Dombrovskis gets green light

RIGA - The newly elected parliament, the 10th Saeima, held its inaugural plenary session on Nov. 2, where President Valdis Zatlers officially nominated current Prime Minister Valdis Dombrovskis (Unity-New Era) to head the next government, reports news agency LETA. Approval for Dombrovskis and his new Cabinet, composed of seven ministers from Unity and six from the Greens/Farmers, came on Nov. 3 in an emergency Saeima session, with 98 votes cast, 63 votes for, and 35 against.

Approval of the new government came none too soon for some. Watching from the sidelines, the drawn-out talks since the election over the formation of Latvia’s new ruling coalition is an alarming signal, said Danske Bank chief analyst Lars Christensen. “The political situation in Latvia has become less rosy than we had initially expected,” commented Christensen.

Danske Bank analysts previously commented on the Latvian election results as a convincing endorsement of Dombrovskis’ government, however, giving a strong positive signal to the markets.
Nonetheless, Christensen expressed concern that the drawn-out process of creating a new government could create nervousness and risk, and have a negative influence on the development of consolidation measures for next year’s budget.

“Dombrovskis’ task in creating a new coalition government has turned out to be much more complicated than we initially expected. (..) Dombrovskis’ Unity and Lembergs’ Union of Greens and Farmers (ZZS) together have only a slight majority in the parliament,” said the analyst.

“Local commentators have also expressed doubts over Dombrovskis’ political abilities, and speculation is rising that the talks over the new coalition are being led by Lembergs, rather than Dombrovskis. In our view, Lembergs is a more populism-orientated politician than Dombrovskis, and his position of increasing power within the Union of Greens and Farmers could create doubts concerning the new government’s willingness to carry out reforms,” warns the analyst.
Dombrovskis, after meeting with Zatlers on Nov. 1, indicated that fundamental agreement had been reached between the coalition partners concerning the new Government Declaration, the terms of the coalition cooperation agreement, and the allocation of ministerial portfolios. Dombrovskis noted that Unity’s coalition partners, the Union of Greens and Farmers, were satisfied with the ministerial posts offered to them in the new Cabinet.

In a game of musical chairs, of the existing ZZS ministers, Agriculture Minister Janis Duklavs was nominated again, and Environment Minister Raimonds Vejonis is to head the new joint Environment/Regional Development Ministry. Welfare Minister Uldis Augulis has been selected for transport. Rolands Broks was nominated to head the education/science sector, Ilona Jursevska - welfare, Juris Barzdins - health.
Jursevska currently is the director of the Welfare Ministry’s Communications Department, while Barzdins is chief of staff at Liepaja Hospital.

Initially, ZZS was reportedly disgruntled at the allocation, saying that it too would like to head one of the “power” ministries - defense, interior or justice.
Unity will gain the Saeima speaker post, to be occupied by New Era leader Solvita Aboltina. Unity leader Girts Valdis Kristovskis, nominated to become foreign minister, promises to pay more attention to supporting Latvian entrepreneurs abroad, as well as attract investments for Latvia.

Kristovskis pointed out that Latvia must continue its current foreign policy course, as well as active participation within the European Union and NATO. Relations with regional neighbors are also a priority. According to him, there must be closer cooperation between the Baltic States, as well as with the United States.
Other Cabinet posts in the Dombrovskis government include former SEB Bank economist Andris Vilks for finance and Artis Kampars (New Era) has been chosen to remain in office as economy minister.

Unity nominated Society for a Different Politics’ Artis Pabriks as defense minister and Aigars Stokenbergs from the same party as justice minister. Interior Minister Linda Murniece (New Era) has been chosen to remain in office, but the Ministry of Culture will have a new leader - Sarmite Elerte (Civic Union).

Dombrovskis, with his new government, has pledged to work for Latvian national unity and growth. The new coalition pledges to create a Latvian society that is well-educated, healthy, well-nourished, with a secure future. The Declaration also expresses the desire to strengthen Latvia as a national, European and democratic state, characterized by good management, respect of human rights and basic freedoms, rule of law and social responsibility.

The government’s objective is for a progressive and sustainable Latvia which is the leader among the Baltic States in terms of quality of life, national development and global competitiveness. The new government will establish a policy of sustainable national development, the cornerstones of which will be structural reforms, the renewal and growth of Latvian industrial manufacturing, an efficient and internationally competitive system of higher education, and the principle of polycentric development.

“We will require the support of all of society, and the responsible action and cooperation of each Latvian resident. We are sure that in a world which has experienced a heavy economic crisis, great value will be attached to hard and honest work, people’s talent and imagination, and quality products and services. The recovery of the economy and the improvement of our standards of living are in our hands,” indicates the Declaration.
Discussing the work ahead, Aboltina admitted that a “tough job awaits this team,” and that advice and assistance will be necessary.