Latvia happy with ties with Russia, but wary

RIGA (Reuters) - The Baltic state of Latvia is pleased ties with huge neighbor Russia are finally improving after years of tension, but it remains wary of Moscow's muscle flexing, President Valdis Zatlers said on Thursday.

Speaking in a Reuters interview at the presidential castle, which used to be the headquarters of Tsarist Russian governors, Zatlers said the European Union had to remain united in its relations with Moscow for the benefit of all.

"I am very pleased that relations in the last two years have improved, we have made big steps forward," said Zatlers, who took office in July, replacing the popular Vaira Vike-Freiberga, eastern Europe's first female president.

Russia's ties with Baltic neighbors Latvia and Estonia have often been tense since they and Lithuania regained their independence in 1991 after 50 years of Soviet rule.

The Baltic states cemented their westward drive by joining NATO and the European Union in 2004, but relations with Moscow have been hit by charges that Latvia and Estonia discriminate against their large Russian-speaking minorities. Both deny this.

Russian relations with Estonia sank further when it removed a World War Two Red Army statue.

Zatlers noted that, after years of negotiations, Latvia had finally concluded a border treaty with Russia, which has now been ratified by the parliaments of both countries.

But he said Latvia remained wary, pointing to renewed flights by Russia of long-range bombers and arguments over Moscow's withdrawal from the Cold War-era Conventional Forces in Europe (CFE) treaty.

Though Zatlers said no European country would these days see another as an enemy, he added: "At the same time we see Russian bombers flying and we ask the question why, what are the goals and the targets? Because we expect peaceful development in our region.

"I would say the latest actions from Russia have lowered the level of confidence, and confidence is a very key word in keeping the region safe. And confidence in each other is the greatest value that people have."

Some observers see Russia's stance on the CFE treaty as retaliation for a U.S. plan for a missile shield in Europe, although Russian officials play down a link.

Moscow says the 1990 treaty is outdated and imposes restrictions on its troop movements within its own borders while allowing NATO free rein to build up its forces.

Zatlers said his people's confidence in the EU was linked to how the bloc handled relations with Russia. He noted that a united stance at an EU-Russia summit in Samara in May had led to a rise in popularity of the EU in Latvia.

"You have to understand that the only way to deal with a big partner is to be united," he said.