Latvia has progressed from a Soviet-run State to an independent country, and now member of the European Union. How has this affected the country and its people?

It has changed everything for the people of my country. Every aspect of life had to change as we regained our identity and freedom. The first steps were political with the national reawakening in the late 1980s followed by the recovery of our independence in 1991.

We are very fortunate because the revolution came about with the minimum of bloodshed. People took the streets, waving the flag of Latvia... it was a massive demonstration to regain what had been taken away from us under Soviet rule.

In the past decade or so, we have shifted from a centralised economy to a free market economy. We have witnessed the restitution of private property to the people, the privatisation of public entities. It has not been easy but progress has been rapid. At present, 90 per cent of SMEs are in private hands, however the government has made it a point to keep a few public entities under its control, in particular the energy sector. In a referendum, the people made it very clear that our energy provider should not be privatised. However, the company, which is profitable, will have to be split into two because EU directives do not allow the same company to be both the generator of electricity and the distributor.

Privatisation has created problems. The urgency to have everything privatised led to a situation that negatively affected property owners. Most of the property that was restituted was rundown and in a bad state. The tenants, however, enjoyed relatively low rent, to such an extent that payment did not cover the taxes owed by the owners.

Before any privatisation exercise goes ahead local conditions are taken into consideration.

In terms of free market processes, the people have a large choice. You can buy anything if you have the money. Ironically, under Soviet rule, people had money but there was nothing they could buy.

After Malta, the Latvians were the most sceptical about EU membership. What were their main concerns?

Even the Estonians were highly sceptical of membership. In Latvia the debate was intensive. We were the last country to have a referendum and the people were given the chance to express their concerns. We listened to everyone. One of the main fears was the loss of our identity. EU membership has nothing to do with the lost of identity... it depends on how strong you defend your country, its culture and its way of life. Ireland and Luxembourg, for example, did not lose their identity because the joined the EU.

The people were also concerned that upon membership prices will rise, inflation will affect people’s pockets, and that regulation will stifle activity.

Now that EU membership is a reality, what is the role of small nations like Latvia and Malta in an enlarged Europe?

What is unique about the EU is that it recognises small States as independent, sovereign entities with an important role to play in the decision making process. Equal irrespective of size. That said, in a democratic sense, it is only fair that the larger countries have a greater say and weight in the voting process. I think that it is amazing that the EU has developed the system of double majority voting... it is a delicate balancing act but it seems to be a reasonable one.

Many new EU citizens look at membership as a solution to their financial problems thanks to an influx of EU funds. What are the real benefits of EU membership?

First and foremost, it marks our return to Europe. We were cut off from the rest of the world. We had lost our identity and freedom. For my country, membership is a means to recover our identity and sovereignty. It is a return to our long-standing roots in Europe.

Economically-speaking, membership gives us access to a huge market. We look forward to becoming part of the common market, with free access to trade routes and the opportunity to attract investment and trade across the union.

The demands of the EU on the country, especially where standards come into play, can be a disadvantage. Standards are extremely high and our people are sceptical of the objectivity of some of these standards. Some may be useful for particular States but in other States an industry’s competitive edge could be lost.

A positive outcome of the acquis communautaire is that it has forced the country to carry out structural reforms – at times painful – in record time. It has been a tremendous effort but it will pay off in the long term.

What do you believe Malta and Latvia have in common?

My visit to Malta, like that of any State visit, was an affirmation of the friendship between the two countries. We will soon be members of the same union, although geographically we are far apart. It is important for Latvia to get to know more about our southernmost European partner.

At the same time, the various delegations that have accompanied me on my visit are always looking for ways to foster a closer relationship between countries. We are particularly impressed with the way your country has incorporated the island’s cultural heritage into the tourism product. We have a lot to learn from you in this respect. Another area of interest is shipping and freeport activities.

What does Latvia have to offer to a Maltese businessman?

A growing tourism industry in Latvia could be an attraction for a Maltese investor. We have a shortage of medium-sized, medium-priced hotels and this could provide a window of opportunity for Maltese businessmen.

You are eastern Europe’s only female Head of State. You have moved from academia to politics. Do you see the role of women leaders increasing in an enlarged union?

If you look at Europe as a stronghold of democracy then everyone should have equal access to a career, even occupying high level positions. Women, however, are hitting a glass barrier in many areas. It is very clear that a woman’s biological role forces choices in her life, but childbearing is a relatively small period in life. What happen when a woman turns 40? Should she not be given a chance to have a career? I think there should be a mechanism that helps women to re-enter the world of work and there should be no barriers that prevent more women from becoming presidents for example.