Paalzow's statement follows a decision by Latvian government ministers not to renew the term of SSE Riga current rector.
"We are currently heading towards opening up a discussion with the Ministry of Education and Science and intend to find a solution that observes the relevant Latvian legislation as well as the relevant EU directives," said Paalzow.
"However, my understanding of Latvian language and politics is good enough to see that the School is being used as a tool in a political game that has nothing do with the School and the appointment of its rector," he said.
Earlier on Friday the Foreign Investors' Council of Latvia (FICIL) released a statement expressing alarm over the possibility that Paalzow will not be reappointed.
"This decision is incomprehensible and inconsistent with the statements and aims to develop the Latvian higher education system as a center of excellence, an export opportunity and a magnate for global and local talent attraction," it says.
FICIL was joined by the Latvian Chamber of Commerce and Industry, the American Chamber of Commerce in Latvia, and others in expressing worry about the situation.
On Thursday however Education Minister Kārlis Šadurskis (Unity) presented his ministry's view, saying that "Latvian is not just for the kitchen" and said that, previously, Paalzow had been appointed only temporarily.
"When the SSE rector was appointed for the previous term there was a clause saying that the regulation [concerning his appointment] is temporary and until the rector can carry out his responsibilities in the official language he will have translation available," Šadurskis told LTV.
Cabinet of Ministers rules list having a mastery of the Latvian language (C1) as a requirement to be eligible to serve as a rector.
The American Chamber of Commerce has suggested to extend the requirement to allow all EU languages.
According to SSE Riga website, the learning institution has not received official confirmation from the Education Ministry that Paalzow will not be reappointed as rector.
Paalzow has been at the institution since 1999.
LSM reported on the affair which also involved a decision not to appoint a new rector of the Riga Graduate School of Law, on January 24.