• Putin lashes out at Latvia amid border treaty dispute
• Russia withdraws nuclear fuel from Latvia research reactor
• Latvian lawmaker ousted from leading government party
• Latvia ratifies Council of Europe minorities' convention
• Russia blasts Latvia for ratifying minorities pact
• Swarming flies in Latvia kill more than 300 cows, horses, sheep and pigs
• U.S. says Latvia is a major money-laundering centre
• Miss Universe pageant narrowed to just 10 contestants
• Latvia accused in European Court of Human Rights
• Online extortion victim speaks out
• Belarus Best, Latvia Worst for Russian Diplomacy
• Russia Assails Latvia's Ratification of Minorities Convention
• Latvia urges EU to open markets

Putin lashes out at Latvia amid border treaty dispute AP WorldStream Monday, May 23, 2005 12:07:00 PM
Copyright 2005 The Associated Press
By STEVE GUTTERMAN
Associated Pres Writer

MOSCOW (AP) — Russian President Vladimir Putin lashed out at Latvia amid a persistent dispute over a border treaty, repeating that Moscow will not consider ceding any territory to the small Baltic country.

Reaching into Soviet-era satire for a colorful jibe — his latest in a war of words with the neighboring state — Putin warned that if Latvia presses any territorial demands it will get not land but "a dead donkey's ears."

"We will never conduct negotiations based on even a discussion of any territorial claims," Putin said in televised comments during a visit to the offices of a Russian newspaper, Komsomolskaya Pravda.

Tension between Russia and Latvia escalated during this month's celebrations in Moscow marking the 60th anniversary of the Allied victory over Nazi Germany, with world politicians weighing in with starkly differing views of the war and the decades-long Soviet occupation of the Baltics.

The two countries had been expected to sign a border treaty the day after the celebrations, but Moscow balked after the Latvian government issued a declaration that Russian authorities fear is designed to leave Russia open to territorial and other claims.

Latvia has said it won't make any territorial claims, but the tension persists.

Putin said Monday that, when the Soviet Union collapsed in 1991, Russia "made a sacrifices unprecedented in the history of humanity in order to avoid a Yugoslav-style scenario in the former Soviet space, giving away tens of thousands of square kilometers of its territory."

He said claims today that "somebody owes somebody else five kilometers" were "absolutely unacceptable" and were aimed to spoil relations, not actually regain lost territory.

Naming a piece of land he suggested Latvia wants, around the Russian town of Pytalovo, Putin said that if its government makes territorial demands, they will receive "not the Pytalovo district but a dead donkey's ears."

That's an expression used by the main character in "The 12 Chairs," a 1920s satirical novel by the authors Ilf and Petrov that has become part of the Russian cultural vernacular.

Latvia's foreign minister said last week that Latvia would not seek restitution for the land around Pytalovo, which belonged to Latvia until the Soviet government redistributed it to Russia in 1944.

Putin took aim at Latvia during a news conference in Moscow following a Russia-European Union summit on May 10 — the day the two nations had been expected to sign the border treaty.

He accused its government of "political demagoguery," and said making territorial claims while simultaneously seeking a border treaty was "complete nonsense and rubbish," using an expression that literally means "soft-boiled boots."

Russia withdraws nuclear fuel from Latvia research reactor May 26 2005 3:56PM
Copyright 2005 Interfax

MOSCOW, May 26 (Interfax) — Russia withdrew about 2.5 kilograms of fresh nuclear fuel from the Salaspils research nuclear reactor in Latvia on Wednesday under a Russian-U.S. intergovernmental agreement.

"The nuclear fuel will soon be delivered to the Luch Institute, processed into a low-enriched nuclear material, and used in the production of fuel assemblies for nuclear power plants," says a Thursday press release by the Russian Atomic Energy Agency.

The Russian-U.S. intergovernmental agreement, which was signed on May 27, 2004, provides for bilateral cooperation in Russia's withdrawal of Russian-made nuclear fuel from foreign reactors in cooperation with the IAEA.

Latvian lawmaker ousted from leading government party AP WorldStream Friday, May 27, 2005 9:12:00 AM
Copyright 2005 The Associated Press

RIGA, Latvia (AP) — A Latvian lawmaker was expelled by his party and faces dismissal from the parliamentary foreign affairs committee after making statements deemed to be anti-Semitic, officials said Friday.

Aleksandrs Kirsteins, who chairs the committee, was expelled from the main government People's Party for failing to heed repeated warnings to tone down his nationalist rhetoric.

Kirsteins angered local Jewish groups by suggesting the Jewish community in Latvia had former Soviet KGB members among its leaders and that Jewish government officials were working to undermine the state.

The party's leadership, including Prime Minister Aigars Kalvitis, voted unanimously to oust Kirsteins and proposed to remove him from the foreign affairs committee, party chairman Janis Lagzdins said. He will retain his seat in the 100-member Parliament, but lawmakers were expected vote him off the committee next week.

Lagzdins said the party ousted Kirsteins because it considered his recent statements as "provocative and extreme."

"He is a scandalous individual who gets involved in rhetoric harmful to the state and should not be in this post. We do not need Zhirinovskys in our foreign policy," Lagzdins said, in reference to the leader of Russia's ultranationalist Liberal Democratic Party, Vladimir Zhirinovsky, known for extremist statements.

Latvia ratifies Council of Europe minorities' convention May 27 2005 11:34AM
Copyright 2005 Interfax

RIGA, May 27 (Interfax — BNS) — The Latvian parliament after a 13-hour debate ratified the Council of Europe Convention for the Protection of National Minorities making two reservations.

One reservation does not permit the use of another language than the official in street names, the other prohibits the use of minority languages in the work of government and self-government bodies.

Together with the convention the parliament passed a declaration saying that the convention applies only to Latvian citizens living in Latvia.

Russia blasts Latvia for ratifying minorities pact AP WorldStream Friday, May 27, 2005 11:17:00 AM
Copyright 2005 The Associated Press
By MIKE ECKEL
Associated Press Writer

MOSCOW (AP) — Russia's foreign minister on Friday blasted Latvia's parliament for requiring all street signs and local governments to use the Latvian language, even as the legislature ratified a European convention on minorities.

Speaking during visit to the Russian Baltic Sea exclave of Kaliningrad, Sergey Lavrov said Latvian lawmakers' decision to keep the language restrictions as they passed the Council of Europe pact was a "profanation of all obligations that Latvia has allegedly taken upon itself."

He also said a declaration passed by lawmakers saying the convention only applies to Latvian citizens living in the Baltic country effectively made non-citizens out of thousands of ethnic Russians.

"There is no need to prove that all this goes against European norms and standards," Lavrov said in televised comments.

Native Russian-speakers make up around one-third of the population in Latvia, which is a member of the European Union. Moscow routinely accuses Latvia and another Baltic state, Estonia, of discriminating against Russian-speakers.

Meanwhile, the Council of Europe's human rights commissioner, meeting with President Vladimir Putin at the Kremlin on Friday, gave measured support to Moscow's concerns. The council is Europe's top human rights body.

"I don't believe in and cannot agree with the principle of the existence of such a category as non-citizens, not in any country," Alvaro Gil-Robles said in televised remarks. "We are all human beings and we have right to be treated as such."

Many native Russian speakers in the Baltics have permanent residency, but have chosen not to apply for citizenship due to state language requirements.

Also Friday, Russia's lower house of parliament unanimously passed legislation setting up a commission to protect the rights of Russian-speaking minorities in foreign countries.

The State Duma as well overwhelmingly passed a resolution condemning the three Baltic states, along with Poland, for what it called "attempts at gross distortions of history and 'insertion' of amended versions of the reasons and results of the Second World War into the present political context."

In the run-up to this month's celebrations marking the 60th anniversary of the Allied victory over Nazi Germany, several former Soviet bloc countries called on Russia to formally acknowledge the nearly 50 years of Soviet occupation and apologize. Moscow's view is that the Baltics had invited the Soviet troops and that the Soviet Army liberated the Baltics from the Nazis.

"This is a political project that is being developed ... within the framework of the general tendency to isolate Russia and oust it from Europe's backyard," said Konstantin Kosachyov, chairman of Duma's international affairs committee.

Swarming flies in Latvia kill more than 300 cows, horses, sheep and pigs AP WorldStream Sunday, May 29, 2005 3:06:00 PM
Copyright 2005 The Associated Press
By TIMOTHY JACOBS
Associated Press Writer

RIGA, Latvia (AP) — More than 300 cows, horses, sheep and pigs were bitten to death over the weekend by swarming flies in eastern Latvia, the Agriculture Ministry said Sunday.

Warm temperatures after an unusually cold, damp spring created ideal conditions for the massive swarms of flies to attack grazing animals in Latgale, one of the European Union's poorest regions, said Viktors Grapmanis, the head of the ministry's food and veterinary department.

Over the weekend, the flies killed at least 324 farm animals, mostly cows grazing in fields, but also horses, sheep and pigs, Grapmanis said.

"The number of dead is likely to rise. The flies are biting livestock in great numbers, causing fever, swelling and eventual suffocation," he said.

Agriculture Minister Martins Roze canceled a trip to Brussels on Monday to deal with the problem. Latvia has contacted officials in neighboring Lithuania and Belarus, but has not yet heard if they experienced similar problems.

Damages could amount to tens of thousands of euros (dollars), Silvija Dreijere, a Farmers' Association official in the Praeli district — one of the worst-hit areas — told the state news agency, LETA.

About 15 percent of Latvia's 2.3 million residents are farmers. An animal's premature death can mean significant loss to small farmers in Latvia, one of the EU's poorest countries.

U.S. says Latvia is a major money-laundering centre Reuters World Report Monday, May 30, 2005 5:26:00 PM
Copyright 2005 Reuters Ltd.
By Patrick McLoughlin

RIGA, May 30 (Reuters) — The United States stepped up pressure on Latvia on Monday to tackle money-laundering, praising the Baltic state for taking legal action but criticising the level of co-operation by some banks.

U.S. Treasury Undersecretary Stuart Levey, in Latvia to meet government and banking officials, said progress had been made in fighting money-laundering but much more was needed.

"The problem in Latvia is a significant one and it's one where we are taking action not only by identifying banks but my visit here shows we are taking things seriously," he said.

Latvia, since winning independence from Moscow over a decade ago, has embraced free market economics. Last year it joined NATO and the EU and is one of its fastest-growing member states.

The country's financial watchdog estimates that half of all deposits in its banks, totalling 2.7 billion Latvian lats ($4.86 billion), are sourced mainly from Russia and ex-Soviet states where there are far higher risks of financial crimes.

Last week Latvia's parliament passed new tougher money-laundering laws, including penalties ranging from higher fines for non-cooperative banks to revoking their licences.

But the United States said laws and good intentions were not enough. Levey said Washington had identified two Latvian banks as "primary money-laundering concerns" against which he said sanctions were being considered.

If implemented these could see the banks denied access to the U.S. financial system. Levey would not say if the United States was considering measures against other banks but said there were "concerns about the Latvian financial sector in general."

Latvia's financial watchdog said in recent years controls to improve monitoring of banks had improved.

"It is not a global black spot," Financial and Capital Market Commission chief Uldis Cerps told Reuters.

"But there's ongoing dialogue between Latvia and the U.S. because transactions are going through its financial system."

Miss Universe pageant narrowed to just 10 contestants AP WorldStream Monday, May 30, 2005 10:56:00 PM
Copyright 2005 The Associated Press

BANGKOK, Thailand (AP) — Judges narrowed the field of 81 contestants in the Miss Universe contest to just 10 during the final competition on Tuesday, as the beauties modeled evening gowns and swimsuits in the Thai capital of Bangkok.

Miss Universe hopefuls from Puerto Rico, Canada, Peru, Switzerland, Latvia, the Dominican Republic, the United States, Mexico, Venezuela and Israel were chosen by a panel of 12 judges for the final round of the 54th competition televised live.

Earlier, last year's title winner, Jennifer Hawkins of Australia, described her achievement as a fairy tale-like experience. But she said her later work publicizing humanitarian projects underscored the real-world responsibilities that come with the crown.

Thailand hopes that hosting the pageant will boost the country's tourism sector, which was badly hurt by last December's tsunami. It estimates that the event and related activities will generate more than 2.1 billion baht (US$54.6 million; Ç41.6 million) of revenue.

"I hope that the Miss Universe contest will help encourage tourists back to the tsunami-hit areas because arrivals are very low and hotel room occupancy (rates) are less than 15 percent," said Vijit Naranong, president of the Thai Tourist Association's southern chapter.

Contestants in the Miss Universe pageant arrived in Thailand about three weeks ago and have since visited tsunami-struck areas along the southern coast and historic Buddhist temples around Bangkok.

Photos of bikini-clad contestants posing near a revered temple stirred up a controversy in the predominantly Buddhist country. The images showed the contestants aboard a boat on Bangkok's Chao Phraya river with Wat Arun, the famous Temple of the Dawn, in the background.

After the Thai government complained about the images two weeks ago, organizers promised to remove them from the pageant's Web site and pull them from video footage to be broadcast during Tuesday's competition.

The contestants also have driven the country's famous three-wheeled motorcycle taxis, called tuk-tuks, and ridden atop elephants — Thailand's national symbols.

Latvia accused in European Court of Human Rights Written by David Ferguson in Brussels
Tuesday, 31 May 2005
Copyright 2005 Euro-reporters.com

The European Court of Human Rights in Strasbourg will hear, on Wednesday, a case brought by MEP Tatjana Ždanoka. The Russian-speaking Latvian claims she was unfairly disqualified from standing for election to parliament as well as at national and local level. Some 450,000 Russian speakers living in Latvia have not yet been given Latvian citizenship and are currently classed as 'aliens'. "We are talking about people who have worked hard, raised families, paid taxes and made their homes in Latvia, yet they are denied equal citizenship rights for no other reasons than their origins and political convictions," said MEP Tatjana Ždanoka.

In 1998, Latvia's Central Electoral Commission ruled that Ždanoka was disqualified from standing because she had 'actively participated' in the Communist Party of Latvia. The political group was accused of twice participating in a coup d'état and declared 'unconstitutional' in September 1991. In a Chamber judgment of June 2004, the European Court of Human Rights in Strasbourg held that there had been a violation of political rights. The case was then referred to the Grand Chamber at Latvia's request.

Last month, the European Parliament's Petitions' Committee heard petitions highlighting the discrimination faced by the Russian minority in Latvia. A Member of the European Parliament in Brussels since 2004, Ždanoka has been pushing for recognition of the plight of Latvia's ethnic Russian minority. According to her, it represents the largest community of stateless persons in Europe.

In Latvia, 'aliens' or 'non-citizens' form up to 20% of the total population and are denied the right to vote and participate in local elections. They were not granted Latvian citizenship after independence from the Soviet Union in 1991 on the grounds that they or their families had settled in the country after 1945.

Latvia is mixed and only around 60% of the population is ethnically Latvian. With 29%, Russian speakers form the largest national minority in Latvia. In some cities (Daugavpils and Rezekne) Latvians are even outnumbered by Russian speakers. Minorities from other countries such as Belarus, Ukraine, Poland, Lithuania etc. also live in Latvia. The ethnic mix of the population of Latvia is largely the result of massive immigration during the years of Soviet occupation, which resulted in a decline of the share of ethnic Latvians from around 80% in 1935 to 52% in 1989.

Online extortion victim speaks out Will Sturgeon
silicon.com
May 31, 2005, 12:40 BST

The founder of NoChex has spoken about how his business survived its Web site being targeted by mobsters

The founder of an online payment system has spoken out about his experience of being targeted by Russian gangsters who threatened to destroy his Web site and his business if he didn't pay them $10,000.

To this day his Web site is under continual attack.

Asif Malik, founder of NoChex, said his first contact with these blackmailers was in August 2004 when he received an email saying his Web site would be taken down by a DoS attack if the money wasn't paid into an account in Latvia.

"We'd received loads of emails like this before and my initial reaction was just ignore it," Malik told ZDNet UK sister site silicon.com. "But an hour later the site went down. They'd attacked us with 155Mb of data."

Malik was in no doubt what this would mean for his business.

"If they did what they said they'd do, which was attack the site for 30 days continuously, then we would have been unable to process transactions and we would have lost all our merchants.

"We'd not be in business today," he added.

Such an attack, often generated by a network of compromised machines all directing traffic at a particular server or Web site, can overload and bring down a Web site.

Malik then contacted the Russian gangsters behind the extortion scam and asked for one day to get the money together. They agreed to the delay and stopped the attack.

However, during that time Malik contacted his ISP Pipex who were already threatening to "black hole" his Web site as the attack was impacting the whole Pipex network and asked them to implement a Cisco Guard solution which effectively rerouted all traffic and cleaned it of the malicious traffic being generated by the crippling attack.

"The next morning they were emailing asking 'where is our money?'. When they realised we weren't going to pay-up they launched another attack but this time it had no effect."

Predictably this did not go down well. Malik received a string of abusive and threatening emails.

And to this day the attacks continue — though they have little impact on the NoChex Web site.

"I think they are still looking for a new way in," said Malik. Though he now employs several penetration testing companies to continually check he's leaving no door open for the Russian extortionists to return.

Malik reported the attack to Scotland Yard but as yet has heard nothing of the ongoing investigation.

Many other victims of such attacks, most commonly targeted at businesses such as online casinos, bookmakers and payment services, whose businesses are very time sensitive, have also spoken out about their problems.

Speaking of his own experiences of the problem David Yu, COO of Betfair, last year told ZDNet UK sister site silicon.com such a discourse is important as openness and shared understanding will eventually defeat the problem.

Paul King, chief security architect at Cisco, told ZDNet UK sister site silicon.com: "Criminals aren't looking for a sophisticated challenge. They just want to make money. If somebody thinks they can bring your site down and can ask for money then you need protection."

According to John Whitty, CTO of Pipex, those committing DoS attacks can now launch around 500Mb of data at a Web site at any one time. There are very few companies, if any, in the world whose Web site would withstand such a barrage undefended.

Belarus Best, Latvia Worst for Russian Diplomacy June 5, 2005
Copyright 2005 Angus Reid Global Scan

(Angus Reid Global Scan) – Many adults in Russia hold a former Soviet Republic in high esteem, according to a poll by the Yury Levada Analytical Center. 45 per cent of respondents consider Belarus as a friend and ally of Russia.

Germany was second on the list with 23 per cent, followed by Kazakhstan with 20 per cent, Ukraine with 17 per cent and India with 16 per cent. Aleksandr Lukashenko has headed the government in Belarus since 1994, extending his tenure through constitutional referendums. His administration’s human rights record has been severely criticized internationally. Lukashenko and Russian president Vladimir Putin signed a bilateral treaty in late 1999, where the two nations agreed to eventually merge their tax systems and currencies.

On May 4, United States president George W. Bush referred to Belarus as "the last remaining dictatorship in Europe," adding, "When the elections come, make sure the elections are free, and have monitors and international observers. As you know, that made a big difference in the Ukraine."

Latvia tops the list of perceived "enemies" of Russia with 49 per cent, followed by Lithuania with 42 per cent, Estonia with 32 per cent, Georgia with 28 per cent and the U.S. with 23 per cent.

On May 5, Putin denied any further clarification on a long-standing dispute with Latvia, saying, "Speculations on this score should be stopped." The Latvian government has repeatedly insisted on the restoration of a 1920 peace treaty, and the condemnation of the 1939 Molotov-Ribbentrop pact, which led to the 1940 annexation of Latvia to the Soviet Union.

Polling Data

Which countries do you consider friends and allies of Russia? (All mentions)

Belarus 45%

Germany 23%

Kazakhstan 20%

Ukraine 17%

India 16%

France 13%

China 12%

United States 11%

Bulgaria 11%

Armenia 9%

Finland 6%

Italy 6%

Kyrgyzstan 5%

Poland 5%

Azerbaijan 5%

Britain 5%

Israel 5%

Uzbekistan 4%

Moldavia 4%

Japan 4%

Which countries do you consider are unfriendly to Russia? (All mentions)

Latvia 49%

Lithuania 42%

Estonia 32%

Georgia 28%

United States 23%

Ukraine 13%

Afghanistan 12%

Iraq 10%

Japan 6%

Iran 6%

Azerbaijan 5%

Moldova 4%

Poland 4%

Armenia 4%

China 4%

Britain 3%

Israel 3%

Germany 3%

Belarus 2%

Source: Yury Levada Analytical Center

Methodology: Interviews to 1,600 Russian adults, conducted from May 13 to May 17, 2005. No margin of error was provided.

Russia Assails Latvia's Ratification of Minorities Convention Copyright 2005 BNS, Interfax
By Vladimir Socor
Monday, June 6, 2005

On May 26, the Latvian parliament ratified the Council of Europe's Framework Convention for the Protection of National Minorities. The Russian government is denouncing Latvia's move vociferously in the mass media and international organizations, on the grounds that the Latvian parliament has attached two reservations and added a definition of the concept of "national minority." In so doing, however, Latvia followed the procedure used by many other European countries when ratifying the Convention. That document does not define the concept of national minority, and allows wide leeway for individual countries to take account of their specific circumstances by introducing reservations and a definition of national minorities when ratifying the Convention.

The Latvian parliament's vote was 64 in favor and 9 opposed, with 19 deputies from leftist Russian parties not voting. The score reflected a broad consensus among Latvian parties as well as the split along "national" lines in the parliament.

The two reservations stipulate that only the Latvian language (i.e., not Russian) may be used for street signs and in the communications of local government authorities. This approach does not set any special arrangement for areas with a high proportion of non-Latvian residents.

The ratification law defines members of national minorities as "citizens of Latvia who differ from Latvians in terms of their culture, religion, or language, [whose families] have traditionally lived in Latvia for several generations, regard themselves as identifying with the state of Latvia and its society, and wish to maintain and develop their culture, religion or language." This definition means that in Latvia — as in many European countries — non-citizens are not recognized as constituting separate national minorities. In Latvia, an estimated 70% of Russian/"Russian-speaking" residents have thus far declined to apply for the easy-to-get citizenship, despite the authorities' active promotional campaigns encouraging non-citizens to apply for naturalization.

Among European Union and NATO member countries, France and Turkey never signed the Convention, as they do not recognize any national minorities; Belgium, Greece, Iceland, and the Netherlands signed but have not ratified it. Belgium signed with the reservation that the terms of the Convention shall not affect the existing legislation on use of languages; Latvia has handled this issue similarly in ratifying the Convention.

As a rule, ethnic and language communities that are historically settled in a country meet the criteria for recognition as national minorities. In most European countries, resident non-citizens and post-World War II immigrant groups are not recognized as national minorities. Latvia follows a similar approach. However, Latvia's citizenship law is among the more liberal ones in Europe, requiring only an elementary language and civics exam for naturalization. The rate of success at that exam was approximately 85% overall in the last 10 years.

Senior Russian officials have attacked Latvia's qualified ratification of the Convention as "sacrilegious" (Minister of Foreign Affairs Sergei Lavrov), "great stupidity (bolshaya glupost), anti-democratic, anti-European" (Ella Panfilova, head of Russia's Presidential Commission for Human Rights), "proof that Latvia is not a European country" and is "moving toward Nazism" (Federation Council International Affairs Commission chairman Mikhail Margelov), a reflection on "uncivilized Latvia" (Federation Council Constitutional Law Commission chairman Yuri Sharandin). These and other Russian officials are now urging the Council of Europe, the OSCE, the UN, and the European Union to censure Latvia.

At present, Latvia has nearly 450,000 resident non-citizens, mostly Russians; some 34,000 resident citizens of other countries, mostly of Russia; and slightly less than 100,000 naturalized citizens, also mostly Russians, out of an estimated population of 2.3 million. The number of citizenship applicants was low year after year, but this has changed since 2004, thanks to Latvia's accession to the European Union. That number almost doubled to 23,000 in 2004 over 2003, and the monthly rate in 2005 averages 2,000 thus far. At this rate, the Naturalization Board predicts, the number of non-citizens will drop to approximately 130,000, by 2012-2013. Moscow's inflammatory rhetoric appears designed to frustrate this natural evolution.

Latvia urges EU to open markets By Gabriel Rozenberg, Economics Reporter
copyright 2005 The Times
June 10, 2005

EUROPE needs to focus on liberalising its economy to boost competitiveness now that political integration has stalled, Latvia’s Economics Minister said yesterday.

In his first British newspaper interview since taking office six months ago, Krisjanis Karins called on European states to focus on opening their markets, telling The Times that liberal economic policies and low business taxes lay behind Latvia’s rapid growth rate.

He urged the European Union to take seriously the Lisbon agenda, its market reform plan to create the world’s most dynamic economy by 2010, and to adopt the services directive which would liberalise the provision of services across the Continent.

He said that the future of the European Constitution was an “open question” as it would not be adopted in the short term.

Mr Karins said: “Now is a time to rethink and often that’s a good time to go back to the basics, and the basics of Europe are about an open common market. Maybe it would be easiest to focus on the Lisbon agenda and to let the issue of the constitution settle.”

Latvia, where corporation tax is now just 15 per cent, is one of the strongest advocates of open markets in EU and is seen as a “new Europe” ally of the UK. Mr Karins, who is visiting Britain to promote Latvian business, said: “If Europe doesn’t enact the reforms that it needs, to open its markets more, there could come a time in the future when economic development for all of Europe could be hampered.”

The Baltic nation of 2.3 million people pegged its currency, the lat, to the euro at the start of this year and will join the single currency in 2008. But while Mr Karins welcomed the euro, he called for Europe to “take a step back” from the European Constitution after its rejection in referendums in France and the Netherlands.

“Whether this document or a similar document will be adopted is an open question,” he said. “It certainly seems that this document in its current form, in the short term at least, will not be adopted.”