Rail Baltica and the Provision of European Public Goods: Latvia between Governance, Asymmetry, and Security in the Baltic States

This policy paper analyses Rail Baltica as a European public good in the context of fiscal fragmentation and heightened geopolitical uncertainty. Designed to connect Estonia, Latvia, and Lithuania to the European standard-gauge railway network, Rail Baltica is embedded within the EU’s Trans-European Transport Network framework and supported by the Connecting Europe Facility. However, its implementation reveals structural tensions between supranational strategic objectives and nationally retained financial responsibility. The paper argues that Rail Baltica represents an incomplete European public good: while its benefits are transnational and its rationale European, governance and fiscal risks remain unevenly distributed. Cost escalation and delays are shown to stem not only from technical factors, but from hybrid governance arrangements and spatial asymmetries along the corridor. Particular attention is given to Latvia, whose geographic centrality and infrastructural complexity make it a pivotal actor in the project’s success. Rail Baltica thus offers a critical test of the European Union’s capacity to deliver strategic infrastructure integration in peripheral and security-sensitive regions.

Key Words: Rail Baltica; Latvia; Baltic States; European Union; Transport Policy; Infrastructure; Economic Development; Regional Development; Infrastructure Investment; Cross Border Connectivity; Sustainable Mobility; Rail Infrastructure