Interesting insights and valuable perspectives
by Alexander Welscher
Latvian Central Bank Chief Mārtiņš Kazāks has given some insights and a macroeconomic outlook during a business lunch with AHK members on 9 December. Outlining the current economic development, the Governor of Latvijas Banka highlighted Germany’s importance for the macroeconomic trajectory in Europe. "Germany is my hope for the next three, four years", he said in his presentation, referring to the comparatively low government debt level of Europe's biggest economy and the extra headroom provided by the loosening of the debt brake and the extrabudgetary funds for defense and infrastructure.
"Germany has the ability to drive the European economy now, but it needs to do it smartly", Kazāks emphasized, adding that there is a risk of pushing the debt without any benefit and productivity. During his presentation and the discussion with the audience, the internationally widely respected financial expert also addressed other challenges lying ahead in the economies of Germany, Latvia and other European countries, including above-average food-driven inflation and persistent wage pressures.
Kazāks first became Latvian Central Bank chief in December 2019 and was reappointed for a second five-year term in February 2025. Kazāks was nominated by the Latvian government as a candidate for the position of ECB Vice-President, which will become vacant at the end of May 2026. However, at the Eurogroup meeting on the candidates for this post, three rounds of voting were held. The President of the Bank of Latvia, Mārtiņš Kazāks, together with Portugal’s former finance minister Mário Centeno, withdrew in the second round of voting. It was subsequently decided that Croatia’s central bank governor, Boris Vujčić, would be formally nominated for the position.
Kazāks was fittingly put forward as a candidate on the day of the Baltic Capital Market Conference in Riga, where financial experts were discussing the development of the Baltic capital market. Among the more than 500 participants and 35 speakers of the event held on 27 November 2025 were also the Baltic finance minister Jürgen Ligi (Estonia), Arvils Ašeradens (Latvia) and Kristupas Vaitiekūnas (Lithuania), as well as Latvian Prime Minister Evika Siliņa.
While a common unanimous conclusion of the conference emerged that the potential of the Baltic capital market is still significantly underutilized and its development is crucial for the region's long-term economic stability, growth, and security, the discussion indicated that a strong capital market will not emerge overnight. Needed is more regional cooperation, the right policy framework and mindset, as various experts in their speeches and panel discussions pointed out.
A similar success recipe could be heard at an event organised on 25 November 2025 by the Konrad-Adenauer-Foundation, the Bundesbank and the German embassy in Riga about a topic of growing urgency for Europe. Under the title "Frugal No More? Fiscal Policy in the Baltic States Between Stability and Security Requirements", a financial expert discussed defence spending and fiscal policy. Among the participants were Latvian Finance Minister Arvils Ašeradens and high-ranking officials of the Baltic Central Banks.
