RIGA — Latvian Prime Minister Andris Kulbergs wants Brussels to hand over €7 billion to help cover the military and economic costs of confronting Russia, as pressure grows over the price of the country’s hard line on Moscow.

The money should come from the EU’s next seven-year budget, under a new Competitiveness Fund, to offset higher defense spending and the collapse in trade with Russia since Moscow’s full-scale invasion of Ukraine, Kulbergs told POLITICO’s Brussels Playbook in an interview.

The cash, which Riga wants to come on top of other funds earmarked for the country, would amount to almost half of Latvia’s projected €15.1 billion defense bill over the seven-year budget period.

The demand comes at a sensitive moment. Latvia has been one of Europe’s staunchest supporters of Ukraine, sharply increasing defense spending since Moscow’s full-scale invasion, even as sanctions and the collapse of bilateral trade have cut deeply into economic links that once ran eastward. But ahead of an Oct. 3 national election, parties arguing that Riga should demand more in return for sanctions and military support are gaining ground.

The European Commission has proposed substantially increasing EU-level defense funding in the 2028-2034 budget, including a €125.2 billion security, defense industry and space pot in the European Competitiveness Fund. That money is designed to finance projects across the bloc rather than provide Latvia with a pre-agreed €7 billion allocation, and the entire budget remains subject to negotiations between EU governments and the European Parliament.

Kulbergs argues that Latvia deserves special consideration because it is borrowing to provide security for countries much farther from the front line. “We are getting our budget deficit to the maximum […] and from that debt we’re paying […] the defense of the whole [of] Europe,” the prime minister said at the government chancellery.

Much of Latvia’s military spending ultimately flows back to richer Western European economies, Kulbergs added, pointing to arms purchases from Germany, France, Spain, Sweden and the Netherlands. “We fuel their economies,” he added.

Election pressure

A sharper version of the same argument is emerging on the campaign trail.

Ainārs Šlesers, a veteran populist businessman whose party sits with the far-right Patriots for Europe group in Brussels, says Latvia should demand compensation when it backs EU sanctions on Russia. Šlesers condemns Moscow’s invasion and says support for Ukraine should continue, but argues that Latvia cannot absorb the costs indefinitely.

“We are losing money … we are talking about how to support Ukraine, but we are a victim,” he told POLITICO at his Riga campaign headquarters.

When EU sanctions come up for renewal, Šlesers said Latvia should “get in return support.” Asked whether that could mean withholding Riga’s backing for sanctions, he stopped short of threatening a veto but did not rule it out. “I don’t want to talk about [a] veto [now],” he said. “I guess that we […] will find a peaceful solution.”

Šlesers, who has business ties with Russian oligarchs, said the country needs to eventually restore economic ties with Moscow, and advocated for a quick end to the war. “There are things which we cannot replace because if it’s your neighboring country and you’re connected historically […] we need to find the right model.”

He argued that whether to hand over territory to Russia should be “a decision by Ukraine” but argued that other countries have lost territory to Russia after conflicts, including Latvia, “to reach [a] peace agreement.”

Kulbergs’ center-right party currently leads the polls, but coalition arithmetic could determine how far Latvia’s Russia policy shifts after October.

The far-right, pro-Russia Sovereign Power party, polling second, wants to restore ties with Moscow but is considered off-limits by mainstream parties. Šlesers, polling third, is a more plausible coalition partner — and Kulbergs has left the door open to governing with him.

The center-left Progressives, polling fourth and also hoping to enter government with Kulbergs, warn that bringing Šlesers into the coalition would gradually soften Riga’s line on Russia.

“I’m 100 percent sure Latvia’s foreign policy towards Russia is going to soften over time,” the party’s prime ministerial candidate Andris Šuvajevs told POLITICO outside parliament. He pointed to possible sanctions exemptions for Russian business interests and ministers “speaking in a more friendly tone towards Russia.”

Tough on Russia

Ahead of a new sanctions package due in the fall, Kulbergs called for a total EU visa ban on Russians. EU countries granted more than 630,000 visas to Russian citizens in 2025.

In the last sanctions package, France and Italy resisted a blanket ban on Russian combatants, arguing this issue should be covered by EU visa rules rather than as part of sanctions, while northern and eastern countries pushed for tougher restrictions. The eventual deal created the legal and political basis for barring Russian combatants and ex-combatants who took part in the war — leaving it up to EU countries to decide when the ban would take effect. 

“Are we nuts?” said Kulbergs on the delay. “We allow Russian military soldiers to be given visas, the ones killing [Ukrainians] on the field.”

He also urged EU countries to revisit sending Russia’s €210 billion in sovereign assets frozen in Europe to Ukraine, dismissing concerns Moscow could challenge the move after the war.

Kulbergs also rebuked European Council President António Costa’s decision to open a communications channel with the Kremlin, saying doing so should be “a decision of all the countries together.”

He called any Kremlin outreach “a useless exercise,” arguing there’s no sign President Vladimir Putin is ready to negotiate and that talks would merely give Russia “breathing time” to make its “next move.”

Despite Latvia severing ties with its eastern neighbor, and Kulbergs’ hawkish position on relations with Moscow, he said “we have to be open” to reestablishing ties once Russia pays reparations to Ukraine and those responsible for war crimes face justice, pointing to postwar Germany as the example to follow. “Do we isolate Germany because of that? No, it’s acceptance of guilt, acceptance of wrongdoing, punishment, and retribution,” he said.

After a ceasefire, Kulbergs concluded, “the insecurity of the border will only rise” as the real threat will be a wave of migration as hundreds of thousands of “screwed up” soldiers return from the battlefield seeking a better life and other citizens flee as Moscow’s war economy crumbles.

Dave Brat, Australia’s freshly confirmed U.S. ambassador, didn’t need to learn another language to qualify for his new gig. But he’s coming into the job fluent in a niche dialect that could give him a big advantage.

“He can speak Trump,” James Braid, President Donald Trump’s director of legislative affairs, said in a recent interview. “He can understand Trump, and he’s recognized as a longtime Trump ally. And I think that will really help him facilitate Aussie-United States relations.”

This dynamic could be key as Brat gets to work in Canberra, where political leaders have been rattled by the Trump administration’s aggressive trade agenda resulting in the implementation of a 12.5 percent tariff on Australian goods.

A longtime economist and academic, Brat is an avowed free trade advocate, which could quell some nerves on the ground. But Brat has also defended the Trump administration’s tariff regime as a kind of reset of the U.S. economic relationship with the world, telling a local news outlet in his home state of Virginia last year that “these tariffs are an attempt to bring some balance.”

At the same time, he has the ear of the White House, having earned Trump’s trust and respect long ago as a Republican member of the U.S. House of Representatives from 2014 to 2019. There, Brat was a member of the House Freedom Caucus — a contingent of conservative hard-liners known for taking uncompromising positions on federal spending — and in 2016 he embraced then-presidential candidate Trump as other more establishment Republicans turned their noses.

“The president hasn’t forgotten that,” said Braid, who was policy director of the Freedom Caucus during that period.

The Freedom Caucus was, as it is now, perpetually at war with party leadership on Capitol Hill, but the group harnessed Brat’s affable disposition and deft touch in high-stakes policy negotiations. He was obsessed with making sure that the group’s goals would be understood both by negotiators across the table and the public — something his former colleagues expect him to bring to the international stage.

Justin Ouimette, a former longtime executive director of the House Freedom Caucus, said in an interview that Brat’s approach has always been, “here’s the message and here’s where it is coming from” — a tactic that “tends to lower the temperature.”

“He was one of those guys that’s typically dispatched to disagree without being disagreeable,” Braid agreed. “Brat is really effective at stating a position, being firm while also collaborating to reach an outcome, and so that that experience will serve him well in his new diplomatic post.”

There’s hope among some in Washington that Brat’s views on trade, coupled with his ties to the Trump administration, could help soothe existing tensions and result in a positive working relationship between the U.S. and Australia. That optimism is shared by Virginia’s two Democratic U.S. senators, Tim Kaine and Mark Warner, who supported Brat’s nomination.

“He will be very focused on commerce, trade, and economic opportunity. You know, things that are good for the U.S. and good for the Australian economies,” said Kaine, who as governor once relied on Brat’s contributions to a bipartisan economic advisory panel to build the state’s budget.

“He’ll be very mindful of the commercial relationship, and I think that’s something that will be viewed positively by the Aussies,” Kaine added.

He noted that Virginia’s massive naval base would now have an advocate in Brat amid the continued implementation of AUKUS, a trilateral security pact among Australia, the U.K. and the U.S. in 2021 aimed at helping Australia acquire nuclear-powered submarines.

Warner was less effusive, saying he has “disagreed with Dave on a lot of issues,” but acknowledged he also was “a smart guy” he supported for the ambassadorship.

Brat also has long been vocal about the competitive threats to the U.S. posed by China, a concern shared by Australia in its diplomatic engagement with the Pacific region. Ouimette speculated that “his clear-mindedness and alignment with the administration on that particular issue weighed in his favor” as the White House was making its ambassador selection.

There are still some unknowns, however, including whether Brat will be living in Canberra full time and how he’ll handle staffing issues at the U.S. Embassy.

“I understand that Mission Australia’s current staffing and facilities are insufficient to meet the demands of our expanding Alliance activities,” Brat said in a written response to U.S. Sen. Brian Schatz, a Hawaii Democrat, as part of his confirmation proceedings. “Our investment in diplomatic infrastructure reflects our commitment to this vital partnership.”

Brat’s arrival heads a wave of new senior appointments at the embassy including Robert T. Koepcke as deputy chief of mission and Jonathan A. Habjan as counselor for political affairs.

A slew of new military postings at the embassy includes Col. Richard Bush as defense attaché; Col. Pete Roongsang as Army attaché; and Col. Kabir Rao as chief of MILGROUP, which manages security cooperation, foreign military sales and defense relations with the Australian Armed Forces.

Brat also hasn’t spoken publicly or at length about how or why he was recommended for this particular posting, though he said during his confirmation hearing that he “loved the Australian people I have met in my life and appreciate their decency, wit and sense of humor” — as well as being a “tennis fanatic” eager to engage in “sports diplomacy across the board.”

Australian Prime Anthony Albanese is also a keen tennis player, known to invite dignitaries and journalists to play on the court at his official Canberra residence, The Lodge.

“I’m very much looking forward to having a hit of tennis with David Brat,” Albanese told POLITICO, adding that he believes Brat’s appointment will “bolster” the existing alliance.

Brat did not respond to POLITICO’s requests for interviews.

But Braid made clear that sending Brat to Australia is not a vanity posting or just a favor for a longtime Trump loyalist, calling Brat “a serious lawmaker with serious chops.” He conceded that while Brat “comes from a political tradition that may be a little bit unfamiliar to the Australians,” he brings relationships and experiences to the table a career foreign service officer could not.

“This is a serious person,” Braid said.