The Baltic Barometer is BISC’s flagship publication: a quarterly report on security, opportunity and risk in the Baltic states. Each edition takes a pressing financial, economic or security question from across the region and answers it with timely, succinct analysis. The series is edited by Christopher Butler Research Fellow Caspar Schulze.

No longer an energy island

The first edition of the Baltic Barometer challenged the belief that international investors are spooked by the region’s proximity to Russia. This second edition confronts another misconception: that Estonia, Latvia and Lithuania remain a vulnerable energy island on Europe’s margin. That picture is out of date.

• Once a vulnerable energy island, the Baltic states have since 2014 built diversified, resilient energy systems, increasingly integrated with global, continental and regional markets.
• The Gulf crisis has tested and vindicated this transformation.
• One of Europe’s fastest renewable expansions shields Baltic consumers from rising global gas prices. Transport, heating and some industries remain vulnerable.
• Better energy storage and deeper interconnection will broaden this price shield. Further electrification will also reduce dependency on fossil-fuel imports.
• Pooling expertise and resources could make emerging technologies such as small modular reactors another pillar of Baltic energy security.

What borrowing costs tell us about the Baltic states’ security

The first edition highlights the Baltic states’ low borrowing costs (the three countries’ bonds trade roughly at the same level as France’s) and the potential for even stronger financial performance if local capital markets are developed further.

• Contrary to some expectations, financial markets apply only a small geopolitical risk premium to the B3 (Lithuania, Latvia and Estonia).
• Low sovereign borrowing costs reflect Baltic strength.
• Corporate bank credit remains expensive, but alternatives such as Nasdaq Baltic’s corporate bond market are emerging.
• Nor is there an “investment freeze”. Existing foreign investors are reinvesting at scale, particularly in Lithuania.
• Baltic venture capital ecosystems are amongst the most dynamic in Europe. Expanding domestic scale capital and exit pathways would boost them further.
• Equity markets remain constrained by their classification as an “advanced frontier market”.
• A coordinated regional push for “emerging market” standing could accelerate institutional capital inflows, support scale-ups, cut bank lending costs and strengthen resilience.

The third Baltic Barometer, on defence technology, rounds out 2026. It will challenge another cliché: the idea of the Baltic states as defence minnows.

For further information, including regarding potential sponsorship of future editions, write to us at barometer@securebaltics.org.