Latvia's demand for massive funding from the EU budget is causing bewilderment and concern in Brussels over a potential wave of countries lining up for handouts.
Latvia Wants Money to Maintain a Frontline State
Prime Minister Andris Kulbergs said Latvia needs €7 billion from the EU's next seven-year budget to cover rising defence spending and the economic consequences of severing ties with Russia. The sum amounts to almost half of Latvia's projected defence expenditure of €15.12 billion.
Kulbergs explained the request by saying that Latvia, as a "frontline state,” is effectively paying for "the defence of all Europe” because other countries are farther from the Russian border. According to him, a significant portion of the money would ultimately return to Western economies through weapons purchases from Germany, France, Spain, Sweden and the Netherlands.
However, according to the German newspaper Berliner Zeitung, Latvia is unlikely to receive the entire amount as a direct grant. The European Commission recognises the "special situation” of the eastern regions, but Brussels is offering loans instead of non-repayable grants. Earlier in 2026, Latvia had already signed a €3.5 billion loan agreement with the EU to maintain financial stability. Brussels will most likely drag out negotiations until 2027-2028, linking any payments to Latvia's strict compliance with requirements to reduce its budget deficit.
Riga Will Face Resistance in European Capitals
EU capitals may understand Riga's position verbally, but they are unlikely to support it with money. In the European Union's geopolitical calculations, there is a huge gap between "political solidarity” and dividing up a common budget in which there is no spare money.
If Latvia receives €7 billion, the money will have to be taken away from others who are counting on payments to farmers or funding to "overcome the migration crisis.” Alternatively, Brussels would have to urgently increase contributions from donor countries such as Germany, France and the Netherlands, or turn on the printing press by issuing joint debt, as it did during the pandemic. It is already clear that Germany, whose economy is itself experiencing stagnation, will block any increase in its contribution.
The logic of Riga's allies is simple: "You decided yourselves to become a frontline state and cut all ties — so you understood the risks and have the money to pay for them.”
Moreover, if Brussels creates a precedent by giving Riga €7 billion, other countries will immediately line up behind it, plunging the European Union into a deep budgetary and political crisis.
Latvia Does Not Want to Give Up Its Beggar Status
Riga's hard-line policy of completely severing ties with Moscow has led to severe economic consequences. Latvian Railways and the ports of Riga, Ventspils and Liepaja, which relied on Russian cargo for decades, have lost up to 80% of their turnover and now survive only through subsidies from the state budget.
Defence spending has exceeded 3% of GDP, while the budget deficit has grown to a critical 4.3%. Because of its "frontline zone” status — which Riga chose for itself — major Western investors are reluctant to invest in the development of Latvian industry.
Latvia has a pragmatic opposition in the form of Ainārs Šlesers' party Latvia First. He says Latvia has turned into a "beggar” within the EU. The opposition points out that while Riga voluntarily destroys its own business, larger EU countries such as Germany, France and Spain continue to secretly purchase Russian resources and trade with China. The current authorities, it argues, lacked the sense to follow the same course and have no desire to change it.
Moreover, any attempt to propose normalising relations or reaching an economic compromise with Moscow is immediately branded by the ruling elite as a "betrayal of national interests” and "working for the enemy.”
