Prime Minister Andris Kulbergs’ conservative United List has won a comfortable victory in Latvia’s parliamentary elections, securing 41 of the 100 seats and nearly tripling the party’s number of MPs. The right-wing populist Latvia First (LPV) finished second with 13.1%, closely followed by the joint electoral list of the Russian minority Sovereign Power and the right-wing Alliance of Young Latvians (12%). Three other parties passed the 5% threshold: the conservative National Alliance (9%), the green-leftist Progressives (8%) and the centre-right New Unity (6.4%).

Kulbergs became Prime Minister in May after replacing Evika Siliņa, who resigned following a national security crisis and the collapse of her ruling coalition. The ruling bloc behind the first Kulbergs Cabinet was supported by the United List, the National Alliance, Siliņa’s New Unity and the now extra-parliamentary Union of Greens and Farmers (ZZS).

Since United List has fallen short of an outright majority, the result suggests it will lead a prospective conservative/right-of-centre coalition also featuring the National Alliance and New Unity. While forming an alliance with one of these two formations would be enough to form a slight majority, Kulbergs will likely aim for maintaining the current ruling bloc and a stable parliamentary majority of 58 of the MPs. Aretera expects swift coalition talks that will likely include both New Unity and the National Alliance as coalition partners.

A United List-led government will likely focus on national security and continued military support for Ukraine as its core foreign policy foundations. Domestically, Kulbergs has promised a business-oriented approach to revitalizing the economy by restructuring public finances, cutting bureaucratic red tape and improving regional development infrastructure.

Looking ahead, the primary challenge for the new ruling bloc is to ensure political stability as Latvian governments are historically short-lived, while next year’s Presidential elections could also test the stability of the incoming coalition.

Following the formation of Hungary’s new government in May, Prime Minister Péter Magyar and his cabinet – supported by the ruling Respect and Freedom Party (TISZA) and its two-thirds (constitutional) majority in parliament – have implemented a series of legislative and policy changes. These initiatives have primarily been aimed at implementing constitutional and institutional reforms, redefining Hungary’s relations with the EU and securing the previously blocked EU funds. In August, parliament marked the 100-day milestone since the election by voting in András Baka, a former Chief Justice of Hungary’s Supreme Court, as Hungary’s new President. Baka is expected to be a transitional head of state, with a wider public consultation process to follow to prepare Hungary’s new constitution.

Five months after the parliamentary elections, Hungary’s party politics has consolidated into a three-party system dominated by the ruling party and two opposition formations: Viktor Orbán’s formerly ruling Fidesz-KDNP bloc and the nationalist opposition Our Homeland. Support for TISZA remains high (around 60-65% among decided voters), while Fidesz has lost nearly half of its voters since the election, with Our Homeland openly aiming to become the lead opposition formation.

The first 100 days have shown that the new cabinet is putting compliance first. There is now an increased emphasis on compliance with EU law and regulations and a greater level of EU alignment (as suggested by Hungary’s rule-of-law and transparency reforms). The government has shown a higher degree of openness for public consultation but is also committed to stricter enforcement. Following the initial constitutional and institutional reforms, the government’s focus is expected to shift to a more regulatory-driven agenda, as suggested by the autumn legislative plan.

The cabinet is preparing to introduce draft legislation covering several policy areas, including online safety, climate protection, renewable energy use, addressing the gender pay gap, platform workers, food retail oversight, railway infrastructure development, nuclear energy, tackling disinformation, as well as digital infrastructure and governance development and the establishment of a new environmental authority.

This memo is an updated version of an earlier insight piece originally published on 13th August. The original version is available here.

Photo: MTI Hungary

On 30^th July, Hungarian Prime Minister Péter Magyar issued an extraordinary announcement warning the public about the risk of an energy crisis. Magyar revealed that the 44-year-old Paks Nuclear Power Plant, the country’s sole NPP which is currently operating at nearly half of its nominal capacity, will completely halt all energy production from 4-5^th August. This unprecedented measure is driven by the record low levels of the Danube River, severely hindering Paks’ operations. According to the PM, the river has dropped to an historic low of -121 centimetres at Paks, drastically below the previous record of -97 centimetres in 2018.

Meteorological forecasts indicate the water level will continue to drop, meaning the facility will not be able to restart in the short term. As a result, 2,000 megawatts of daily capacity will fall out of Hungary’s domestic energy production by 3^rd August, in a country where the average daily summertime consumption is at around 6,000-7,000 megawatts. The government is facing further pressure as the gas-fired Dunamenti Power Plant, which produces an additional 400 megawatts, has also shut down due to malfunction, but is expected to be fully operational by 2^nd August.

This drop in supply comes at a challenging moment as the worsening heatwave is driving up electricity demand among both residential and public consumers. While a full shutdown of the plant has never happened before, Magyar reassured citizens that this itself does not constitute a safety emergency, emphasizing that all procedures are being carried out with maximum security and in partnership with the responsible authorities.

To further mitigate the crisis, unnecessary energy consumption is being reduced in government buildings, while Parliament’s 3-4^th August sessions will be postponed. The PM also urged citizens to schedule heavy electricity usage (such as charging electric vehicles and air conditioning) outside the 5:00 PM to 10:00 PM peak window. Officials noted that this responsible, self-limiting behaviour from both residential and corporate consumers is critical to maintain the functioning of the national energy grid.

Regarding the private sector, this capacity shortage requires an immediate response from the most energy-intensive industrial players. To alleviate strain on the national grid, the PM has appealed directly to major corporate consumers to make operational sacrifices. Specifically, he requested that large-scale battery factories, chemical plants and automotive manufacturing facilities voluntarily shut down their operations to help the country navigate the potential shortage.

At the same time, Magyar noted that the government has started crafting legislation “to be able to intervene, even on a mandatory basis, with the scheduled, temporary disconnection of certain large consumers in order to preserve the country’s energy security.” For businesses, this entails a direct regulatory risk if the current energy shortage transforms into a full-scale crisis. On 31^st July, the PM said the government will review the energy consumption of large consumers, which could signal further changes.

Law and Justice (PiS), Poland’s largest opposition party, is facing its most serious internal challenge after 40 MPs left the party’s parliamentary group following a dispute between former Polish Prime Minister Mateusz Morawiecki and longtime PiS leader Jarosław Kaczyński over Development Plus, an internal platform created by Morawiecki. While the group was created to broaden the PiS voter base with moderate, economically driven voters, PiS’ leadership saw it as a direct challenge and insisted on its dissolution, which Morawiecki and his supporters rejected. As a result, 40 MPs left the PiS parliamentary group on 29^th July, cementing the new political platform and triggering the largest split in PiS’ history. The event also marks the most significant challenge yet to Kaczyński’s leadership of PiS.

As a new parliamentary group, Development Plus will have its own organizational resources and representation and will seek a revised allocation of committee positions in the 460-seat Sejm (lower house). The group could therefore become an autonomous parliamentary actor even before establishing a political party, which has not yet been determined. PiS will no longer be the largest parliamentary group, ceding this position to Prime Minister Tusk’s senior coalition KO, while Development Plus itself will immediately become the third largest parliamentary formation.

Development Plus is now expected to create a separate political party to participate in the 2027 elections. The parliamentary group will have immediate visibility, but will need local structures, financing, candidates and a program sufficiently distinct from both PiS and Tusk’s Civic Coalition. The upcoming months will be crucial in deciding whether the party’s parliamentary performance will turn into an adequate level of public support as PiS is competing with an increasing number of formations to attract conservative and right-wing voters ahead of the next election.

Lithuania’s new coalition government has officially been sworn into office. Led by former Economy Minister and acting Mayor of the Jonava district Mindaugas Sinkevičius, the cabinet is supported by the Lithuanian Social Democratic Party (LSDP), the green-conservative Farmers and Greens Union and the centre-left Democrats “For Lithuania”. The political shake-up comes after the senior coalition LSDP moved to expel the populist Dawn of Nemunas over a series of disagreements, replacing the party with the Democrats to maintain a majority in parliament. The new ruling bloc controls 75 of the 141 seats in the Seimas, the country’s unicameral legislature.

The new cabinet will include 14 ministers. Six have kept their positions from the previous government, including those responsible for foreign policy, defence, justice, communications, education and science, as well as economy and innovation. Accordingly, the ministries for interior affairs, finance, social security, health, energy, culture, environment and agriculture were all assigned new leadership.  The LSDP will control seven of the 14 ministries, while former Prime Minister Inga Ruginienė will return as Social Security & Labour Minister.

In line with the coalition agreement signed in June and the government program approved by parliament on 14^th July, the new cabinet will maintain the overall directions set by the senior coalition LSDP, with a higher focus on defence. The program is focused on 14 main priorities, including external challenges, economic growth, family policy, prices and incomes, education, health, transport, energy, public safety, agriculture, environmental protection, culture, regional policy and local self-government.

The most immediate impact could be a potential end to political instability. The cabinet sworn in on 14^th July is the third government installed since the October 2024 parliamentary elections. The reconfiguration of the ruling bloc could offer a fresh start to the centre-left, however the results of the mid-term course adjustment are yet to be seen. And the nearest official check will come in March 2027 during local elections.