Race is on for September election

RIGA - Latvians may end up with a new prime minister to lead the country’s deficit-cutting efforts in government after a weekend referendum dissolved parliament and propelled a new-to-the-scene political party to the top of opinion polls, reports Bloomberg. Deficit-cutting, though, is only half the battle, as any new government needs to come up with a viable economic growth and development plan too.

Almost 95 percent of voters on July 23 backed former President Valdis Zatlers’ call to dismiss lawmakers as part of an anti-corruption drive. The wave that swept away parliament drove Zatlers’ own Reform Party, founded in June, into a first-place tie with the pro-Russian and Moscow-influenced Harmony Center in opinion polls, followed by Prime Minister Valdis Dombrovskis’ Unity party.

Zatlers and Dombrovskis are seeking to weaken the so-called oligarchs, and others of the wealthy elite in Latvia, who amassed wealth and power as the Baltic nation sold state assets after the Soviet Union collapsed.
The former president, who has endorsed Dombrovskis’ austerity policies, has said he wants to nominate his own candidate for prime minister after the Sept. 17 general election.

“The referendum results will demonstrate not only the people’s attitude toward parliament, but will also show support for Zatlers and his party,” Aigars Freimanis, the director at the Latvijas Fakti research company, said before the results were released. “It is possible that Dombrovskis won’t get the prime minister’s position again.”
The Reform Party and Harmony Center, which represents Russian speakers who make up almost a third of Latvia’s population, were each backed by 17.5 percent of those surveyed in a Latvijas Fakti poll published July 22 by the Baltic News Service. Unity ranked third at 11.7 percent, down from 14.7 percent in June.

Unity expects to join the Reform Party in the next government and wants to continue its policy of cutting the budget deficit while keeping so-called oligarchs out of power, said Defense Minister Artis Pabriks, a party board member.
Dombrovskis helped implement austerity measures equal to 16 percent of gross domestic product after Latvia turned to the European Union and IMF for a 7.5 billion euro bailout loan package in 2008.

Unity and Reform probably won’t get the necessary 51 seats in the 100-member parliament to form a government, forcing them to include the “relatively radical” National Alliance or Harmony Center in a coalition, Pabriks said.
“The government won’t have a choice but to form a coalition with nationalist forces,” because the differences with Harmony Center over the assessment of Latvia’s Soviet-era past may be impossible to bridge, he said. That may be “risky as nobody can predict whether they will stick to their radical views or become moderate.”

The Union of Greens & Farmers, led by Ventspils Mayor Aivars Lembergs, one of three men Zatlers named as oligarchs when calling the referendum on May 28, was supported by 8.1 percent of the 1,000 people surveyed by Latvijas Fakti this month, followed by the National Alliance at 6.3 percent.
Latvia needs to find an additional 110 million lats (157 million euros) of savings to meet its pledge to bring the budget deficit below the EU limit of 3 percent of GDP next year, compared with 7.6 percent in 2010, and qualify for euro adoption in 2014, Dombrovskis said July 6.

The government’s deficit-cutting program is evidence of either the “silliness” or the “guile” of international lenders, Janis Urbanovics, the head of Harmony Center’s parliamentary group, said by phone on July 24.
Economists who claim the Latvian economy is stable are “enemies or simply incompetent,” Urbanovics said. Exhibiting, however, his own lack of understanding of the bailout process, or of how Latvia should pursue a realistic economic growth strategy, he continued by saying that the country should alter its IMF program, and pursue closer cooperation with Russia.
The next government may revolve around the personality of Zatlers, 56, whose lack of experience may be a risk for the next government, according to Ivars Ijabs, a political analyst at the University of Latvia. The former president was a surgeon before he was called to the presidency by the defunct People’s Party four years ago, when he was allied with politicians such as Lembergs, one of Latvia’s so-called oligarchs.

“People who backed Zatlers at the referendum hope that he is kind of a knight on a white horse who will change their lives forever,” Ijabs said by phone yesterday. “He won’t - and that scares me.”
Zatlers has, however, changed lives forever in Latvia, with his dramatic May 28 decision to call for the referendum. It’s now up to the people in Latvia, both ethnic Latvians and Russians, to work cohesively and forcefully to follow through by keeping the pressure on a new government to ensure it works transparently and for the good of the nation, not the politicians.