Bloomberg Surveillance Sep 21, 2026
With Baiba Braze, Minister of Foreign Affairs of Latvia
Latvia's defense production has tripled, and the ministry Baiba Braze runs can see it because it issues the export licences.
A country that shares a border with both Russia and Belarus is usually described as being under siege. Braze said the tension on the ground is low, and that the danger sits somewhere else: sabotage, arson, parcel bombs, drones and money moving into fringe political parties in other countries.
"Not very tense. We have been a member of the EU and NATO for more than 20 years, and we have made sure that we are safe and secure."
Braze, foreign minister of Latvia, on Bloomberg Surveillance, was in New York for the UN General Assembly, and the export figures she cited come from the strategic-goods licences her own ministry signs.
The full segment is covered here so you can skip it.
Here are the 5 arguments that matter.
Key Takeaways
Latvia's own defense production has tripled, which her ministry can measure because it issues the strategic-goods export licences
The headline 5% of GDP is not a fixed number — this year it is running at 3% so far, because the ratio moves with economic growth
Six or seven drone incidents in two years, which she says is not comparable to what Ukraine is dealing with
Russia cannot afford an open war with NATO, so the activity stays below that line and gets bolder
Her list: cyber attacks, information operations, corruption, influence operations and sabotage
Russia has enabled marginal parties on both the left and the right in other NATO countries, with loans, open support and narratives
She refused to name the countries, saying a foreign minister does not comment on other states' internal affairs
The sabotage attempts she names are already physical — bombs in DHL packages, arson at Keir Starmer's properties, attempts to derail trains in Poland
1. Not Very Tense
Jonathan Ferro framed the segment around the UN General Assembly and the energy disruption risk from the Iran conflict and the Russia-Ukraine war, then asked Braze to describe for a US audience how tense things are on the ground in a country bordering Russia and Belarus. She declined the premise.
Twenty years of membership is the answer she gives
Not very tense. We have been a member of the EU and NATO for more than 20 years, and we have made sure that we are safe and secure.
Baiba Braze
What does worry her is not on the border. It is the category of Russian activity that stops short of war, which she calls subconventional, and which she said is continuing rather than fading.
2. The DOJ Indictments
The specific thing Braze pointed at as a serious worry was an American court filing. The Justice Department has indicted people in the US on terrorism financing charges, she said, for murder for hire and for organizing sabotage and other crimes on European soil on behalf of the Russian state.
She gave one example of an attempt that failed and one of what failure does not guarantee.
An armed drone at a German airport
But as we have seen in Leipzig airport where Russian agents tried to attack with an armed drone and where they didn't succeed this time.
Baiba Braze
The same operations can kill people in Europe or in the US
But it can lead to casualties also in Europe or in the US for that matter as we saw from the DOJ's indictment.
Baiba Braze
Latvia's response, she said, runs on two tracks: security and intelligence cooperation with the US, the Europeans and others to stop the operations, and continued military support for Ukraine. She named the Graham Bill's passage as welcome, on the grounds that sanctions on Russia hold and that the allies are seen to be united.
3. What 5% Actually Buys
Ferro said Latvia is one of NATO's biggest spenders as a share of GDP, at almost 5%, and asked how that money is being spent now that the threat is drone incursions rather than tanks. Braze corrected the number before answering.
The percentage moves with the economy
So it's in several parts. One is indeed in sort of hardcore military capabilities, which is almost 5%, as you rightly said. Sometimes it's 5%, but depending on the economic growth, like this year it's 3% this far, which is quite substantial.
Baiba Braze
The money goes to three things. The first is conventional: artillery, firepower and ammunition. The second is dual-use technology, principally unmanned systems, and that is the part she said pays the country back.
The export licences show the production has tripled
And we see it because the foreign ministry issues the strategic goods licenses, so we can see very clearly it has tripled. It has tripled what we produce.
Baiba Braze
The third is regulatory rather than financial. Wartime production cannot run on peacetime rules, she said, so Latvia is loosening its national regulation and pushing for the same at European level. Ferro started to ask where the US fits, and she took the question as an argument for American business.
Deregulation in Europe is a shared US interest
We have very communal interests also at the European level because the U.S. also is looking for easier sort of doing business in Europe. So deregulation will help also the U.S. businesses in that respect.
Baiba Braze
4. Six Or Seven Drones
Annmarie Hordern put the Polish prime minister's warning to her: that Russia may want to test NATO's resolve and show that Article 5 is theoretical rather than practical, possibly through a drone incursion. Braze gave the scale first.
The numbers are not comparable to Ukraine's
We have had six, seven drone incidents in the last couple of years, so it's not comparable to what Ukraine is experiencing or what Ukraine is doing in Russia with 400, 500 drones per night.
Baiba Braze
Those have been handled by national and allied effort, with jets taking the drones down, and Latvia is building the full chain behind that: interception, effectors and radars. On the Polish prime minister's substantive point she agreed, and said it is not new.
An open war is the one thing Russia cannot do
So it's not the open war with NATO. Russia cannot allow itself because the wars, as we see in Ukraine, the three-day war in its fifth year, the wars are unpredictable, and Russia doesn't have that capacity and capability currently.
Baiba Braze
Everything below that line, she said, is increasing: cyber attacks at scale, hostile information operations, corruption, influence operations and sabotage. And all of it points at one objective.
The goal is to take away support for Ukraine
You have to split societies, undermine commitments of the governments, split political forces by investing in the radical wings.
Baiba Braze
5. Who She Will Not Name
Hordern asked whether she sees a split among NATO partners right now. Braze said she does, and located it inside countries rather than between them.
Political forces in allied countries are enabled by Russia
Well, we see that there are various political forces in various countries that are enabled by Russia.
Baiba Braze
Those forces, she said, are the ones not supporting Ukraine's right to defend itself. Ferro asked which countries. She refused, and when he asked why being foreign minister was a reason not to say, she gave the rule, which is that she does not comment on other countries' internal affairs, and then described the pattern anyway.
The mechanism, without the addresses
Marginal left-wing and marginal right-wing forces have been enabled by loans from Russia, by open support from Russia, but also by narratives.
Baiba Braze
The narrative she quoted is the argument that supporting Ukraine prolongs the war. Her counter was legal and then strategic: Ukraine is defending itself under Article 51 of the UN Charter, Russia has not achieved its political objectives on the battlefield, and it is now trying to get them at the negotiating table instead.
She closed on what the subconventional campaign has already tried, which is the part she wants treated as a civil-defense problem rather than an intelligence one.
Three attempts she lists by name
We saw attempts at DHL plane to be in the packages, the bombs to be put in packages. We saw attempts at the arson at Starmer's properties. We saw attempts to derail trains in Poland.
Baiba Braze
That is why she says the understanding has to run through the whole of society, not just the security services: these are operations that can produce serious civilian casualties.
Bonus Insights
The rest of the hour
Braze took the third segment of this edition of Bloomberg Surveillance TV. The same hour carried Ulrike Hoffmann-Burchardi of UBS Global Wealth Management on equities and the limits to AI capital spending, and Bob McNally of Rapidan Energy Group on what a US diesel export ban would do to pump prices.
Braze's bottom line is that the war Latvia is actually fighting is not on its border: Russia cannot afford an open conflict with NATO, so it works below that threshold with sabotage, drones, information operations and money lent to fringe parties inside allied countries, and the defense budget she describes is being spent as much on production capacity and deregulation as on ammunition.
Products, Companies & Tools Mentioned
NATO (Latvia has been a member for more than 20 years, which is her answer to how safe the country is; she says Russia cannot afford an open war with it and works below that line instead)
DHL (One of the sabotage attempts she names: bombs placed in packages destined for a DHL aircraft)
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