Latvia banking crisis: Riga wary Russia could be to blame for 'hybrid warfare'

  • Earlier this week, Latvia's defense ministry said the corruption allegations that led to the detention of the country's central bank governor could be part of a "massive information operation" from an outside source.
  • The scandals engulfing Latvia's banking system have come as a shock to a country that has long-advertised itself as a financial bridge between Europe's west and east.
  • Latvia's Finance Minister Dana Reizniece-Ozola told CNBC Thursday that Riga would continue to assess the corruption allegations leveled against Rimsevics "so that we can better judge whether there is some active hybrid warfare (being) carried out here in Latvia."

The banking crisis rocking a small Baltic nation in Europe has turned into a potential diplomatic incident, as Latvia has signaled Russia might be trying to damage the country's reputation ahead of a general election.

Earlier this week, Latvia's defense ministry said the corruption allegations that led to the detention of the country's central bank governor could be part of a "massive information operation" from an outside source.

The ministry claimed similar incidents, aimed at influencing presidential votes, had been seen in France, Germany and the U.S.

While Latvia does not name Russia as a perpetrator specifically, the ministry cited recent events as evidence of an attempt to taint Riga's image and erode public trust in the state ahead of its vote for a new premier in October.

The evidence for allegations made by Latvia's defense ministry was unclear.

Europe's financial bridge

The scandals engulfing Latvia's banking system have come as a shock to a country that has long-advertised itself as a financial bridge between Europe's west and east.

One example the ministry referenced is the origin of a photograph featured in an Associated Press news agency story, in which details of the allegations against Latvia's central bank chief Ilmars Rimsevics first appeared.

Latvia's central bank governor Rimsevics arrives at the news conference in Riga on Tuesday 20th February, 2018.
Ints Kalnins | Reuters
Latvia's central bank governor Rimsevics arrives at the news conference in Riga on Tuesday 20th February, 2018.

Latvia's Finance Minister Dana Reizniece-Ozola told CNBC Thursday that Riga's strategy communication professionals would continue to assess the corruption allegations leveled against Rimsevics "so that we can better judge whether there is some active hybrid warfare (being) carried out here in Latvia."

'Very important' moment for Latvia

Russia has denied meddling in foreign election campaigns, although respective authorities in the U.S., France and Germany have all directly accused Moscow of interference.

Speaking to reporters at a news conference Tuesday, Rimsevics said the allegations he is facing, which were made by the Russian owner of a Latvian bank, marked a "very important" moment for Latvia. He denies any wrongdoing.

A head office of the ABLV Bank is pictured in Riga.
Ints Kalnins | Reuters
A head office of the ABLV Bank is pictured in Riga.

Rimsevics added that some Latvian banks "wanted blood" after their activities were restricted in the wake of the country's accession to the euro zone.

Latvia's corruption agency said the investigation concerning Rimsevics was unrelated to money laundering accusations against Riga's third-largest lender, ABLV bank.

Last week, the U.S. Treasury accused ABLV of defying Western sanctions by allowing its clients to conduct business with parties connected to North Korea. In response, ABLV said the accusations were based on unfounded and misleading information.