here in the United States or in Washington, D.C. But still, I think that yes, the need for the dialogue on some issues I have just described, the need to engage where we see that it is in our interests to engage is needed. But I also believe that this engagement should be on principled terms. There was some talk a couple of weeks and months ago that it is probable that the situation in Syria and the whole Syrian settlement could be traded for Ukraine. I think that we have seen that it’s not so far the case, and I think that’s the right approach.

I also believe that yes, we can reopen NATO-Russia consulate ambassador’s level to discuss those issues I already mentioned previously: Ukraine; how we are let’s say increasing lines of communications of military so that, for goodness’ sake, we are not shooting down airplanes as it happened couple of months ago in Syria with—between—and this ongoing tension between Turkey and Russia.

So—but at the same time, I don’t believe that there should be anything that would let the world or Russian leadership to think that, well, another adventure is over; we can try the third one.

SESTANOVICH: Let me ask you one more question, if I could, before we open the conversation to the—to the rest of the group. And that has to do with the state of the European Union, which in some ways has eclipsed the issue of Ukraine as a kind of principal concern of European security for many European governments and for many in the United States, wondering about whether the—this is an institution or a grouping that can survive. Can you tell us a little bit about the internal challenges that you see to the European Union? I mean, you’ve been a member of the European Union as long as you’ve been a member of NATO. And it has become one of the most important forums for developing a European policy toward Russia. But there are plenty of challenges to the—to its future success. And maybe from the perspective of a Baltic government you can tell us a little bit about how you see those challenges.

RINKĒVIČS: I think that’s actually the most difficult question so far. (Chuckles.)

SESTANOVICH: Well, you don’t have to take 35 minutes for that one either, but it is—

RINKĒVIČS: It may take a couple of days of seminar.

SESTANOVICH: It is increasingly a concern for Americans, and so we ask all of our European friends to tell us what is going on.

RINKĒVIČS: Well, I think that the European—

SESTANOVICH: And you can take that in any way that you want. I mean, it can be narrow on the question of unity on Ukraine, or it can be on any number of other issues, including migrant crisis or, as I said, the future of the EU.

RINKĒVIČS: Ironically enough, actually, the unity of European Union vis-à-vis events in Ukraine, vis-à-vis Russia has been remarkable. Despite the fact that every time the prime minister of country XYZ or the foreign minister of country XYZ before the council meeting comes and says, well, we don’t like sanctions, we don’t like the approach, we think we should change, and he or she adds, but by the way, we will still be keeping unity. I have been participant in some of those meetings that took eight to nine hours where everyone was sometimes even coming to harsh disagreements on that or another policy. But remarkably enough, since March 2014, we have been able to keep that unity. And even if there has been a lot of critics saying—including to some extent, also, myself—we should have reacted faster and probably in a more forceful way, even despite the fact I think that has been quite a surprise to everyone, to Russia, to the United States and to the European themselves as well to some extent. So from that point of view, I think this is something that shows that the union and the foreign policy of the union is in far better shape than sometimes we love to—love to say or heed.

But when it comes to the general state of the union and the challenges, both external and internal, then I think we are in a perfect storm. We have the situation internally with some divide between the north and the south, the west and the east, and on both subjects. One is economic policies. The greatest probably manifestation of that has been the last year’s debate on Grexit, where you see the north, including my own country, wanting to apply very strict fiscal policies vis-à-vis stimulus and greater spending—and we have gone—Latvia has gone in 2008, 2011 through very difficult, very complex and very challenging adjustment program. And then we have this challenge now between the east and the west how to address the migration issue, with sometimes the rhetoric going too far from both sides. We have seen talks about moral imperialism on one hand, and then we have seen a lot of discussions about how to reconfigure EU budget and to punish those countries that have a bit different stance when it comes to the whole migration policy. So from that point of view, this is one.

Now we are having Brexit issue on debate, which while I really commend heads of state and government for the deals they have made, but I think that we all understand that we are not out of woods at all. Prime Minister Cameron will have to convince his people that the deal is good, and we have seen that this campaign is only now starting. But I believe also that this is going to be a defining moment for the whole EU. If U.K. leaves, I think we will be finding ourselves in a totally different geopolitical, economic and security situation. And that’s something that the Baltic states I believe—well, I can speak of course on Latvia, but I know that the same opinion also is shared by Lithuanian and Estonian colleagues—we don’t want to see U.K. leaving. That was the reason why we were prepared to take an extra step to quite sensitive issues of social benefits that affects also many of our citizens. We want to see U.K. in EU because it makes European Union stronger. But I also believe that membership in EU also makes U.K. stronger.

And then we have situation that is still far from also resolved. It’s very much related to the Brexit issue, to the Grexit issue, and to the future. I think that we are coming to the defining moment how many speed Europe we are going to have. And it is—even if I don’t like it—and I have been advocating against that for years—but I think that we have the fact that we are going to have multiple-speed Europe right now with countries of eurozone trying to find the way of better governance, integration. You have to address the Schengen zone, the free-movement issue, external borders. You have to address the governance issue of eurozone as such. And then you have to decide on how to really keep this internal cohesion as much as we can.

And then Syria, Libya, all the southern neighborhood.

SESTANOVICH: Those are foreign policy. And that’s going great, you said. (Chuckles.)

RINKĒVIČS: I said about one point that foreign policy is not as bad as it—as it’s sometimes presented. And the eastern neighborhood, where of course we are talking about Ukraine, but let’s not forget also about other countries. But there is pressure from Russia, and I much concerned about development in Moldova and the future of Moldova, as I am also concerned about Ukraine. And we all understand on one hand there is this Minsk Agreement elephant in the room, but also I think that there is increasing willingness in all capitals of the European Union to see that reforms in Ukraine are being implemented, that there is some progress in all fields—anticorruption, economic reform, introduction of free trade, and so on. And I think that the biggest challenge currently is to—first of all, to deal with challenges of 2016, which obviously the number one is Brexit. Obviously another is migration.

And it is absolutely true that those two may break the union apart if there is not understanding across, let’s say, all those for, let’s say, directions I mentioned from the north to the south, from the east to the west. That we have to—we have to compromise, that whatever breakup of European Union happens, it’s going to affect everyone. If we depart from Schengen, it’s not only about the free movement. It’s also about the enormous economic costs, because already some of my colleagues who have reintroduced internal border controls are telling me that the economies are suffering because the free movement of cargo actually takes much longer time. It’s already getting costly. I’m not speaking about fundamental value.

So from that point of view, we have been trying to be—Latvia has been trying to be as kind of voice of common sense. Also internally in my country the migration issue is a very hot topic. And most the people do not agree with policies as they have been proposed by a commission that has been quite difficult to convince parliament actually to agree upon certain position in the name of solidary, in the name of future of the union. But I think that they should all understand that even if sometimes it is very difficult all that that has been achieved, and from our point of view energy and issues that are related with self-security are very important.

And I would say that they would be the very strong advocates of no matter what we have to preserve the union as much as we can. But unfortunately, the union resembles a little bit itself as a kind of ill man. We are more or less understanding what the diagnosis is, but we cannot agree what would be the best treatment. And that’s something that I think two European councils, one in March and in June, will be confronting in a more serious way.

SESTANOVICH: Good. I want to recognize people as you put your hands for questions. Let me ask you to give your name and, where appropriate, an affiliation, and then ask a brief question, one, so that we can have as many questions as possible and a real discussion.

Roger Kubarych, we’ll start with you.

Q: Roger Kubarych from Craig Drill Capital.

I have not been to Latvia. I know some people have extensive business interests in Latvia. And they’re worried about a few things about economic potential and performance that does feed back onto your national security potential too. The three things that I hear the most is, one, the gray economy is too big, it’s growing, and it starves the government of tax revenues that can be deployed both for domestic and for national security uses. Second, that there are strains between Latvia and some of your partners, including maybe Washington, on money laundering, which is viewed to be a considerable burden, and a question on how things are run.

And finally, on population. Latvia has lost, according to their figures, 15 percent of its population in the last 15 years. That’s very large, probably the largest in Europe, and only taking in 1,500 refugees. Why can’t you take in more, when you’ve lost so much population? Because obviously economic potential has something to do with demographics. Do you want to make some comments on those concerns?

RINKĒVIČS: Are we taking one, or?

SESTANOVICH: Let’s do them one at a time, and then that’ll assure that everybody gets an answer from you, but a quick answer.

RINKĒVIČS: Right now.

SESTANOVICH: Yeah.

RINKĒVIČS: OK. You know, actually discovered trying to take three or four questions and then just keep one I really don’t like.

SESTANOVICH: Yeah, I’ve seen people do that.

RINKĒVIČS: Yeah, so I understand. (Laughter.) Just a couple of points. First of all, I would think that it would be great idea that you visit Latvia at one point and see some things with your own eyes. When it comes—when we speak about the economic potential and performance, well, I just want to say that according to our own statistics and Eurostat, Latvia is one of the fast growing economies in the European Union. While we are not doing as great as 10 years ago, before great bubble, when we had 11 percent of growth of GDP, but the solid 3 percent growth within eurozone and within European Union is still something that we should reckon.

And of course, as you may imagine, just the issue of tax collection, the better administration of tax collection, as well as gray economy, something that we acknowledge and we are working on this, especially that now the new government has been sworn in two weeks ago, there has been already work with the state revenue service to address some of those issues. So we are quite well-aware of that, but I also want to say that there have been considerable improvements, even if we compare this situation with some recent history.

On money laundering, indeed. This is something that we take very seriously. And it’s not only about our friends in the United States that are seriously concerned about that. I think that this is first of all something that we have seen as both the serious risk to national security—if you have dirty money it can influence your politics—but also we don’t want the reputation of a certain country. So from that point of view, we have taken recently very serious steps. And our financial regulator has imposed fines against certain banks going in millions of euros. Some bank officials have been fired. And there are some criminal investigations ongoing.

There has been also a change in leadership in our financial regulator. And actually, I have to say that this is not a campaign. There is a serious understanding when it comes to the leadership of the nation—president, prime minister, governor of the bank, Cabinet ministers, that this is an issue that has to be addressed. In this regard, I have to say also our accession process to OECD, that is hopefully in the final stages before we join, is of enormous help, because when you go through the process, when you apply stricter standards, the also there is a gradual change of culture.

And on population and migration, look, I think that what we should understand is that, first of all, since we entered European Union, and since you have free movement of people, many of—and Latvia is not unique in this respect—many of Central and Eastern European nations have seen people moving, because, of course, of economic disparities. If, let’s say, IT guy can earn twice or three times more as he, let’s say, in U.K. or in Germany or whatever else, of course, he will move. So from that point of view, I still believe that all the opportunities that also EU gives through cohesion funds are excellent way how to gradually reach the average level of living standard throughout the European Union.

Also, let’s not forget that during harsh economic crisis of 2008-2010, there were many people who lost their jobs. And, of course, they, naturally, were seeking opportunities. Now, I do hope that also this tendency’s going to reverse. There are some people coming home. There are some people who will not come home for obvious reasons, as they have settled. But I would say that the way how we see the current situation of migration cannot be described only in purely economic terms.

Look, the experience of many of Central and Eastern European countries, taking in people with totally different cultures and background is very limited. There is natural uneasiness in the public how they are going to integrate. Are they ready to do that? So if we have very serious concern by people, if we don’t have such experience we simply cannot admit tens of thousand people, especially taking into count our economic potential, and think that everything is going to be fine. We have seen also serious mistakes of integration in so-called old EU countries, or Western European countries. We don’t want to create enclaves of people who are—they are totally unintegrated. And we will never be able to compare Europe with the United States as a great melting pot. That’s a totally different story.

So from that point of view, our approach is, let’s get those numbers we have agreed. Those are—the current numbers are a little bit more than 700. Let’s work very seriously to get them integrated. And let’s look how the situation is developing. Another argument, which is not good argument but still I have to mention that, you see somehow it happened that there are countries where people really want to live, because of different social standards, because of different benefit policies.

And then there are countries where people really don’t want to settle. And that’s, by the way, one of the greatest challenges even to implement relocation and resettlement program. Everybody wants to go to Germany, to Sweden, but nobody can be convinced. And there is a dilemma. You simply cannot forcefully put people in a prison-like situation, say you will be living here and you will not be moving around as, let’s say, citizens or residence of EU. So from that point of view, there is also quite a disparity between also countries, and the way how people want to live.’

So besides that, also I have to say that we are very carefully monitoring that situation that is developing in many countries where the whole migration policy is pushing societies and political spectrum to the far right. There are already many countries where not very wise integration policies have created a great breeding ground for extreme right. And that’s more than one country. And that’s a tendency which I think we have to find a way how to balance. It’s not the great debate here in the United States I watched yesterday and this morning among presidential candidates. Those moments are also very familiar in Europe.

SESTANOVICH: OK, Cynthia and then George.

Q: Thank you. I teach—I’ve been teaching European Security for a couple of decades up at Columbia with Steve, and also across the street at Hunter. So I want to—we deal with a lot of soft security issues, obviously of the kind you just addressed. I want to turn to a hard security question that you started with. And that is, credible deterrence. You know, when the Baltic countries were first integrated into NATO, this was on a kind of assumption that—it was premised on a different relationship with Russia. And that’s because everyone knows that it would be almost impossible to credibly defend countries from an initial attack if Russia significantly rebuilt its forces.

And now that it’s achieved, you know, a certain capability, at least in its neighborhood, especially where you are, and as someone who looks at these questions on a military side, I want to tap into your former job as well as your present position, and ask you, not only, you’ve said, that you’re not convinced that the current measures by the U.S. and NATO are sufficient for credible deterrence—and it’s interesting the Pentagon has couched these in assurance more than deterrence, which I think is very revealing—they will be unlikely to be a credible defense, from anyone who looks carefully at this.

So a big puzzle is when we look back in history and we had a similar problem, even easier problem with Germany and forward defense, and our European allies did even less—I mean, sorry—did even more than they’re doing today in terms of contributing that defense of Germany, because we couldn’t meet our Lisbon force goals, or any other capabilities, we resorted to a nuclear deterrent. NATO is still a nuclear alliance. It was toying with the idea of reducing its dependence or off-shoring it before Ukraine. Now, all of that has gone quiet. But on the other hand, there’s been no public discussion of bringing back or changing or making more credible NATO’s deterrent—nuclear deterrence, which is based on some old gravity bombs.

What would you like to see NATO do in the nuclear arena? And should nuclear weapons be forward-based in, maybe, Poland or the Baltic states? Should we go back to a more active nuclear deterrent? Thank you.

RINKĒVIČS: Well, indeed, I actually lived through most of my career that argument. First, we started back in 1996, 1995 study on NATO enlargement with all the principles that had to be fulfilled. There was quite a discussion around the beginning of millennium that, well, the Baltic states are not defensible. And there have been arguments going back and forth. Of course, I have to say that the whole history of past 25 years have shown that our concerns about the way how Russia is going to develop was the—were correct ones. We have also lived through the period where there were not any plans drawn by NATO about defense of new members, not even including Baltic states, but the whole package of new members since enlargement of 1999, then subsequently in 2005, and then, if I’m correct, 2008—all those three waves.

But I think that we have also come quite a long way—it doesn’t mean that we are there yet—but we have come quite a long way from understanding that NATO is not only the political alliance and not, as I mentioned at the introductory statement or remarks, that NATO once has these troubles that what’s our business? We should go out of area so that we preserve at least some of our military capability and military competencies. And then we had also a very nice period where almost everyone was cutting defense expenditures, or most of defense expenditures were actually devoted to social programs, pensions, in many countries, including my own. We were developing quite good support programs for our military, that are also needed, but still capabilities were a little kind of put aside.

And now I think that we have seen that, first of all, since 2014, there has been a serious wake-up call for almost everyone. I probably misunderstood, but if I correctly understand the latest report from secretary-general, then the tendency of decreasing of expenditures—defense expenditures across the NATO has, probably for the first time in 20-plus years, has stopped—not that we are speaking about increase, but still there is understanding that enough is enough. There is a line. And there are so many challenges, not only in the east. We are now having NATO ships deployed to assist Greece and to assist European Union in a way to tackle migration crisis. So there are also some new tasks coming.

So from that point of view, I would say that, yes, we are currently going through the process of trying to understand both traditional Article 5, but also the hybrid Article 5 scenarios and the best ways how to respond. Do we have answers to all questions and challenges? No. But I am pleased that there is a very serious work ongoing how to close gaps—how to close gaps of host nation support, how to close gaps of, I’ve already mentioned, the area denial capabilities, and all those challenges we have seen. So from that point of view, I think that also from the point of view of history, also during those discussions about defensibility, and they are coming back, the example of West Berlin, the example of the high north of Norway is a good one.

But look, also at those times you can station in West Berlin a couple of battalions or brigades, and everyone understood that if there is a Soviet attack, with the massive forces they had in Eastern Berlin, then, yes, that would be the issue of taking that city in couple of hours or a day, but that would trigger the larger response. And I think that this is something that we are talking also right now. I would disagree with you that there is talk about assurance. Actually, we are talking now at NATO about assurance measures and deterrence measures. That’s a kind of change as well—and not changing of thinking only, let’s say, in the Baltic region, but actually across the whole NATO.

And from that point of view, yes, I do believe that we are in a period of capability—transitioning from capability-building as we agreed in Wales summit, to something larger. So from that point of view, I believe also that nuclear weapons should be part of that policy. But I don’t think that deployment of nuclear weapons in Poland or in the Baltic states would be something that I would call decisive factor of deterrence. I think that it really doesn’t matter where they are. What matters is that we understand that nuclear component is part of that policy.

SESTANOVICH: OK, I want to recognize three people for questions right now quickly, so that we can get an answer from the minister before we break at around 2:30. One, two, three, OK?

Q: George Schwab, National Committee on American Foreign Policy.

I happen to be in Latvia every year. And I’m struck by the ethnic minority, the Russian ethnic minority, 28 percent. Now, speaking about hybrid threats, you need only about 4(00) or 500 of the ethnic Russians, et cetera, to start something. Are you afraid of something along those lines because of the large ethnic problem in Latvia, and it is a problem as I’ve been led to understand by a number of people?

SESTANOVICH: Two.

Q: My name—is it working? I’ll speak loudly. My name is Kimball Chen, Energy Transportation Group.

I’ve worked with many governments on the development of gas security policy as well as the infrastructure and supplies related to achieve that, including countries like Romania, Turkey and so forth. I’m curious, you haven’t mentioned energy much as a subject for both unification issues and coordinated action issues within—with regard to the EU, and also as a matter of defense and deterrence in the broad sense of national security being not only hard military national defense capability, but also economic deterrence of aggressive actions which can gradually cause erosion of a state.

The particular issues I’m interested in are particularly the gas situation. There is an emerging, apparently, discord between Germany, for instance, and Eastern Europe, particularly over the development of the Nord Stream 2 pipeline, which will give Russia greater tools to access and negotiate with Western Europe, as well as preemptively to reduce a market for other non-Russian suppliers of gas. Do you and your government view gas supply and the larger energy issue and coordination with other EU states as a major or minor foreign policy and national defense issue? If so—if you view it as a great issue, what would you do about it?

SESTANOVICH: OK. We’ve lost our third question here, folded. I can—I’ll recognize another quickly, or we’ll just go straight to answers? Straight to answers.

RINKĒVIČS: OK. Well, the first question about the Russian minority, and that has been so nicely played in the recent movie by British Broadcasting Corporation and made some fuss at least in my country, and even in Russia. But look, I think that especially since Spring 2014 we have had so many journalists coming and searching a Russian insurgency in Latvia or in Estonia, trying to make great stories, and leaving with frankly nothing, because the situation is not black and white, as sometimes some journalists, or even some experts, would love to see.

Yes, we have considerable Russian minority. And we have been working, especially after gaining of independence, to integrate them to gradually making them part of our societies through different naturalization measures. And if you look at the current mood of the people who live in Russia, first of all, let’s not forget that not all of them are Russians. There are also Belarussians, Ukrainians, Poles who speak Russia, or so-called Russian-speaking people. And they, while being under intense Russia’s propaganda machine, because all of Russian TV channels are available in Latvia. You can watch news. You can see how great Russia is doing in foreign policy front, how great life is even if the economy is declining, but still you know there are so many great stories.

Even being under this kind of brainwash on a daily basis, many opinion polls have shown that while they do approve what President Putin has done so far with Crimea, with Ukraine, with Syria, they really don’t want to see anything like Ukraine in Latvia. That’s one thing. Second, we do understand also the need to address some very serious strategic communications issues that we have. That we have to constantly fight with propaganda, and also that we have to work on further naturalization, integration efforts. But I would definitely say that you cannot right now think in the terms that a Russian community would want to instigate something like we have seen in Ukraine or even in some other neighboring countries. So from that point of view, my sense is that this kind of risk, as it has been very often mentioned, is not as, let’s say, significant as some would love to see.

On energy, actually, I mentioned that it is in our great interest to see the energy union of the European Union developing. And in past weeks, our parliament has voted the amendment to the energy laws that actually provides the necessary legal condition for breaking the Gazprom monopoly, to say it mildly, but actually to—if I speak in the European bureaucratic language, then to implement the third package of energy policy, which means unbundling of supplier from infrastructure. While we are still expecting some court battles over that ruling, but I do believe that we have made significant step to break this dependency, 100 percent dependency, on Russian gas market.

Next two steps—and that’s where I believe, really, the EU is very important—is to use—and there are funds earmarked to connect the Baltic gas market with Poland, the Polish—so-called Polish-Lithuanian Gas Interconnector. We have been, in the true spirit of Baltic solidarity, sometimes struggling where the regional LNG—liquefied natural gas—terminal could be. But still, I think that what has been done by Lithuania—their national LNG, gas interconnector, unbundling of gas systems, also providing necessary legal condition—would leave us very soon in a position where we will not be any more dependent on only one supplier, so that wouldn’t be—that wouldn’t be the weapon to use against any of Baltic States.

And from that point of view, I also want to stress that it’s not only about gas, but it’s also about electricity, because we have also now developing some of electrical interconnectors—Finland-Estonia, Sweden-Lithuania—and we are gradually also entering the electricity market of Nordic countries.

So from that point of view, I think we are well on track. We will have some legal battles, but I have to say also that it has not been a very easy way. There is considerable pressure also, of course, from those who don’t want to lose their monopoly. But my take would be that in coming years, through developing also necessary infrastructure, this energy issue will disappear.

Having said that, I would also urge the United States to include energy chapter in Trans-Atlantic Trade and Investment Partnership. I think that it would be also very important that we have this agreement. I haven’t mentioned here—I haven’t heard any question conclude it, because that would also provide, I think, very good basis for deepened and expanded transatlantic bond between Europe and United States. Would help also us not only in purely militarily, our security terms, but in economic and energy terms.

Thank you.

SESTANOVICH: Thank you very much.

I want to make a little plug for a new program that the Council has introduced called Model Diplomacy, which is a teaching tool for simulations of international crises of various kinds and decision-making in response to those crises. Charlie Landow, who’s here at the table with us, has been one of the people involved in developing this Model Diplomacy teaching tool. And one of the scenarios that it includes is a scenario of confrontation between Latvia and Russia. So you may find that students in Latvia are clamoring to play this game. If you start hearing about it, remember it’s a Council on Foreign Relations product. We might even discover that members want to play the game, Charlie. It shouldn’t be just the RAND Corporation that can do wargaming.

Mr. Minister, thank you very much for joining us. We’ve had a wide-ranging discussion, from energy to ethnic politics to Brexit to credible deterrence, and we’re much the wiser for having heard from you. Thank you very much.

RINKĒVIČS: Thank you for having me. (Applause.)

(END)