Latvia gets a new old government

By bne IntelliNews November 5, 2014

Mike Collier in Riga -


Latvia got a new government on November 5, following a month of inter-party wheeling and dealing after parliamentary elections on October 4. The net result of all the wrangling is that very little has changed – except a reduction in the government's chances of holding together in the long term.

Following a farcical first sitting of the new parliament on November 4, incumbent Prime Minister Laimdota Straujuma's proposed cabinet and action plan for the next four years was passed by 61 votes to 39 after a lengthy debate.

Straujuma originally came to power in January 2014 after her predecessor Valdis Dombrovskis – now a Vice President of the European Commission - stepped down. She now heads a coalition commanding a solid 61-seats in the 100-seat unicameral chamber.

Straujuma vowed in her address to parliament to concentrate on three main areas: national security, family welfare and economic growth. “I don't mean pedal to the metal growth, I mean smart growth,” she told MPs.

On security she stressed the need for Latvia to break its energy dependence on Russia, without mentioning it by name. "Security is also energy independence... these years are the time to increase our energy security," she said.

Straujuma's coalition comprises her own centre-right Unity party, the populist Greens and Farmers' Union (ZZS) and the rightwing nationalist National Alliance.

Despite winning more seats in the election than any other party in elections, the pro-Russian social democrat Harmony party will be condemned to opposition along with two newcomers – the Regional Alliance and Latvia From The Heart, with representatives of all three opposition parties criticising the government declaration as vaguely worded and lacking in costings and timings.

While many of the ministers in Straujuma's cabinet remain unchanged – including Foreign Minister Edgars Rinkevics – there are a handful of new arrivals, the most notable of which is Janis Reirs, who replaces Andris Vilks in the crucial position of finance minister.

Vilks won international respect for helping steer Latvia out of deep recession but has now quit politics entirely, saying he has become disillusioned with the process, even going so far as to suggest the real winner of the elections was Aivars Lembergs. Lembergs is the flamboyant and controversial mayor of the port city of Ventspils and kingpin of the ZZS, who can now happily throw his weight around to ensure government policy is kind to his vast business interests.

In all probability, Vilks will be proven right. Vilks was a successful finance minister and an honest if occasionally erratic politician. Reirs in contrast is a rather grey figure, who has recently been heading the parliamentary budget and finance committee. 

Vilks' loss is just the latest in a series of appalling gaffes by the Unity political party that is the core of the coalition.  For a start, many of its more capable ministers have either quit or gone to Brussels, including Dombrovskis and former defence and foreign minister Artis Pabriks.

Straujuma was only ever intended as temporary premier and ran a dreadful election campaign in which she took major flak over the perceived rush to complete the sale of state-owned Citadele bank to US investors Ripplewood Holdings (an announcement that the deal was signed was made within minutes of her confirmation). Even her ability to speak coherently has disintegrated and her performance in parliament on Wednesday, outlining her government's legislative proposals, was as if she was reading it for the first time.

When outgoing European Commissioner Andris Piebalgs announced he was joining Unity, many assumed he would lead the new government. He quickly scotched that idea, leaving Straujuma in a field of one. There's usually a very good reason when no-one else wants your job – it's either because you are so brilliant at it no-one wants to follow you (Dombrovskis) or because the job is a one way ticket to failure.

With the EC reining back Latvia's growth forecast for next year on November 4 from 4.2%  to 2.9% and citing the impact of the Ukraine crisis as a major contributory factor, with African Swine Fever on the verge of destroying the pork industry, with Russian sanctions squeezing the dairy industry, and with Russian planes and boats stalking the borders on a daily basis, there is a clear feeling things will get worse before they get better.

Unity had already blotted its copybook on Tuesday when it used the inaugural sitting of the Saeima as an excuse to railroad finding a seat for party bigwig Solvita Aboltina. Unity's voters made it perfectly clear at the ballot box that they did not want Aboltina in parliament (voters can give plus marks to candidates they like and cross out those they dislike on ballot papers) and she moved so far down the party list as a result that she lost her seat.

But then, immediately after swearing “to defend Latvia as an independent and democratic state, and to fulfil my duties honestly and conscientiously” to take up his seat, Unity deputy Janis Junkers immediately applied to resign, effectively handing his seat to Aboltina.

Confusion reigned as parliamentary committees considered Junkers' application to quit. The resumption of the parliamentary session was repeatedly delayed as members argued over the correct constitutional procedure until local radio journalist Ivo Leitans pointed out that Junkers' application had been handed in before the mandate had even come into force.

As a result, Junkers' application to quit was rejected - for a few hours - until he submitted a second request to leave the Saeima, which was eventually accepted.

It's not so long ago that Unity was promoting itself as the party occupying the moral high ground, but with its willingness to use such tawdry tricks it can now forget about that. Indeed, such an ingenious if craven scheme is worthy of Aivars Lembergs himself.

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