In 1990, Repse was among the youngest of the new generation of reformers and pragmatic nationalists who helped usher in Latvia's independence. At age 32, just after the Soviet demise, he was named chairman of the central bank, where he became one of the few constants in a political climate that saw some 10 governments come and go in as many years.
Repse was lauded at home and abroad for sticking to a strict monetary policy that kept inflation in check and led to the rebirth of the lat.
Last year, he stepped down as central bank chairman, created a new political party, and has set his sights on forming Latvia's next government and, he says, ridding Latvia of corruption.
You are a very popular figure and were one of Eastern Europe's most successful central bankers. Why did you want to give all that up for the topsy-turvy world of Latvian politics?
Having been a successful central banker, and having succeeded in forming a professional and honest team in the central bank that is continuing to carry on professionally and honestly after my leaving, I feel it is in good hands. The Bank of Latvia is indeed one of the success stories in modern Latvia.
The government could have been set up 10 years ago according to the same principles as the bank. In that case, the government would have been transparent, professional, honest. We would have avoided problems of corruption, bureaucracy, tax evasion, smuggling and increasing crime statistics.
We started in equal conditions at the same time. I took over the Soviet Gosbank branch with all its employees and complemented it with new professionals from outside.
Others took over the former Soviet Council of Ministers and rebuilt it into the Cabinet. The conditions were the same, but development differed substantially.
Today, Latvia needs change, Latvia needs an honest government at all levels, a professional government. We have done a lot of good things these past 10 years. We've ensured high GDP growth and miraculous development, especially when considering that World War II ended for us just 10 years ago.
But now we have to reconsider our attitude to public service, to fighting smuggling of drugs and other goods, and our overall attitude to transparency. We have to truly fight corruption to ensure a democratic country that serves its people. So that's why I decided its time to move into politics.
Second to you in popularity tend to be left-wing parties, particularly For Equal Rights, which did very well in Riga municipal elections last year. What do you make of their popularity, and does it bode ill for the future?
The popularity of that party I associate with a protest vote and a certain old-style electorate that is nostalgic for communist days. Some became disillusioned with the transition to a market economy and have not changed. They vote nostalgically and fail to remember communist propaganda, the KGB and their crimes, the queues for basic goods, the deficits, but they remember that bread was readily available at a very low price and that life was, more or less, secure no matter what you do.
They are well-prepared to be an opposition party, but they have no real chance to win a majority or of working with more modern forces.
A large percentage of their voters are Russian-speakers. Why doesn't your party try to attract some of these people who fed up with the existing political parties?
We definitely expect to attract support from modern-thinking Russians in Latvia. We have already felt their favorable attitude, and indeed, from the program we are offering, every Latvian resident, no matter Latvian or Russian, will benefit from a more stable economy, a more honest government.
You made headlines when you formed this party by saying you wanted political independence from outside sponsors and by asking for personal donations from voters. Did you expect this to raise controversy, and do you stand by what you did?
Yes, but I did expect this because the approach is new to Latvia. Everyone recognizes that politics requires lots of money. But until now, people prefer not to speak about that openly. They think secret financing, which is, unfortunately, the existing practice in our politics, is better.
I disagree. We want to do this openly. We publish our donations on the Internet. The openness is the novelty.
Given that Latvia is looking at certain unavoidable expenses related to the European Union and NATO, how can you possibly lower taxes and make good on these other promises?
A very serious problem here is tax evasion.
Is that because taxes, in your view, are too high?
Yes. Today, 95 percent of enterprises do not pay all their taxes. That's too many to dismiss as criminals. If that figure was 5 percent, then I would have said, 'OK, they are the few violators.' The way it is, I'd rather say something's wrong with the system.
Many businessmen have openly stated that if they paid all taxes honestly, they would go bankrupt, particularly because competitors are not paying all their taxes.
So first, we must fight nonpayment of taxes. Secondly, we should and could lower the taxes, then ensure universal collection. We can even do a redress system, saying we will repay excess taxes once we start receiving full payment of lowered taxes.
The current system is based on those few who pay all their taxes, and they end up paying for everyone. It's dishonest and counterproductive because it distorts the market.
NATO is also a high priority for you. Why is it essential for Latvia to join the alliance?
The very fact that Russia thinks it has anything to say about Latvian membership in any organization shows that membership is indeed truly necessary. It's necessary to ensure our safety and the overall security in Europe in the long run.
Russia still tends to think in categories of red lines, which is absurd. It's Cold War thinking. But at least some politicians in Russia are mentally drawing that red line around the west coast of the Baltics. As soon as we're members, that red line will either be dropped or drawn along the east border of the Baltics.
If your party does as well as you expect it to this fall, will you insist on being the next prime minister?
Not becoming the next prime minister would be a failure. Again, this all depends on voters, and if they really want us to change the way things are done here and their overall level of life, then vote for us and give us the job, free and clear. We'll accept it and do it. And to do it properly, we have to be at the heart of forming the government. In that case, I would have to be the prime minister.
Frankly, our being excluded (from the next government) does not look likely.
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