Baltic Business Quarterly Summer 2025

By Geske Heesch

A long-term military presence strengthens regional security and opens doors for economic cooperation. 

The recent visit on 22 May of Chancellor Friedrich Merz and Defence Minister Boris Pistorius to Vilnius, alongside Lithuanian President Gitanas Nausėda, marked a significant moment in German-Lithuanian relations. With the formal deployment of Brigade Lithuania, Germany reaffirms its commitment to NATO’s eastern flank and to the security of the entire Baltic region. 

This military presence, however, carries more than strategic symbolism. The long-term stationing of German troops comes with extensive infrastructure projects in Lithuania. A new military base is being built in Rūdninkai, near Vilnius, to accommodate up to 5,000 soldiers. The base will include housing, schools, childcare facilities, and improvements to local transport infrastructure, offering benefits not only for the military, but also for the surrounding communities. 

Such deployments frequently bring broader economic effects. Sectors like construction, logistics, transport, and local services are expected to gain momentum. At the same time, the situation creates new opportunities for cooperation with German companies operating in the defence and support industries. In similar NATO deployments elsewhere, local economies have benefited from new jobs and increased demand for goods and services, a trend that is likely to repeat itself in Lithuania. 

Germany’s engagement in Lithuania is a powerful affirmation of solidarity. As Chancellor Friedrich Merz emphasized during his visit, the security of Vilnius and the security of Berlin are closely linked. In this spirit, the German commitment reflects not only military readiness, but also a deeper recognition that security and stability in Eastern Europe are inseparable from the future of Europe as a whole. 

In times of geopolitical tension, such partnerships do more than deter threats. They strengthen economic resilience, support long-term integration, and reinforce the foundations of European unity. 

Building bridges across the Baltic Sea: Mecklenburg-Vorpommern’s Prime Minister travelled to Latvia to promote economic cooperation and strive for closer relations. Soon she will receive a return visit from Latvia for a special event in Rostock.

By Alexander Welscher

Manuel Schwesig, the Prime Minister of the northeastern German state of Mecklenburg-Vorpommern, offered greater economic cooperation during a recent visit to Latvia. On her three-day trip from 14 to 16 May, the premier was striving for closer relations between companies from both countries. "We are here to strengthen and expand cooperation between Germany and Latvia," she said in her speech at the science-driven technology conference Deep Tech Atelier that she attended together with business delegation.

During her visit, the Prime Minister of Mecklenburg-Vorpommern held high-level political talks with President Edgars Rinkēvičs, Prime Minister Evika Siliņa and other Latvian top officials such as the Latvian economics and energy minister as well as representatives of the Latvian parliament. Schwesig was accompanied by a delegation that included business representatives from the digitalisation, energy, and innovation sector as well as representatives of the Rostock Chamber of Industry and Commerce, universities and academia, local authorities and the Bundeswehr.

In all her meetings, Schwesig called for greater cooperation between her federal state and Latvia. Despite the current stable economic development, it is very important for Mecklenburg-Vorpommern, according to her, to further expand economic contacts. "The potential in the Baltic Sea region is great," she said. "That's why our companies should focus on that, because it means stability, because the countries also want cooperation."

Parallel to the political talks, the business delegation had their own special program that had been prepared by the Latvian Economic Ministry in cooperation with LIAA and the German-Baltic Chamber of Commerce. The delegation included around 35 representatives from companies such as 50Hertz Transmisson GmbH, General Dynamic European Land Systems-FWW GmbH, Ferdinand Schultz Nachfolger, AIRSENSE Analytics GmbH and ThyssenKrupp Marine Systems GmbH.

German-Latvian business forum in Rostock

Following her welcome meeting with Siliņa, Schwesig announced that a German-Latvian economic conference would take place in Mecklenburg-Vorpommern in autumn. "We have agreed that Prime Minister Siliņa will come to Rostock with a business delegation on September 26th. We will then host a major German-

Latvian business day", she said. "I am very pleased that the Prime Minister has accepted our invitation and is coming in person. That is something special."

The main focus of the conference in Rostock is about to be on energy and digitalization. "Latvia is much more advanced in digitalization than Germany. We want to learn something from Latvia in this regard," Schwesig said after getting some first-hand insights about the digitization of the Latvian economy and public administration, adding that Mecklenburg-Vorpommern in turn is one of the pioneers in Germany when it comes to energy. She also referred to already existing long-standing cooperation in higher education and vocational training.

Calling Germany “Latvia's strategic partner in security, economy and future technologies”, Siliņa also highlighted the potential for more trade and economic activities between the two countries and with Mecklenburg-Vorpommern in particular. “We have common interest in the Baltic Sea and it is important to develop this cooperation“, the Latvian Prime Minister noted, adding that the investment flow between Latvia and Germany is already growing.

Aiming for more cooperation with democratic Baltic Sea countries

Strengthening cooperation with the countries in the Baltic Sea region is part of the Baltic Sea Strategy, which the government of the Northern German State adopted in 2024. "We deliberately speak of the democratic Baltic Sea countries because cooperation with Russia can no longer be part of it since Russia's war of aggression against Ukraine," said Schwesig. "We take the concerns in particular

of our Baltic friends very seriously. Germany stands firmly on their side."

Schwesig had previously been viewed with suspicion in the Baltic States due to her close cooperation with Russia and her commitment to the Nord Stream 2 gas pipeline from Russia to Germany. Shortly after the Russian invasion in 2022, she made a U-turn and described her actions at the time as a mistake. According to her, this was no issue during her talks in Latvia. Most her Latvian hosts had rather emphasized Germany’s importance in the area of economic and security policy.

During her political meetings, Schwesig said, she had experienced gratitude for the military support from Germany and the Bundeswehr, which is permanently deploying a brigade in neighbouring Lithuania. The amendments to the Basic Law on the debt brake were also "very well received" - as a "clear signal from Germany to invest more in its defence capabilities and also in its own infrastructure for economic strength", Schwesig explained to German press representatives that were accompanying her on the trip.

Joint project with Latvia in Ukraine

"My impression is that people here see what Germany is doing, and they are grateful for; it is also important. And the expectation is that it will continue like this," the Prime Minister of Mecklenburg-Vorpommern said at the press briefing, adding that it was "greatly appreciated“ that Germany stands by Ukraine and by

the side of Estonia, Latvia and Lithuania. "The Baltic States, of course, have a very high need for security, which has increased massively again with Russia's war of aggression against Ukraine."

Together with Siliņa she also agreed on a closer cooperation in helping Ukraine. "We have independently of each other a partnership with Chernihiv," Schwesig said. The aim now is to strengthen the joint commitment in the Ukrainian region north of Kiev with a project to support women and children.

FOTO/VIDEO: Valsts prezidenta Edgara Rinkēviča tikšanās ar Mēklenburgas-Priekšpomerānijas federālās zemes Ministru prezidenti Manuelu Švēzigu

Not only tourists are flocking to the Baltics in the summer. It is also high season for German politics to pay a visit – and to discuss the prospects for more cooperation.

By Alexander Welscher

Reaching out to the Baltics: The Prime Minister of the German state of Hesse, Boris Rhein, was visiting Lithuania and held political talks in Vilnius with Prime Minister Gintautas Paluckas and Economic Minister Lukas Savickas. The main points of his discussion on 21 May 2025 included security policy issues and opportunities for stronger economic cooperation between the central state of Hesse, which includes Germany's financial capital of Frankfurt, and both Lithuania and its Baltic neighbours.

"The Baltic states have developed into a dynamic and innovation-friendly economic area in recent years," Rhein after his meeting with Paluckas, who both on the next day also attended the roll call in Vilnius of the new German brigade in Lithuania. "Estonia, Latvia, and Lithuania are important trading partners for Hesse, especially in mechanical engineering, the automotive industry, and IT services. Economic exchange with the region offers great potential for Hessian companies."

“Every connection with Germany is very important to Lithuania“

Paluckas also highlighted similar prospects for more cooperation and exchange. “Every connection with Germany – whether at the national level or with federal states like Hesse – is very important to Lithuania. Close cooperation in the fields of defence and security, economic and business ties, cultural and scientific exchange means more opportunities for our people, and greater prosperity, security, and stability for our countries,” the Lithuanian Prime Minister said.

Rhein’s discussions with Lithuanian Economic Minister Savickas focused primarily on opportunities to deepen bilateral economic relations, the promotion of start-ups, and closer cooperation between the financial centers of Frankfurt and Vilnius in the European capital market. As the seat of the ECB, Bundesbank and the new EU anti-money laundering agency (AMLA), Frankfurt plays a key role in monetary policy and foreign exchange operations.

Another topic of discussion of Rhein was the field energy policy, where Hesse and the Baltic states have a lot in common, according to the Prime Minister. "Since the beginning of Russia's war of aggression in Ukraine, we have been faced with the challenge of diversifying our energy mix and becoming less dependent on Russian oil and gas," he said, emphasizing that: "We all benefit from a secure, sovereign, and energy-independent Europe. The less oil and gas that reaches the EU from Russia, the more difficult it will be for Putin to continue his war in Ukraine. Only by pursuing a policy of strength can we force the Russian president to the negotiating table."

“Energy independence is our strategic choice“

Energy was also one of the focuses of a delegation from the Christian Democratic Union (CDU) parliamentary group in the German state parliament of Bremen that toured the Baltics. During their meeting with Lithuanian Energy Minister Žygimantas Vaičiūnas, the bilateral relations between Lithuania and Germany in the field of energy were discussed, as well as more cooperation in developing renewable energy and the strengthening the security of critical infrastructure.

“Energy independence is our strategic choice, on which we base both national security and economic progress. Germany is an important partner on this path, and our joint projects, such as the Lithuania-Latvia-Germany offshore power connection, demonstrate strong cooperation and the desire to ensure a secure energy future,” said Vaičiūnas, who also expressed gratitude to Germany for its leadership in ensuring regional security and welcomed Germany’s growing investments.

Following their visit in Lithuania, the CDU delegation from Bremen moved on also to Latvia and Estonia. There the German politicians gained “important insights into the security situation and digital development of the region“, as they later wrote on their Facebook page, drawing a clear and unambiguous conclusion after their visit to Vilnius, Riga and Tallinn. “The Baltics are not only a key partner in security policy, but also a driving force for modern administration, technology, and reliable partnerships in Europe.“

Facebook-Post CDU Delegation

Energetikos ministras Žygimantas Vaičiūnas susitiko su Vokietijos delegacija

Vilnius, the capital of Lithuania, has officially become the largest city in the Baltics, overtaking Riga, the capital of Latvia. This fact has been confirmed by the statistical agencies of both countries.

By Līva Melbārzde

According to data published by the Latvian Central Statistical Bureau on 2 June, the population of Riga has fallen to 591,882. Meanwhile, the Lithuanian State Data Agency reports that 607,667 people now live in Vilnius, which is an increase of more than 5,000 residents in one year. For several years now, demographic trends have pointed to stable growth in Vilnius, making it the new metropolis of the region.

Over the last decade, Vilnius' population has grown by 13%, driven by the city's consolidation as an innovative international business centre and rising living standards. It is noteworthy that the city's growth has remained steady even amid the pandemic and geopolitical challenges. The average salary in Vilnius has tripled in ten years: from €797 in 2014 to €2,536 in 2024.

"Vilnius is developing and thriving like never before. Founded more than 700 years ago as a multicultural city, it remains dynamic and youthful. Thanks to our speed, adaptability and innovation, we are ensuring sustainable growth for our city. This is also confirmed by the fact that we have been named European Green Capital this year," says Valdas Benkunskas, Mayor of Vilnius. ‘Vilnius is a shining example of transformation: over the last three decades, it has gone from a stagnant city in Soviet times to a dynamic and inspiring centre of innovation.’

Vilnius' economic strength is also confirmed by the latest Eurostat data, which shows that Vilnius has become the richest city in the Baltic States. Its GDP per capita among the Baltic capitals exceeds the EU average for the first time. Luminor Bank Chief Economist Žygimantas Mauricas points out that, according to Eurostat data for 2024, Vilnius' GDP per capita is currently 9% higher than in Tallinn, 36% higher than in Riga and 5% higher than the EU average. Ten years ago, Tallinn was almost 25% wealthier than Vilnius, Riga was at a similar level, but the EU average was almost 50% higher than Vilnius. Current data shows a dramatic turnaround.

Lithuania's transformation into a dynamic EU and global market player has encouraged international investment and business growth in the capital, offering more jobs and higher wages. The main areas of development for Vilnius' technology ecosystem are financial technology, natural sciences, defence, artificial intelligence and technological innovation. The ecosystem comprises more than 1,100 companies employing over 40,000 people. The value of Vilnius' start-up ecosystem has increased 39-fold over the last ten years, making it one of the fastest growing in Central and Eastern Europe. Over the past five years, four Vilnius start-ups have achieved unicorn status (valued at over $1 billion), highlighting the city's growing importance in the technology sector. Global companies actively operating in Vilnius include Moody's, Nasdaq, Thermo Fisher, Vinted and Nord Security.Quality of life, availability of highly skilled professionals, a business-friendly environment and rapid innovation – this combination of factors makes Vilnius attractive not only to foreign investors but also to local companies such as the Vilnius-based unicorns Vinted and Nord Security, which were founded in Vilnius. With

the growing demand for talent in the technology sector, the city is actively investing in education and supporting the integration of foreign specialists through initiatives such as the Vilnius International House," says Dovile Aleksandravičiene, Director of Go Vilnius, Vilnius' official development agency.

Given the growing demand for skilled workers, especially in the technology sector, Vilnius is paying close attention to attracting and integrating the international community. The Vilnius International House, managed by Go Vilnius, offers comprehensive integration and education services to foreigners, helping them to settle into city life. It serves as a one-stop agency for everyone who has just arrived in Vilnius. Every year, the city hosts the ‘Vilnius is My City’ event, which brings together around 7,000 participants, both locals and foreigners. Foreigners currently make up more than 12% of Vilnius' population, reflecting the city's growing diversity.

Vilnius is not only expanding and enriching itself, but also becoming an increasingly desirable place to live. According to the 2023 European Quality of Life Survey, Vilnius ranks among the highest-rated cities in the EU, alongside Stockholm, Copenhagen, Oslo and Luxembourg. The city stands out for its excellent air quality, low noise and crime levels, well-maintained public spaces and active cultural life. Almost 61% of Vilnius' territory is covered by green areas, including parks, riverbanks and lakes. Vilnius is a compact and walkable city with accessible public transport. As European Green Capital, it offers smart mobility solutions, including more than 300 low-emission buses, a 140 km network of cycle paths and electric car charging stations integrated into street lighting. Vilnius has also recently become a new culinary destination in Europe – in 2024, four restaurants in the city were awarded Michelin stars for the first time, and all four retained this status in 2025. In addition, Vilnius has seven Bib Gourmand restaurants and a total of 29 establishments listed in the Michelin Guide. Lithuania ranks 16th in the World Happiness Index, and its younger generation has been recognised as the happiest in the world.

By Geske Heesch

The EMO Hannover will take place from 22 to 26 September 2025 under the theme “Innovate Manufacturing”. This year marks the 50th anniversary of the world’s leading trade fair for metalworking.

In 2023, the event brought together more than 1,800 exhibitors from 45 countries and approximately 92,000 professional visitors from nearly 140 nations, including more than 800 from Estonia, Latvia and Lithuania. A similar level of participation from the Baltic region is expected in 2025.

The focus of the upcoming EMO will be on key developments in production technology, including digitalisation, artificial intelligence, sustainability and applications in the medical and defence industries. The EMO is considered one of the most relevant international platforms for professional exchange on current challenges and future topics in the manufacturing sector.

Against the backdrop of current geopolitical developments, innovations in the defence industry are becoming increasingly important for the Baltic countries.

By Linas Jegelevičius

It all started with sticky fingers in a warehouse.

Back in the days, brothers Dovydas and Dominykas Juškys were just kids labelling boxes in their parents’ food distribution warehouse. What began as a childhood pastime quietly sparked a passion. Fast-forward to today, that passion has evolved into Candy POP — one of the fastest-growing specialty candy retailers in the Baltics.

Just face it: the Juškys brothers, now at the helm of an international retail force, have built something that equally combine nostalgia and innovation. And this August, they’re celebrating a major milestone: their 11th anniversary in the business.

“We started out just like our parents – with a focus on wholesale. Honestly, the first couple of years were challenging. That’s when the idea came up to open our own store – somewhere we could freely sell what genuinely interested us, rather than just what clients or retail chains were asking for. That shift made all the difference,” Dovydas Juškys, co-founder and group CEO, told the Baltic Business Quarterly.

Today, Candy POP is hard to miss. With 34 striking stores across Lithuania, Latvia, Estonia, and Poland, the brand has become a household name for sweets and snacks lovers. Their formula? A rainbow-bright selection of American, Japanese, South Korean, treats you won’t find in your average grocery aisle.

Their success story is backed by impressive numbers. As of 2024, Candy POP boasts a consolidated group turnover of €22 million, a team of more than 100 employees, and a wholesale network that reaches over 3,000 sales points across the Baltics. Last year, they’ve also just launched an international franchise model – signalling even bigger plans.

Breaking into top-tier shopping centres hasn’t been easy, admits Dovydas. “You need more than just great products. Retailers want brands with loyal followings and a proven track record. We’ve built that.” This credibility recently helped Candy POP land deals with major chains like Maxima, Rimi, Circle K, Selver and Coop – integrating their sweet lineup into everyday shopping.

But Candy POP is more than just a store. It’s a candy destination powered by pop culture and trendspotting. “Our job isn’t just to react to trends,” says Juškys. “We have to predict them.” Platforms like TikTok have redefined demand, creating overnight candy crazes – from Angel hair chocolate to peelable gummies. Staying ahead of the hype is now a full-time business.

And while the brand proudly sources treats from around the world, about 10–15% of their products are local – including their own-label items. Still, international variety is what fuels the Candy POP experience.

So, do Lithuanians love sweets? “Absolutely,” laughs Juškys. “Especially when they’re fun, Instagrammable, and a little bit extra.”

Health food, however, isn’t the focus. “We sell joy,” he adds. “Of course, we offer vegan and gluten-free options – but our bestsellers are the ones that bring smiles, not stats.”

by Linas JEGELEVIČIUS

In the quiet northern, Latvia-bordering Lithuanian town of Biržai, where stone castles meet green fields and brewing traditions run deep, an unexpected renaissance is taking place—one that starts with a cocoa bean.

What began as a humble dessert café in 2014 is now transforming the Lithuanian chocolate scene. Biržai Chocolate, the brainchild of a couple returning from emigration, was originally intended to be a cozy spot serving handmade sweets and artisanal bonbons. But dreams often meet reality with a thud, and the founders quickly realized that what delighted their hearts didn’t always pay the bills.

"We realized it was more profitable to make cepelinai than chocolate," they say, half-joking. By 2019, their chocolate efforts had dwindled to two quirky items: beer-infused truffles and hemp-seed bars made on special order,” Sigitas Jurčys, the director of UAB "Šokolado gama" that operates the brand, told The Baltic Business Quarterly.

Then came the storm. COVID-19 shuttered their café and threw them, like so many others, into survival mode. Faced with looming bankruptcy, they dusted off their old chocolate equipment, made a batch of bars, wrapped them in beautiful packaging, and hit the road. Quite literally. From the back of their van, they started selling across Lithuania—and slowly, a new chapter began to unfold.

The revival of Biržai Chocolate isn’t just a comeback story—it’s a blueprint for artisan resilience. From one small tempering machine to a full-fledged “bean to bar” production line, their journey has been marked by strategic risk and a fierce commitment to quality.

“We started with a daily output of 12 kilograms. Now we roast our own beans and process chocolate entirely in-house,” S. Jurčys said.

The latest acquisition in 2024, a full bean-to-bar line, has unlocked a new layer of creativity. Dominican and Venezuelan cocoa beans have already passed through their roasters; next year, they’ll explore even more exotic regions.

But the path is far from sweet. Cocoa prices have tripled globally over the past two years, pushing many chocolatiers to the brink. “We recently heard one of our competitors went bankrupt,” the director said, adding: “Another is just hoping to make it to Christmas.”

What sets Biržai Chocolate apart is not just their origin story or their artisanal ethos—it’s their fearlessness in challenging convention. While global giants standardize taste to fit mass-market profiles, Biržai dives deep into complexity and terroir, even leading the charge in sugar-free innovation.

“We're the first in Lithuania to produce chocolate sweetened only with date powder,” S. Jurčys said.

No sugar, no artificial sweeteners—just dates and cocoa, fused into a surprisingly smooth bar thanks to their specialized equipment.

Despite sharing shelf space with industrial titans like “Vilniaus Pergalė” and “Rūta,” Biržai Chocolate doesn’t aim to compete head-on. “They’re big, and with size comes inertia. We’re

small, we’re fast. We can pivot, customize, and respond to customers almost immediately,” S. Jurčys emphasised.

Their clients range from boutique gift shops to major supermarket chains like RIMI, thanks to a partnership with IVV Sourcing and the “VIKIS” brand. Export isn’t on the horizon just yet—they see more room to grow right at home.

In the end, chocolate is more than a product for Biržai Chocolate—it’s a form of connection. “It’s not just a business. It’s a community. From the growers who harvest the beans to the customers who explore new flavors, we’re all part of something bigger,” S. Jurčys is convinced.

As the colder months approach and chocolate sales traditionally spike, one thing is clear: Biržai Chocolate isn’t just surviving anymore. They’re thriving—boldly, deliciously, and on their own terms.

In an annual extravaganza, Lithuania's capital was swept up in a wave of pink as Vilnius once again celebrated one of the country’s most iconic dish: šaltibarščiai – the cold pink beet soup.  

By Alexander Welscher

Pink dive into the summer: The start of the warm season in Vilnius has become synonymous with the Vilnius Pink Soup Fest. The annual event is held in honor of Lithuania's beloved šaltibarščiai soup for the third time revolved around one the culinary icons of the country.  During the festival on 1 June, visitors had the chance to try the cold soup and its numerous renditions, slide down on a 50-meter slide into a giant artificial soup bowl, and partake in a variety of other pink-themed activities.

Dedicated to the popular summer dish, restaurants and cafés across the city offered traditional šaltibarščiai, special pink soup promotions with a culinary twist and food variations such as pink soup-themed ice cream, pizza, beet-based cocktails or coffee, while museums and shopkeepers had prepared pink-themed decorations, exhibitions and entertainment. Even some Vilnius landmarks joined the festival and were illuminated in glowing pink, and at the TV tower a giant pink soup flag flew above the city during the playful celebration.

Colourful culinary celebration

Down on the ground, many Vilnius residents were dressed in pink and some of had their time to shine during a costume contest, where pink soup fans dressed up in imaginative outfits had a chance to win quirky prizes. More than 10,000 people took later also part in a pink parade that filled the main central streets and was led through the city by dancers, stilt walkers, marching bands, and whimsical "soup characters" ranging from human-sized eggs to beetroots.

“Vilnius is the only city in the world with a celebration quite like this,” Dovilė Aleksandravičienė, head of the capital`s official tourism agency Go Vilnius, claimed full of pride. “Just as Spain has La Tomatina and Pamplona has its running of the bulls, Vilnius now has the Pink Soup Fest – full of colour, creativity, and even people sliding down a hill into a giant pink soup bowl.”

Lithuanians have been enjoying šaltibarščiai since the 18th century. Bright in colour and refreshing in taste, it is made by combining cold pickled beetroot, green onions, kefir and fresh cucumber. Add then some more handfuls of dill and a hard boiled sliced egg, and ready is one most popular summer staples in Lithuania that can serve as a light snack or a full meal. If you want to prepare some yourself, scroll down for the recipe and follow the instructions. And for more advice on how to prepare the pink soup properly see these insights and recommendations of a food science expert at the Kaunas Technology. (https://en.ktu.edu/news/tips-for-the-weekend-ktu-scientist-advises-how-to-prepare-lithuanian-pink-soup-properly/)

Šaltibarščiai vs. aukstā zupa

However, as with many historical and traditional dishes, the origins of the soup and its recipe are difficult to trace back to its source. And so it is no wonder that the one-of-a-kind Lithuanian cold beet soup has an analogue in neighbouring Latvia with similar cultural-culinary significance. Named aukstā zupa – literally: cold soup – the Latvian version of the pink soup is made basically out of the same ingredients. The only difference is the side dishes: While in Lithuania it is served with boiled potatoes, in Latvia the soup is often eaten with rye bread.

Following the establishment of the Vilnius Pink Soup Fest, both countries have entered into a friendly rivalry over the soup’s ownership that resembles the eternal Christmas tree dispute between Latvians and Estonians (https://eng.lsm.lv/article/culture/culture/o-christmas-trees-o-christmas-trees.a385353/). It prompted a not-so-serious rap song battle between Riga and Vilnius in 2024 that was dubbed “beef over beet“ by local media. (https://neighborhood.lv/en/beef-over-beet-lithuania-and-latvia-argue-over-cold-soup/)

This year a bright pink soup-inspired train has been operating on the route between the capitals of Latvia and Lithuania during the summer, in which passengers in a special-themed carriage could ponder over the origin of timeless summer dish. But as Lithuania´s national railway company LTG link operates the train on the line between the two capitals, Vilnius gets another walkover victory. Because on the board menu there is only šaltibarščiai, but no aukstā zupa.

Classic Lithuanian šaltibarščiai recipe

Ingredients:

4 medium cooked beets (grated or finely chopped)

4 cups kefir (buttermilk or yoghurt)

1 cup cold water (adjust for desired consistency)

1 cucumber (diced)

3 hard-boiled eggs (chopped)

3 tablespoons fresh dill (chopped)

2 spring onions (chopped)

Salt and black pepper to taste

Instructions:

In a large bowl, combine the grated beets, cucumber, eggs, dill, and spring onions. Pour in the kefir and mix well. Add cold water to adjust thickness. Season with salt and black pepper to taste. Refrigerate for at least 30 minutes to let the flavors blend. Serve chilled with a side of hot boiled potatoes.

Saksamaa and Saksimaa - both are really wunderbar: Germany and Estonia are connected by a long common history and close cooperation in the present. This became clear during a recent visit by the Estonian president to Saxony, in which economic cooperation, culture and art have been in focus.

By Alexander Welscher

Estonian President Alar Karis has been on a three-day visit in Germany from 6 to 8 May. Together with a large business and cultural delegation, the head of state went to the Southeastern state of Saxony which occupies a special position in Estonian. Not least because the Estonian name for Germany - Saksamaa - is derived from the land of the Saxons, who are themselves living in a federal German state with an almost identical name in Estonian: Saksimaa.

But Karis, of course, did not travel to Saxonia for linguistic reasons. “The purpose of this visit is to strengthen cooperation between Estonia and Germany and to further develop our economic relations", said the Estonian president, who visited Dresden, Mittweida, Chemnitz and Leipzig, and had an intensive program dedicated to business and culture. “We are interested in strengthening our economic ties further, also at regional level.”

The business delegation includes Estonian companies aiming to work with partners in Saxony, as well as representatives of the German-Baltic Chamber of Commerce and the Estonian Business and Innovation Agency, while the cultural delegation consisted of representatives of leading Estonian cultural and art institutions.

Talking business for establishing closer economic ties

During his visit, Karis attended two distinguished business events and met with Minister President of Saxony Michael Kretschmer and Minister of Economic Affairs Dirk Panter. In Dresden he opened the Estonia–Saxony Business Forum and in Mittweida spoke at Estonian-Saxon Economic Dialogue. In his speeches at both events he noted that Estonian companies are pursuing closer cooperation with German partners and stressed the need to strengthen Europe's competitiveness.  

"Our companies work side by side in the fields of engineering, mobility, digitalisation, defence, timber structures and energy ," the Estonian president said in Dresden, highlighting that Germany is one of Estonia's most important trade partners. "German businesses bring scale and expertise to those partnerships, while our own companies provide speed, innovation and digital flexibility. Working together, we make a formidable team.”

Both business forums brought together Estonian and German companies seeking new partnerships or already working with partners in fields such as digitalisation, electronics, industrial processes, and public service development. Karis spoke there about the journey of his country in developing a digital society, and encouraged the establishment of closer business ties between Estonia and Saxony, highlighting that Europe's competitiveness depends on linking innovation with practical industry solutions and strengthening the single market.

As a good example Karis cited an agreement between Estonian and German entrepreneurs under which the Estonian company Praktikal and Germany's Mastersolution AG have established the joint venture Koolest Solutions GmbH to collaborate with a public school in Oelsnitz. The aim is to test and implement new digital tools for teaching science and mathematics. "#Estonian edtech enters a #German school", Karis proudly wrote on X after he signed some starter kits for the school. "Honoured to witness this step in exporting our educational innovation."

Getting some practical insight on the ground, the president also toured the facilities of the semiconductor manufacturer X-Fab in the microelectronics cluster named Silicon Saxony, and visited Estonian companies operating in Saxony. Karis opened the new Dresden office of IT company Nortal, and visited the soon-to-be-completed top supercapacitor factory of Skeleton near Leipzig.

Culture in the capital and the capital of culture

In addition to all the business matters, the Estonian president and his wife also enjoyed a full load of culture in Saxonia. In its Dresden, Karis opened the largest ever Estonian art exhibition in Germany to date in the Kunsthalle im Lipsiusbau. Bringing centuries of artistic exchange into focus, the exhibition "Spiegel im Spiegel" presents 150 works – paintings, graphics, objects, video and sound installations. It is the first collaborative project between the Dresden State Art Collections (SKD) and the Estonian Art Museum Kumu in Tallinn.

The focus is on the historical and cultural ties between the two countries. It sheds light on
the eventful history shared by Estonia and Germany and spans the time period from the
Middle Ages to the present day. Many of the Estonian artworks on display are shown for
the first time in Germany. The exhibition can be seen in Dresden until 31 August, before it will be on display in Tallinn in the Great Hall of Kumu from 24 October to 12 April 2026.

"Art and culture connect," said Saxon Prime Minister Michael Kretschmer at the opening ceremony, at which the ensemble Vox Clamantis performed Arvo Pärt’s music in the atrium of the Albertinum in Dresden. The music selection was no coincidence: The exhibition focuses mainly on the artistic dialogue between Estonian composer Arvo Pärt and German painter Gerhard Richter.

Another cultural exchange took place in Chemnitz - one of the European Capitals of Culture 2025. Together with Nova Gorica in Slovenia and Gorizia in Italy, the city previously known as Karl Marx Stadt has taken up the baton from Tartu that carried the title in 2024 alongside Bad Ischgl in Austria and Bodo in Norway.

In Chemnitz the Estonian president, who himself hails from Tartu, and his delegation including Tartu Mayor Urmas Klaas visited the exhibition “European Realities”, which deals with European society and art of the 1920s and 1930s through realistic trends. It was created in cooperation with the Estonian Art Museum and also showcases the work of Estonian artists.

https://x.com/MPKretschmer/status/1920187669805424971

Strengthening Europe, expanding Germany's defence capabilities and boosting economic growth and digitisation: The new German government led by Chancellor Friedrich Merz has big plans.

By Alexander Welscher

Friedrich Merz has finally made it - after a bumpy start. Germany's new chancellor needed an unprecedented second vote to secure the necessary majority in the Bundestag in what German media dubbed "a historic debacle". His failure to initially win enough support during the secret ballot on 6 May 2025 was the first time in Germany's postwar history that a candidate missed a majority in the first round of voting. Even though the of the governing parties CDU/CSU and SPD had already signed a coalition deal and their Bundestag members hold a narrow majority of 328 of 630 seats – 12 seats more than necessary.

The early setback marked the beginning for the 69 years old conservative leader’s four-year term as Germany's tenth postwar chancellor and head of goverment coalition between his center-right Christian Democratic Union  (CDU) and its Bavarian sister party Christian Social Union (CSU) with the centre-left Social Democrats (SPD). It took office exactly six months after former chancellor Olaf Scholz's traffic light coalition government  imploded, triggering snap elections in February whose results yielded no other way to form a majority that did not include the far-right Alternative for Germany (AfD).

Meet Germany' s new goverment

Merz, who has never held a top governmental office with significant leadership responsibilities, heads a cabinet of neun male and eight female ministers with whom he hopes to shape Germany’s policies. The CDU and SPD each provide seven ministers, the CSU three. Here is a breakdown of the new cabinet members who are most relevant to the business world and for the Baltics.

CHANCELLOR: Friedrich Merz

Becoming German Chancellor is a personal triumph for the 69-year-old keen amateur pilot who staged an emphatic comeback in recent years after once being largely written off from the German political stage. The commercial lawyer and economy policy expert from Sauerland in North Rhine-Westphalia entered politics as a member of the European Parliament in 1989. His five-year term in Brussels was followed by 15 years in the Bundestag until 2009, during which he rose to become head of the CDU's parliamentary group, only to lose out to Angela Merkel in a struggle for the party leadership.

During Merkel's 16 years as chancellor, heft the parliament and pursued a career in business as a legal consultant and an executive at the German arm of US investment giant BlackRock. But when his rival announced in 2018 that she would retire following the next elections, Merz tenaciously fought his way back into the limelight, eventually winning the party leadershing and later fulfilling his decades-long dream of rising to the pinnacle of political power in Germany. The chancellorship is the first public office Merz has held in his life.

FOREIGN MINISTER: Johann Wadephul 

The experienced foreign and security policy expert is the first CDU politician at the helm of the Foreign Ministry in almost 60 years. The 62 years old lawyer and lieutenant in the reserve has held a seat in the Bundestag since 2009 and is considered to a condidant of Merz, with whom he has to work together in shaping German foreign policy at a time of rapidly shifting geopolitics.  

ECONOMY MINISTER: Katherina Reiche

The former Bundestag lawmaker will return to politics following a years-long stint at German energy giant E.ON. where she headed the subsidiary Westenergie. Born in the former East Germany, the 51 years old chemist was first elected to the German parliament in 1998 at the age of 25, and subsequently rose in the ranks up to the position of a Parliamentary State Secretary before she switched to the business world in 2015.

FINANCE MINISTER: Lars Klingbeil 

The 47 years old is the new central figure of the SPD, serves as party leader and deputy chancellor, and has taken over the finance portfolio. Having been a member of the Bundestag since 2005 but without any prior government experience, he now controls the purse strings as Germany is set to spend hundreds of billions of euros on defense and infrastructure. 

DEFENSE MINISTER: Boris Pistorius

The 65-year-old is the only minister from Scholz's cabinet to retain his position and has become Germany's most popular politician since taking over the Defence Ministry in 2023. Respected among Germany's military and its allies, the "father of the German brigade in Lithuania" aims to make the Bundeswehr "war ready" - and is set to receive the needed money to do so.

MINISTER FOR DIGITALIZATION AND STATE MODERNIZATION : Karsten Wildberger

The former top business executive without political background heads the newly created Ministry for Digitalization and State Modernization that is to cut red tape and modernize authorities to boost the economy. The 56 years old expert on digital transformation has pursued an international management career and last run Ceconomy, a Dusseldorf-based retail firm that operates consumer electronics stores across Europe,

"Responsibility for Germany"

Presenting the guiding principles of the new German government after taking office, the Chancellor in the parliament appealed to the nation to pull together to bring the country forward again. "The state is all of us," he said in his first government statement in the Bundestag, adding that he is “wholeheartedly convinced that our great country can overcome the challenges of our time on its own and turn them into something good."

In his speech, Merz touched on a wide array of challenges expected to occupy his administration over the next four years – ranging from the country's struggling economy to the war in Ukraine and migration. The conservative leader announced to make Germany more competitive on the global stage, as well as a sweeping economic recovery package and a tough new migration policy in the hope to restore trust at home and reclaim the country's global influence.

What are the plans of the German Chancellor and his government in the main policy fields? Where are its priorities for the economy? What is changing? Here is an overview how Merz and his cabinet aim to address the backlog of reforms in Germany and what new directions are set in the work of the goverment. All of them are outlined in more in the 144-page coalition agreement entitled "Responsibility for Germany”

 FOREIGN AND DEFENSE POLICY

A strong Europe capable of action

Merz has promised to prioritize foreign policy. On his first day in office, he traveled to the key neighboring countries of France and Poland, with whom the German chancellor wants to cooperate closer in a renewed push for European sovereinigty in response to the foreign policy shift in the United States under the administration of President Donald Trump. On both trips Merz was accompanied by Foreign Minister Johann Wadephul. In a sign that the chancellor wants the government's foreign policy to follow a clear line, both him and the chief diplomat belong to the same party – something that has not been the case in Germany for almost 60 years.

Next stops for Merz after Paris and Warsaw were Brussels, Kiew, London, and he visited already Vilnius – even before travelling for his inaugural visit to Washington where Donald Trump´s reelection has driven a wedge between Germany and one of its closest allies for decades. For Merz it a balancing act: On one hand, he has stated that Germany and Europe must become more independent from the USA. On the other hand, he advocates for strong transatlantic relations.

Europe: The German government wants to see a strong Europe and would like to revitalise the European idea of freedom and peace. Germany will be a reliable and stable partner, according to Merz, and will take on more responsibility in NATO and the EU. The Chancellor said he was also banking on international trade in the efforts to revive the economy. "We want to support the EU in concluding as many new trade agreements as possible right now," the chancellor said, adding he wanted to avoid a prolonged trade dispute with the United States. The goal is to have a “strategic Europe” that remains capable of action and secures its supply chains.

Ukraine: Merz promised continued support for Ukraine in fending off Russia's invasion, and is counting on a joint effort by European and American partners. Germany seeks a just, lasting and sustainable peace, while a dictated peace or the subjugation of Ukraine is out of the question."One thing is clear: We are not a party to the war and will not become one. But we are also not an uninvolved third party or neutral mediator between the front, so to speak, " the Chancellor said, adding that Germany is standing unconditionally on the side of the Ukrainian people.

Big plans for defense 

Germany's defence capabilities and defence readiness is continued to be expanded. “We want to be able to defend ourselves so that we don't have to defend ourselves”, said Merz and pledged to turn the Bundeswehr into "the strongest conventional army in Europe". "Our goal is a Germany and a Europe that are so strong together that we never have to use our weapons," Merz said. "To achieve this, we will have to assume more responsibility within NATO and the EU."

The number of German army soldies is to be significantly increased, partly by introducing a new military service model, and the Bundeswehr is breaking new ground with the permanent stationing of a unit abroad.  "The German brigade permanently stationed in Lithuania is our central contribution to deterrence and the defence of NATO's eastern flank. Its establishment, equipping and financing, along with its personnel needs, are a priority", states the agreement of the new coalition government.

In view of the international security situation, the German government has announced its plan to increase defence spending. The coalition would support NATO's proposal to increase expenditure for classic military purposes to 3.5 %  of GDP, plus an additional 1.5% for defense-related infrastructure.

 ECONOMIC POLICY 

Support to the economy and tax cuts for companies

Once envied across Europe, Germany's economy has suffered two consecutive years of recession as inflation, high energy prices and dropping exports weighed on businesses, and posted only 0.2% growth in the first quarter of 2025. Merz plans to get Germany's economy back on track and promised tax breaks, infrastructure investments and cuts to red tape to turn things around. "We can use our own strength to once again become a growth locomotive admired by the world," he said in his first major speech in parliament after his election, in which Merz supported economically liberal policies while taking a more conservative position on social issues.

Easing the burden on companies is a central goal of the new government. Merz’s cabinet has launched a package of tax reliefs and eventual tax cuts for companies worth billions to support the German economy. Main component of the so-called growth booster program, which must still be passed by the Bundestag, is a hefty tax write-off on investments in machinery and other equipment over the next three years, followed by a gradual reduction of the corporate tax rate from 15% to 10% between 2028 and 2032. As a result, the overall tax burden on companies is to decrease from nearly 30 percent at present to nearly 25 percent in 2032. 

The package is the first in a series of expected measures from Germany's new government to boost the economy. Its launch is separate from a huge defense and borrowing package that the ruling coalition pushed through parliament before it even took office. In a major change to Germany’s debt-averse political culture, the now governin parties agreed on loosing the country’s constitution restrictions on borrowing, enabling 1 trillion euros ($1.08 trillion) or more in spending on defense and infrastructure to boost Europe’s biggest economy.

Security of supply and more digitalization

Germany is to remain an industrialised country – while at the same time leading the transition to climate neutrality. Renewable energies and the hydrogen network are to be expanded, approval processes accelerated and new gas-fired power stations built to ensure security of supply. "We will systematically align our energy policy towards affordability, cost efficiency and security of supply, non-ideologically and technology-open," Merz said. 

For accelerating the pace of digitalization in Germany, the cabinet now has set up a digital ministry for the first time. The goverment plans to introduce a digital identity card for all official administrative matters and a platform (“one-stop shop”) for registering online businesses within 24 hours. The transfer of data between notary’s offices, tax authorities and trade offices is to be fully automated. It also wants to simplify the development of start-ups.

By Līva Melbārzde

As Europe redefines its infrastructure priorities in response to shifting geopolitical realities, the Rail Baltica project is emerging as one of the continent’s most strategic undertakings. Representing the largest infrastructure investment in the Baltic region in a century, Rail Baltica is more than just a railway—it is a vision of a more connected, secure, and resilient Europe.

Currently in its large-scale construction phase, Rail Baltica is physically linking Estonia, Latvia, and Lithuania with the European standard-gauge rail network, closing a critical gap in the EU’s North Sea–Baltic transport corridor. With mainline construction now underway in all three Baltic States, the project is gaining momentum, reaffirming its role not only as a driver of economic growth but also as a key enabler of NATO military mobility and regional security.

In the face of increasing global uncertainty, Rail Baltica is a powerful symbol of European unity and strategic foresight. It demonstrates how infrastructure can be leveraged to bolster economic integration, enhance resilience, and strengthen Europe’s collective capacity to respond to future challenges.

To highlight these dimensions and engage stakeholders across the continent, the Rail Baltica project team is launching a series of high-level seminars in major European capitals. The first of these events will take place on 18 June 2025 in Berlin, under the theme:

"Rail Baltica – A Gateway to Europe’s Future and Resilience"

Venue: Haus der Deutschen Wirtschaft, Breite Straße 29, Berlin (Rooms: Amerongen & Schleyer)

Organized in partnership with the Embassies of Estonia, Latvia, and Lithuania to Germany, and supported by the German Chamber of Commerce and Industry (DIHK) and the Eastern Committee of German Business (OstAusschuss), the seminar will bring together influential voices from Germany’s business and diplomatic communities.

The programme will feature:

• Updates on Rail Baltica’s implementation, including recent milestones and what lies ahead.
• A panel discussion on regional integration and the broad economic opportunities the project unlocks for the Baltics and Europe at large.
• Insights into how Rail Baltica supports EU climate goals, boosts cross-border trade, and contributes to the security architecture of the region.

With attendees including representatives from DIHK, OstAusschuss, major industry associations, and Berlin’s diplomatic corps, this event marks an important step in strengthening the project’s visibility and engagement with Germany—Europe’s largest economy and a key stakeholder in the region’s future connectivity.

Rail Baltica is not just a transport corridor.
It is a bold investment in European values, resilience, and the freedom of movement—of goods, people, and ideas. As the project advances, so too does the promise of a stronger, more united Europe.