Facebook Blogging

Edward Hugh has a lively and enjoyable Facebook community where he publishes frequent breaking news economics links and short updates. If you would like to receive these updates on a regular basis and join the debate please invite Edward as a friend by clicking the Facebook link at the top of the right sidebar.

Wednesday, February 4, 2009

Is Latvia still headed for an early election?

by Manuel Alvarez-Rivera, Puerto Rico

The economy is in crisis, and expected to decline by as much as ten percent this year. The coalition government's hold on power is shaky at best, following public protests that turned violent. An embattled cabinet minister tenders his resignation. This may all sound very familiar, and it should: recent developments in Latvia appear to be at times almost a blow-by-blow re-enactment of the events that took place in Iceland last month, which culminated in the collapse of that country's coalition government.

That said, the four-party coalition cabinet of Latvian Prime Minister Ivars Godmanis remains in power for the time being, having survived a parliamentary vote of confidence on February 4. Nonetheless, an early general election - one year ahead of schedule - remains a distinct possibility: last January, President Valdis Zatlers threatened to propose dissolving Latvia's unicameral parliament - the Saeima - by March 31 unless it passed constitutional amendments that would give voters the right to propose the dissolution of the legislature.

The President of Latvia is constitutionally entitled to propose the dissolution of the Saeima. A national referendum is then held on the proposal, and the Saeima is dissolved and fresh elections called if a majority of votes is cast in favor of dissolution; otherwise, the president is automatically removed from office, and the Saeima proceeds to elect a new president to serve for the remaining term of office of the removed head of state. If an early poll does indeed take place, it would be carried out under Latvia's relatively straightforward proportional representation system, reviewed in Elections to the Latvian Saeima (Parliament) (which also includes nationwide- and constituency-level results of the 1998, 2002 and 2006 parliamentary elections).

As in Iceland, there is widespread discontent with the political establishment, although that sentiment appears to run far deeper in Latvia: recent surveys indicate trust in government has fallen to its lowest levels since 1996 - only one in ten residents of Latvia is satisfied with the government's work - while a Latvijas Fakti poll taken last January shows that just two opposition parties - the pro-Russian Harmony Center and the populist New Era Party - stand above the five percent threshold required to secure parliamentary representation.

However, even if such an extreme outcome were to actually occur - the poll numbers were skewed by a very large number of respondents (fifty-four percent) that were undecided or indicated they wouldn't vote - it would be in keeping with persistent trends in Latvian post-independence electoral politics, in which every parliamentary election brings a different winner from the preceding vote, along with a wave of usually drastic changes in the party composition of the Saeima.

Governments in Latvia are usually short-lived - since regaining independence in 1991, the Baltic republic has had more than a dozen cabinets - in no small measure because of its constantly changing and fractious party system. From that perspective, the question may be not so much whether Prime Minister Godmanis will remain in power, but for how long.


As it was, the "how long" turned out to be an unexpectedly short reprieve: on February 20, Latvia's coalition government became the second casualty of the global financial crisis, after the People's Party and the Union of Greens and Farmers - the two largest parties in the government and the Saeima (Parliament) - announced they had lost confidence in Prime Minister Ivars Godmanis, and forced him to step down.

President Valdis Zatlers will start consultations with leaders from all political parties in Parliament on the formation of a new cabinet. However, the upcoming government will have to implement further unpopular measures to cope with the worsening economic situation, and an early election remains a distinct possibility.