At the tail end of the Cold War, on the westernmost tip of the Soviet Union, Valdis Dombrovskis sat in his home in Riga and tried to tune in to Voice of America.
The station jumped all over the radio dial as broadcasters played cat and mouse with the Soviet censors trying to jam their signal, but the young man who would grow up to become the EU’s trade chief kept chasing it.
He knew the propaganda. He wanted to hear what the US had to say for itself.
“Since kindergarten we were indoctrinated with all this communist stuff, and the US was kind of the arch evil hegemon of imperialists,” said Dombrovskis, a former Latvian prime minister. “Of course in everyday life, when you were growing up, this perception was changing.”
It is a sign of just how fast the arc of history can bend that Dombrovskis has become the EU’s go-to person for tackling its thorniest problems. Now as European commissioner for trade, he finds himself at the sharp end of EU’s efforts to rebuild the western alliance that won the Cold War, dominated the world and was tipped into crisis by the US President Donald Trump.
“It is important to maintain and develop this strategic partnership,” Dombrovskis said. “It’s important also internationally to get the US back to multilateralism.”
In Brussels, Dombrovskis is known for his deadpan, almost robotic delivery. He sticks to the script and focuses on detail, often from behind a thick folder of documents.
A meme making the rounds in the EU’s de facto capital supposedly shows Dombrovskis in 16 different emotional states — the same photo is used for all of them, his usual neutral expression behind rimless glasses.
Officials who have worked with him — and those who have sat opposite him in negotiations — say that lack of charisma is his secret weapon: Dombrovskis is never fazed, regardless of what is thrown at him.
It also makes him difficult to read and officials say that people often underestimate him, despite the fact that he has overseen the regulatory framework that put the EU at the forefront of green finance and prepared the bloc’s financial rulebook for life without the City of London.
Dombrovskis will certainly mark a change from his predecessor, the back-slapping Irishman Phil Hogan, who in August quit after breaching COVID-19 rules.
Hogan was just the latest in a string of EU trade officials who irritated their counterparts in Washington. On a visit at the beginning of the year, Hogan was given a dressing down by US National Economic Council Director Larry Kudlow, although with US president-elect Joe Biden’s Irish roots, he might have proved an asset.
In any case, the arrival of Biden should lighten the mood. Antony Blinken, his nominee for US secretary of state, in September said that the US needs to end the “artificial trade war” with the EU.
“We ought to be able to do it. We’ve got the same basic goals.” Blinken said.
However, the structural tensions will likely remain — the EU’s first major policy decision following Biden’s election victory was to impose retaliatory tariffs on US$4 billion of US goods as part of the long-running fight over subsidies for Boeing and Airbus.
“I still believe there is much more which is binding us together than pulling us apart,” Blinken said.
His back story helps to explain why.
Dombrovskis was born in 1971 in a Baltic country that had at the end of World War II unwillingly been absorbed by the Soviet Union. It was a monochrome world where people turned to the black market to secure illicit goods from the West.
“Everything which was from the West, like the music and clothes, was cool,” Dombrovskis said. “It was all semi-official and semi-legal in terms of how we were getting hold of all this.”
He was studying physics in Riga when the Soviet Union in 1991 collapsed and Latvia won independence.
Dombrovskis spent most of the 1990s in academia, switching between science and economics, moving from Riga to Germany and eventually to the University of Maryland on the outskirts of Washington.
On the first day at a military lab, where he was supposed to be researching laser technology, the guard refused him entry. Without a passport from a NATO country, he was rated a security risk and only allowed in after colleagues turned up to vouch for him.
The value of a Latvian passport was about to increase dramatically. When Dombrovskis returned home after a year, he found a country in a hurry.
New institutions and new political parties were springing up as Latvia rushed to cement its realignment with the West by joining NATO, the EU and eventually the eurozone.
Dombrovskis landed a job as an analyst at the Latvian central bank. Three years later, in 2002, he was the country’s minister of finance.
ARCHITECT OF THE EU
That meant a front row seat in the construction of the European project, with all its compromises and contradictions.
“So I could observe early damage to the stability and growth pact,” he jokes in a reference to a notorious meeting in 2003 when European Commission members blocked sanctions on France and Germany for breaching EU fiscal rules. The precedent set has handicapped EU budget enforcers ever since.
Six years later, in the grip of the financial crisis, Dombrovskis was given another lesson in European realpolitik: The rules bite harder for little countries.
In February 2009, the Latvian government collapsed. With the economy in free fall and the state on the verge of bankruptcy, then-Latvian president Valdis Zatlers turned to 37-year-old Dombrovskis when he could find no one else to lead the country through its bailout.
Dombrovskis pushed through a brutal austerity program worth about 16 percent of GDP as more than one-fifth of the country’s output was wiped out. Unemployment exceeded 20 percent while about 5 percent of the population left the nation.
At the end of each review, Dombrovskis invited the country’s creditors to his office and checked off one by one the measures they had demanded to release the next tranche of funds, each policy action highlighted in green, yellow or orange, depending on its status.
You do not normally see that much attention to detail from finance ministers in bailout countries, never mind a prime minister, officials involved in the process said.
A bailout program is usually fatal for a government, but Dombrovskis went on to win two more elections, becoming Latvia’s longest-standing prime minister since independence.
He quit the premiership abruptly in November 2013 after 54 people were killed in an accident at a grocery store. However, two months later, Latvia joined the eurozone.
Dombrovskis was quickly embraced by the EU, named European Commission vice president for the euro and, later on, financial services.
He had managed to persuade Latvians that austerity was worth it. In his new job, he had to help persuade Greece.
Dombrovskis rates the day in August 2015 when he signed the third Greek bailout deal to keep the country in the eurozone as one of the most important moments in his EU career.
If he can put trade relations with the US back on track, he might well have another.
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