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Two cash-strapped Latvian municipalities received contrasting verdicts on their financial stabilization efforts on June 4th.

The Municipal Financial Stabilization Commission reviewed the application of the Rēzekne City Municipality requesting the termination of the financial stabilization process.

>"The Commission recognizes that the municipality has done significant work in organizing financial management during the stabilization process. The accounting function has been centralized, budget planning, financial management and control processes have been improved, and timely settlements with creditors have been ensured.

"These measures have significantly improved the financial management of the municipality and demonstrate targeted work on stabilizing the financial situation. However, in the Commission's assessment, there is currently no sufficient basis for terminating the financial stabilization process," said an account released by the Ministry of Finance.

Although the financial situation of the municipality has improved, its financial indicators do not yet demonstrate sufficient stability in the medium and long term. The municipality also retains one of the highest levels of liabilities among Latvian municipalities, the Ministry noted.

Meanwhile the Valka municipality submitted information to the Ministry of Finance regarding the implementation of the tasks set at the Cabinet of Ministers meeting on May 19th.

>"After analyzing and evaluating the submitted documents, the Ministry of Finance concludes that the Valka municipality has not fulfilled the tasks given by the Cabinet and the submitted information does not provide confidence in the municipality's ability to stabilize its financial situation," said the Ministry.

"It is particularly worrying that the amount of the municipality's arrears continues to grow. As of May 1 this year, it has already reached almost 700 thousand euros. This means that the municipality has been unable to pay its obligations in full and within the established deadlines for a long time. In addition, the information submitted does not provide a clear and financially justified action plan on how these debts will be covered and how the formation of new debts will be prevented," warned the Ministry.

"If the Valka municipality management is unable to ensure the fulfillment of its obligations, the Ministry of Finance will initiate a decision to initiate a financial stabilization process for the municipality," it added.

Latvia's State Treasury (Valsts Kase, VK) said on Thursday that it has raised a billion euros on the international financial markets with a bond issue.

"On Wednesday, June 3, 2026, the State Treasury issued government sustainable bonds on behalf of the Republic of Latvia with a maturity of seven years, raising funding in the amount of EUR 1 billion with a yield of 3.525% and fixing the coupon rate at 3.500%," said the treasury on its website.

>"Bonds to support Latvia's sustainable development have been issued for the second time, based on the Sustainable Bond Framework, which demonstrates the country's strong commitment to continue moving towards achieving climate neutrality by 2050 and the transition to a sustainable and socially inclusive economy," it said.

The first sustainable bond issuance in Latvia’s history took place in December, 2024, when six-year bonds worth EUR 600 million were issued. The framework was renewed in May 2026 and provides for the allocation of funding received from the second sustainable bond issuance to state budget expenditures for ensuring environmentally friendly transport, preserving Latvia’s biodiversity, reducing environmental pollution, social inclusion and reducing inequality, as well as other measures aimed at achieving the Sustainable Development Goals.

The new bonds were purchased by more than 70 investors (mainly asset managers from European countries), with total investor demand exceeding 2.4 billion euros, the treasury noted.

The lead banks for the sustainable bond issuance were France's BNP Paribas and Credit Agricole CIB.

In the latest poll of political parties by the research center SKDS, the biggest changes this time around have not occurred at the top of the ranking, but in the positions behind the leader and around the five percent threshold that is required to win seats in Latvia's parliament, the Saeima. Moreover, the data continues to show very tight competition between several parties.

It should be noted that the survey was conducted from April 24 to May 6 – before the events that led to the fall of the coalition led by Prime Minister Evika Siliņa (New Unity). The SKDS poll surveyed 1,823 Latvian citizens aged 18 to 75 in all regions of Latvia.

Respondents were asked - if the Saeima elections were held tomorrow, which political party or association they would vote for. Voters also had the chance to say they were undecided or would not vote at all, options which many people always choose.

Indeed, the most popular answer was "I don't know" (27.7% of respondents) followed by "I won't vote at all" (13.2%). So around 40% of the electorate is accounted for before we even get to party preferences, which look rather tiny in comparison. Indeed, no party manages to hit double figures.

Nevertheless, leading the way is the quasi-Trumpist Latvia First (literally 'Latvia in First Place'/LPV) party with 9.3% support. In second place are the social democrat Progressives (P) on 7.8% and in third place (6.8%) is the United List (AS).

In fourth place is a party not currently in parliament, Sovereign Power (SV) with 6.2% support and in fifth is New Unity (JV) on 5.9%, followed by the Greens and Farmers Union (ZZS) on 5.6% and the National Alliance which has surprisingly fallen from 6.4% in the last poll to 4.4% this time around. No other party manages more than 4% support.

However, SKDS head Arnis Kaktiņš cautioned that the political upheavals since the poll data was collected will likelyu result in some big changes when the next monthly poll is published, though precisely what they will be is hard to predict.

"But who can be the winner here, who can be the loser here? I, at least, can't say. The winner can be anyone and the loser can be anyone. Because in reality, how it will play out and with what eyes we will look at it, and how it will all look in a month, two and three, is impossible to say at the moment."

The next parliamentary elections take place in Latvia on October 3rd and with at least 40% of the electorate still up for grabs, there is plenty to play for.

A drone is reported to have crashed into Lake Drīdzis in Krāslava region in eastern Latvia on Saturday morning at around 08:00. It detonated upon contact with the water. There were no injuries, the State Police reported.

Police received information about this from residents and went to investigate the scene. Wreckage of a suspected drone has been found there.

The area to be surveyed is extensive, so additional forces have been deployed to inspect the scene, including an additional State Police unit with a drone, State Fire and Rescue Service personnel with a boat, and the National Armed Forces (NBS). Work is continuing at the scene.

The National Armed Forces (NBS) said that their sensors did not detect a drone entering Latvian territory. Therefore, no mobile broadcast notification was sent out to the public at all.

#Nothing detected

"The sensor information was not sufficient to activate the cellular broadcast," Māris Tūtins, Head of the Information Analysis and Management Department of the NAF Joint Staff, told LSM.

"I am in contact with the responsible services working in the Krāslava region in the vicinity of Lake Drīdzis after the crash and explosion of an unmanned aerial vehicle in the lake. I expect the services to provide as much detailed information as possible about the circumstances of the incident and further action," said Prime Minister Evika Siliņa.

Lake Drīdzis is located around 20 kilometres from the border with Belarus and around 100 kilometres from the border with Russia.

#Eyewitness

Latvian Radio spoke with eyewitness Vadims Stepanovs, who saw the drone crash.

"At that moment I was at Lake Drīdzis, fishing. Then I saw it flying. At first I thought it was a "Kukuruzņiks" [vintage An-2 aeroplane]. Then I looked and saw that something smaller was flying. It sounded like a moped. Then I realized that something was wrong.

>It flew over the lake, turned back, flew over the island and then its engine shut down and it dived into the lake and exploded.

I was about 1 to 1.5 kilometers away. There was no cell broadcast announcement today," Stepanovs said.

Residents are urged to stay away from the scene, follow official information and immediately report any possible drone debris to the police.

Response services continued to work at the scene on Saturday evening, and, taking into account the vast territory to be surveyed, did not predict the duration of their work. Criminal proceedings have been initiated into the incident in accordance with Chapter 10 of the Criminal Law - crimes against the state, the State Police said. This is standard procedure and does imply any suspects responsible for the drone flight have been identified.