The Latvian parliamentary election
A majority for the ruling coalition government
Added on October 4, 2010 in Riga at 15:12 local time
Prime Minister Dombrovskis was
awarded for his tough austerity program, staying on a solid course instead
of falling into a populist one. There were discussions going on within Unity
to include the oppositional Harmony Centre party with its 29 members of
parliament in a new coalition government. But as the Office of the prime
minister confirmed to us today, Harmony will only be offered a special
cooperation agreement. A first round of talks between the coalition and
Harmony took place this morning. As reported yesterday (below), the
continuation of the present coalition has been decided. It will consist of
Unity, Greens and Farmers (with the shady populist Lembergs) and Fatherland
and Freedom, associated during the election campaign with the far-right All
For Latvia party [correction at 18:40: All For Latvia will be part of the
coalition government]. Prime Minister Dombrovkis said he will ask parliament
to confirm the new government on November 2, 2010 the first working day of
the newly elected Saeima.
For A Good Latvia (made up of the People's Party and the right-wing Latvia's
First Party) with its 8 parliamentarians will not be part of the coalition.
The People's Party left the government in March 2010, with four of its
ministers quitting (only Minister Dalderis stayed on, leaving his party).
Many voters consider the People's Party's leaders the main culprits for the
present economic crisis. Some of them represented incompetence and
corruption and deserved to be punished at the polls. But as with the crisis
in the US, many Latvians were simply living above their means and should
also blame themselves.
Article added on October 3, 2010 in Riga at 20:15 local time
Latvian governments and political parties are unstable.
Since Latvia declared its
independence from the Soviet Union on August 21, 1991 the country has known
fifteen governments and the creation and disappearance of numerous political
parties and electoral alliances.
The Harmony Center (Saskanas
Centrs) has roots that go way back to the times
of Janis Jurkans (check the end of my
2005-interview with the then-president Vike-Freiberga), the first
Latvian minister of foreign affairs from 1990 to 1992. It is the only major
Russian friendly party; Russians make up some 28% and Belarusians 3.6% of
the population of Latvia. But its leader, Jānis Urbanovičs
(*1959), is ethnically Latvian.
The party considers itself multiethnic, social-democratic, in favor of a
progressive income tax, better relations between Latvians and Russians in
Latvia as well as with Russia.
Since July 2009, the Mayor of Riga is from the Harmony Center: the Russian Nils Usakovs or Nil Ushakov (*1976).
The Latvian capital
with its over 700,000 inhabitants counts for roughly one third of the
country's population. This major conquest by Harmony seemed to foreshadow a possible
breakthrough in the 2010 parliamentary election. Despite being untainted
by the economic disaster - because never part of the government - the
Harmony Center finished only second in the 2010 parliamentary election, with
25.7%, roughly 251,000 votes and 29 seats.
The first place in the election belongs to the other major party alliance: Unity (Vienotība).
Established on March 6, 2010 this center-right alliance of Prime
Minister Valdis Dombrovskis (*1971) and his New Era Party (Jaunais Laiks), the Civic Union and the
Society for Other Politics garnered some
30.7%, roughly 300,000 votes and 33 seats.
The New Era Party considers itself a rampant against the oligarchs in the
smaller parties, but they already comprised in the ruling coalition. In
addition to ministers of the Civic Union, the For Fatherland and
Freedom / LNNK party and the People's Party, the New Era Party had members
of the Union of Greens and Farmers (ZZS) accepted in its present five-party
The Greens and Farmers Union is largely influenced (if not simply run) by
Aivars Lembergs, the Ventspils mayor and businessman who allegedly has used
his political status for personal gains. He has been charged with bribery,
fraud, corruption and money laundering. But since under his rule, Ventspils
has been transformed from a dull Russian oil transit port into a more
elegant city, Lembergs can get away with almost anything in his stronghold.
In the 2010 parliamentary election, the Union of Greens and Farmers won some
190,000 votes, 19.4% nationwide and 22 seats, establishing the ZZS as
Latvia's third largest party. The Unity alliance cannot rule without the ZZS
and Lembergs, unless it stretches its hands out to the oppositional Harmony
Center. In fact, already today, on Sunday, October 3, Unity and the Greens
and Farmers Union have agreed to further cooperate in the 10th Saeima. The
continuation of the present government seems only to be a formality.
Latvian sheet music.
Today's deals at Amazon.com. -
Latvian sheet music.
In addition to the three parties and electoral alliances mentioned above,
only two other parties managed to win seats in parliament, passing the 5%
threshold of the popular vote:
For A Good Latvia (Par Labu Latviju!), initially called
A² after its two strongmen, Ainārs
lesers and Andris ķēle (the 1998-founder of the
People's Party), won 7.55%, some 74,000 votes and 8 seats. The party unites
two oligarchs with a shady reputation.
The Party For Fatherland and Freedom, a partner in the current ruling
coalition, run together with the ultra-nationalists from All For
Latvia (Visu Latvijai!). Together, they won 7.55%, some 74,000 votes
and 8 seats.
According to the Central Election Commission, some 934,000 people or 62.2%
of all eligible voters went to the polls on October 2, 2010 to elect the 100
parliamentarians to the unicameral Latvian parliament (Saeima).
Prime Minister since March 2009, Valdis Dombrovskis, described as a dour
physicists and mathematician, had no choice but to implement a painful
austerity program agreed to at the end of 2008 in connection with the 7,5
billion euro rescue package led by the International Monetary Fund (IMF) and
the European Union (EU). The Harmony Center railed against the IMF and
the EU, but had not alternative to offer to avoid bankruptcy. Many voters
seemed to have realized this.
In 2009, Latvia experienced the EU's deepest recession with a fall of GDP of
18%. In 2010, a stabilization seems in sight with a further fall of
only 2% of GDP predicted. People had been living on credit for years, fueled
by a massive real estate bubble. I met several students who had bought flats
in Soviet style tenements at high prices. It was unsustainable.
Before the crisis struck, even the tourist magazine Riga in Your Pocket
mentioned that Latvians were spending money as if there was no tomorrow.
The financial and economic crisis made the unemployment rate shoot up from
7.5% in 2008 to 17,1% in 2009 and to 20.4% in the first quarter of 2010. In
the second quarter of 2010, unemployment fell to 19.4%.
Since the adoption of the bailout in late 2008, the state has cut spending
by 14%. Public workers had to accept pay cuts of up to 50%. Taxes had to be
raised. Public transport is more expensive. Hospitals and schools had to be
closed. Social benefits were reduced. Latvia's second largest bank, Parex
Banka, had to be nationalized. The budget deficit, targeted at 8.5% in 2010,
will have to be cut to 6% in 2011 and to 3% (the Maastricht criteria) in
2012. The adoption of the euro scheduled in 2014 seems to be a far-away
goal. More spending cuts and tax rises lie ahead.
Latvia's other big problem is that the country has no notable export sector.
There are no Latvian products competitive on the world market. But Latvia
offers advantages: it is part of the EU, with the lowest wages within the
EU [correction on October 4, 2010: lowest wages before countries such as Romania and Bulgaria
joined the EU, but still among the lowest], but with skilled workers. In
short, an interesting place for foreign investments as soon as there are a stable government and a stabilized