Banking with Chicken Little in Latvia

There are reasons for concern everywhere about the financial system, especially in light of the Eurozone debt crisis, the postponed, but still possible collapse of the euro and other things based on facts, figure, events and rational analysis. But that is not the biggest immediate risk for bank customers in Latvia. The biggest risk is proving to be the customers themselves.

Whatever else banks are, they are institutions based on trust at the customer level. That is, the bank is kept solvent by the fact that depositors a) believe the bank will be there the next day, which depends on b) most of the other depositors being there the next day. If that doesn't happen, whatever else the bank is doing with the money entrusted to it by customers doesn't matter, because, basically, the customers cannot be trusted to stay with the bank and can, for whatever reason, seriously damage it or pull it down.

This is what is starting to happen in Latvia with the initially groundless panic surrounding Swedbank and, to a far lesser extent, SEB. Both parent banks in Sweden are stable, solvent, and there are no signals from any of the many third parties watching the banks (auditors, analysts, shareholders) that anything is wrong (or, for that matter, that the official authorities, which there may be some reason to mistrust, are hiding anything). But now in Latvia, the mass hysteria of bank depositors is itself becoming at least a low intensity threat to Swedbank and the other banks. It at least suggests there is some truth, but little reason behind the saying that in bank panics and runs, the cool and rational will fare the worst, remaining as the “last man not taking everything out of the bank”.

There may be an explanation, but not a justification of public behavior in Latvia in connection with the recent closing of Latvijas Krājbanka. However, that was a relatively small bank in terms of assets (but broad-based in terms of numbers of customers) and its demise was the result of alleged criminal behavior by the owner of its parent Snoras Bank, the Russian millionaire Vladimir Antonov. Also, thousands of customers were compensated to the extent of their deposit insurance coverage very quickly, with some LVL 200 million paid out within days of the collapse.

The fundamental problem is that people in Latvia now have a largely irrational distrust of banking system as a whole, with Swedbank singled out as the market leader, and a far  less irrational mistrust of government authority based on inept initial statements (Krājbanka is OK) by the Financial and Capital Markets Commission (FCMC) in connection with the collapse of Snoras in Lithuania. This mistrust is showing signs of turning into a kind of mind-set of the Middle Ages. What I mean by that is that people see their surroundings as governed by incomprehensible, mainly malevolent and arbitrary forces beyond their control or understanding. Wars, plagues, famines were frequent occurances and to the average illiterate peasant, they simply happened or were acts of God or other mystical forces. It now seems that many Latvians view the financial system and their environment as a whole as a malevolent force to which one can only react in the short term, based on the basic emotions fear and suspicion, putting reason and the checking of emotions against facts on the back burner. It is the kind of mindset that led to numerous panics, delusions, witch-burnings, children's crusades and other acts of mass hysteria in one form or another. This is shocking and baffling to the more rational societies of Europe, in particular, the Swedes.

Another way to put it is that these recent and still ongoing events show that the greatest risk to any Latvian customer of a stable, well capitalized and profitable Swedish-owned bank is the fact the many of his or her fellow customers are like Chicken Little, ready to run about madly shouting that “the sky is falling”. It would almost be reason enough to move one's assets, if possible, to Swedbank in Sweden, where the cohort of bank customers is less excitable and irrational.

Weaponizing the Russian language in Latvia again

When I wrote about the successful signature campaign by Latvian citizens to make Russian the second state language, I got some comments on Twitter and elsewhere that “a language is just a language” and it was somehow wrong to associate demands for Russian as a state language with the Soviet policy of Russification.

This is surprising, except when it comes from the generation that doesn't fully remember what the Soviet Union was like. To be honest, I didn't live in Latvia then, but I participated in many emigre Latvian activities, including demonstrations against the Soviet russification policy, which consisted both of imposing the Russian language on the Baltic populations and massively importing Russian-speaking labor (at least to Estonia and Latvia). The latter means of russification ended with the collapse of the USSR in 1991.

The actions of Balts abroad were based on personal experience (visiting the Baltic States), anecdotal stories and academic research (including a book by the Latvian political scientist and present-day Saeima deputy Rasma Kārkliņa) that characterized policies regarding the use of Russian in non-Russian Soviet republics as part of the policy of russification. It is probably beyond reasonable dispute that the Russian language, during the Soviet era, but also with precedents in Czarist Russia as far as the Baltic were concerned, was used as a weapon of state policy aimed at subjugating and, eventually, assimilating the Baltic nations to some greater, Russian-dominated ethnos.

The Soviets made it clear-- the future belonged to a Russian-speaking new Soviet people that would have erased all traces of the diverse national identities that had been (in some cases forcibly) incorporated into the USSR. Those policies were terminated with the collapse of the USSR, but it is reasonable to say that the widespread post-Soviet knowledge of Russian, whatever merits one can ascribe to it otherwise, could also be described as one of the badges of occupation. In other words, on a “but for” basis, many Latvians would not speak Russian but for the occupation of Latvia for 50 years, a period of time when they were compelled to learn Russian. Above and beyond Russian as a compulsory subject in school, there were also campaigns (proclaimed in the Latvian-language Soviet press) exhorting people to improve their Russian and emphasizing the role of Russian as the basis for the new Soviet nation of the future.

As a language learned by compulsion during the totalitarian occupation of Latvia, Russian can be seen as a weapon that has left its impact on most Latvians (and non-Russians in Latvia, such as Armenians, Poles, Georgians, etc.), even if that impact has entirely benign consquences today (buying a beer at a Moscow bar, watching Russian movies, whatever). However, those consquences are benign only because the regime of Russian domination and compulsory teaching of Russian has ended. If it had not, “Russianspeakingness” would continue to be a sympton of russification and a badge of occupation and dominance by a foreign power.

The successful signature campaign to restore Russian as a state language in an independent Latvian state, reviving, at least formally, the status it had in the Soviet Union, is an effort to make Russian a weaponized language again. Since there is little or no evidence that ethnic Russians in Latvia cannot conduct most of their daily lives speaking Russian, there is no logical need to make Russian a second state language except to make it a weapon again.

To be sure, it is a weak and irrational weapon if, as some suggest, it is aimed at expressing some kind of protest by the “Russian-speaking” (read ethnic Russian) citizenry for not getting a share of political power after the recent election. Unfortunately, their poster-boy, Riga mayor Nils Ušakovs, ran mostly as a populist social democrat, attracting some ethnic Latvian votes. His Harmony Center party (Saskaņas centrs/SC) was acting like a party of Russians, not a Russian party pushing for specific issues relating to Russians as a significant minority in Latvian. As a “Russian” party, SC should have agitated for more adult education in Latvian as a foreign language to make more citzens functionally bi-lingual as well as for home language instruction to keep Russian children form losing their native language (something the USSR never did for minorities living outside their borders). Most non-Russian Latvian citizens would have no issues with that. But those Latvians, who don't see Russian as “just another language”, should object against having a weapon pointed at them again. 

Russian as an official language = re-Sovietization

Riga is a heavily Russian city, always has been since I personally knew it, which is from my first visit in 1980 or so. There appear to be no problems getting by in Russian here, just this morning, as I was buying my copy of the magazine Ir at a Narvesen shop, the clerk smoothly went from telling another customer something in Russian to asking me for my LVL 0,95 in Latvian. As an interesting aside, the girl behind the counter looked to be of Roma (gypsy) ethnicity, a people who, in Latvia, mainly have Latvian as their mother tongue going back for centuries.

There is no lack of Russian culture and media here. There are placards for all sorts of Russian singers and entertainers coming to Riga. The Russian Theater in the Old Town on Līvu Square has been spectacularly renovated and attracts an audience made up of anyone who understands Russian. Contemporary Russian TV series as well as old Soviet films are shown on Latvian TV channels with subtitles, something which (except on some channels) is never done for English language material, where a Latvian voice-over (murmulis) is the standard procedure. Some commercial signeage is both in Latvian and Russian, and Russian foods and canned goods are sold in their Russian-language packaging with small, Latvian-translated labels (in micro-typeface) pasted on.

In short, Riga is a very comfortable town to be Russian in. You can make it through your whole day speaking Russian, because most of the population does, and in a commercial situation, the customer's language is what matters (for making the sale and building the relationship). Even in some hard-line, state-language only institutions, a translator will eventually be called if thats what it takes to get important business done, so that the Russian-speaker will still remain in his/her language sphere.

Given all that, enough ethnic Russian Latvian citizens (so we can forget that other issue that gets brought up whenever “the Russians” are discussed) signed a petition to have a referendum on making Russian a second official state language. To me, that sounds like bringing back the Soviet Union – the bi-lingual signs everywhere that weren't really based on language equality, but rather, we will have your Latvian jazik around until we absorb you, make all the other non-Russian Soviet “nations” part of the “we are Russkie-Borg”. It was prelude to a “soft” destruction of national identity (as opposed to the Siberian alternative), Chapter Two of the Russification policy of Czarist Empire.

The petition campaign, was, or will be, at the end of the day, part of a campaign to resovietize Latvia at an official, day-to-day level. It will be back to when, if a few Russians were present, everyone spoke Russian. In the Soviet era, it was because of fear of political repercussions, but if the second official language is passed, it will be because of the laws and regulations of the independent, democratic Republic of Latvia.

Perversely enough, the whole process may have started with a failed initiative by Latvian nationalists to petition for a referendum to make all state-financed education in Latvian only. But was that enough to trigger the successful counter-petition by the pro-Russians, or was it merely a lucky excuse? It almost didn't get off the ground because two different Russian nationalist groups were at each other's throats for a while as to who would start the signature gathering. Then there was the extraordinary Saeima election and the bizarre attempts by Valdis Zatlers and his Zatlers' Reform Party (ZRP) to get the pro-Russian Harmony Center (SC) into government at all costs.

The ZRP's efforts were a  spectacle, against all political logic on both sides of the attempted coalition. The political programs of the ZRP and SC didn't match – center right parties and self-proclaimed populist social democrats cannot have too many common policies in government. Moreover, the SC, by dropping most of its populist positions in order to get into a government with the ZRP at all costs, proved nothing but that it was a chameleon willing to betray the electorate that believed its own slogans.

The SC apparently took great offense at not being let into government as a “Russian” party that got a few more votes that anyone else (as if “Russian” and not liberal, conservative, social-democratic, centrist was an actual political ideology). Then one of the SC leaders and Riga mayor Nils Ušakovs publically signed the petition, apparently triggering a wave of copy-cat signings by other SC members. This all was in the interests of “national bolshevik” Vladimir Linderman, who was the de-facto leader of the petition signing movement, and “rapped for Russian” in a video along with the semi-monolingual Valerijs Kravcovs, an ex-Saeima deputy, ringing a huge motherfucker of a bell (you were wondering when I would let slip some obscenity, weren't you? :) ). Ušakovs said he was merely asserting his self-esteem (strange, for one of Latvia's most photogenic young politicians), but Linderman and his droogs were dead serious – they want to impose Russian as a second language and will do their best to see that it is enforced.

The unintentional consequences of Nils' wounded self-esteem and his self-proclaimed respect for Latvian as the sole national language (go figure on that one) will be that Latvian will end up back where it was in the Soviet Union, as the language you speak at home, on the street, or in official situations when there are no Russians around to demand that their language be spoken,

I won't go so far as to say that Russian as a second language will be the end of the Latvian nation and all that (even if that is one possible scenario), but it will end up at least as a significant nuisance (if properly resisted). One example is French in Canada, which means that even the Inuit who have never been near Quebec have to pour their milk/lait on their morning cereal. Or the Finns, who have to learn Swedish (to some extent) in school out of respect for a few villages where the ethnic Swedes still speak it (on the island of Åland, the Swedes on this Finnish possession speak English when dealing with the mainland. Then there is Ireland, where the Irish, who all speak English, with the exception of some Leprachaun-infested villages, where some people actually speak Irish, but everyone has to learn and forget Irish in school in any case.

I moved to Latvia in 1995, not Russia, and, while I have visited Russia a couple of times, I have no desire to live there. Being in a virtual Russia was not part of the deal of what I now see (for a number of non-language related reasons) as a dubious choice to live in Latvia (the economy is a wreck, the future bleak). Frankly, I don't want my son (16) to grow up in a Russified country, where the role of Russian goes well beyond the present-day “modus operandi” (described at the start of this post) that seems to work, while presenting a lesser, but nonetheless non-trivial threat to Latvian identity.

Don't get me wrong. I am a pretty multicultural person and can get along/have gotten along elsewhere – Sweden, the US, where I grew up, Germany, where I have worked and know the language. But for me, Russian as a second official language would be a defeat of all that Latvian independence meant, a re-sovietization of conditions in this country. Count me out on that...