Latvia demands €7 billion from EU budget to offset Russia confrontation costs

Latvia's prime minister has put a price tag on his country's willingness to confront Moscow: €7 billion from the European Union's next seven-year budget. Andris Kulbergs says the money should compensate Riga for the military spending and collapsed trade that have followed Russia's full-scale invasion of Ukraine, and he wants it on top of funds already earmarked for Latvia.

The demand, made in an interview at the government chancellery in Riga, amounts to almost half of the €15.1 billion Latvia expects to spend on defence across the 2028-2034 budget period. It is a striking figure for a country of 1.8 million people, and it reflects a calculation that frontline states are subsidising the security of wealthier nations further from the Russian border.

Borrowing to defend the rest of Europe

Kulbergs frames the request as a matter of basic fairness. Latvia is pushing its budget deficit towards the legal limit to finance arms purchases, he argues, and much of that spending flows straight back to the manufacturers of Germany, France, Spain, Sweden and the Netherlands. Riga borrows; Western European defence contractors profit. "We fuel their economies," the prime minister said.

The €7 billion would sit within a proposed Competitiveness Fund that the European Commission has suggested for the next multiannual financial framework. Brussels has outlined a €125.2 billion pot covering security, defence industry and space, but that money is structured to finance collaborative projects across the bloc, not to hand predetermined sums to individual member states. The entire budget remains subject to negotiations between EU governments and the European Parliament, and those talks have barely begun. The EU's budget framework has historically been a protracted negotiation in which net contributors push spending down and net recipients push it up, with the result that large pre-allocated claims tend to be resisted.

Latvia's argument is that the usual categories of solidarity funding do not capture what it is losing. The country once ran substantial trade with Russia; sanctions and the severing of bilateral economic links have removed that revenue stream entirely. Defence spending, meanwhile, has surged as a share of national output. Kulbergs insists that without dedicated compensation, smaller frontline states will be forced to choose between fiscal sustainability and collective security commitments.

An election reshapes the politics of sanctions

The demand lands at an awkward moment. Latvia votes on 3 October, and the campaign has begun to expose the political strain underneath Riga's hawkish consensus. Kulbergs's centre-right party leads the polls, but the coalition mathematics after the ballot could force uncomfortable compromises.

The far-right, pro-Russia Sovereign Power party sits in second place, though mainstream parties treat it as an untouchable coalition partner. More consequential is the position of Ainārs Šlesers, a veteran populist businessman whose party belongs to the Patriots for Europe group in Brussels and currently polls third. Šlesers condemns the invasion and says support for Ukraine should continue, but he argues that Latvia cannot keep absorbing the costs indefinitely.

His proposal is transactional. When EU sanctions on Russia come up for renewal, Latvia should receive something in return. "We are losing money," he told reporters at his campaign headquarters. "We are talking about how to support Ukraine, but we are a victim." Asked whether that could mean withholding Latvia's backing for sanctions, he did not rule it out, saying only that he expected a "peaceful solution" to be found.

Šlesers, who has acknowledged business ties with Russian oligarchs, goes further than Kulbergs in arguing that Latvia must eventually restore economic links with its eastern neighbour. He has pointed to the precedent of Latvia itself losing territory to Russia after earlier conflicts to reach peace agreements, and suggested that the question of territorial concessions in Ukraine is ultimately "a decision by Ukraine." The framing has drawn criticism from Riga's mainstream, but it resonates with voters who feel the economic squeeze.

Coalition risks after 3 October

Kulbergs has not closed the door on governing with Šlesers, a calculation that reflects the arithmetic of Latvian coalition politics as much as any ideological affinity. The Progressives, a centre-left party polling fourth and also hoping to enter government alongside Kulbergs, are sounding the alarm.

Andris Šuvajevs, the Progressives' candidate for prime minister, said outside parliament that he is "100 percent sure" Latvia's foreign policy towards Russia would soften over time if Šlesers entered the coalition. He pointed to likely sanctions exemptions for Russian business interests and ministers adopting a more conciliatory tone towards Moscow as probable consequences.

The visa dispute that refuses to close

Kulbergs is also pushing hard on an issue that has divided EU capitals for over a year: Russian access to European visas. He called for a total ban on visas for Russian citizens, pointing out that EU countries granted more than 630,000 visas to Russians in 2025. "Are we nuts?" he said. "We allow Russian military soldiers to be given visas, the ones killing Ukrainians on the field."

The last sanctions package illustrated how fraught the question remains. Northern and eastern member states pushed for a blanket prohibition on Russian combatants, but France and Italy resisted, arguing that the issue should be handled through general EU visa rules rather than sanctions legislation. The eventual compromise created a legal basis for barring Russian combatants and ex-combatants who had taken part in the war, but left it to individual member states to decide when the ban would take effect. The EU's sanctions regime against Russia has expanded steadily since 2022, but each round has required bargaining between capitals that see the threat differently.

Frozen assets and diplomatic channels

On confiscated Russian sovereign assets, Kulbergs is similarly blunt. He urged EU countries to send the roughly €210 billion in frozen Russian sovereign reserves held in Europe directly to Ukraine, dismissing concerns that Moscow could challenge the move after the war. The legal and financial debate over those assets has been running since shortly after the invasion began, with Belgium, France and others warning of risks to the euro's credibility as a reserve currency if the funds are seized outright.

Kulbergs also criticised European Council President António Costa for opening a communications channel with the Kremlin, insisting that any such contact should be a collective decision rather than an institutional initiative. He called outreach to Moscow a "useless exercise" that would only give President Vladimir Putin breathing room before his next move. The criticism points to a persistent fault line between frontline states that want no contact with Moscow and some western and southern capitals that see diplomatic channels as a necessary instrument.

What comes after a ceasefire

Kulbergs is not an absolutist about long-term isolation. He pointed to postwar Germany as a model: acceptance of guilt, punishment of war criminals, reparations, and then reintegration. "Do we isolate Germany because of that?" he asked. "No, it's acceptance of guilt, acceptance of wrongdoing, punishment, and retribution."

But he is pessimistic about the immediate aftermath of any ceasefire. The real threat, he argued, would not be military but demographic: hundreds of thousands of traumatised Russian soldiers returning from the front, and civilians fleeing a collapsing war economy. Latvia's border with Russia and Belarus would face acute pressure. "The insecurity of the border will only rise," he said.