Latvia Voters May Dissolve Parliament
Latvians will probably vote to dissolve parliament in a referendum tomorrow as part of a campaign to crack down on corruption that may strengthen Prime Minister Valdis Dombrovskis’ deficit-cutting government.
Opinion polls show that close to 80 percent of Latvians support former President Valdis Zatlers’ call to dismiss lawmakers after they refused to lift the immunity of a legislator targeted by a corruption probe. Passage of the referendum will set up parliamentary elections on Sept. 17.
Zatlers and Dombrovskis are seeking to weaken businessmen who got rich and gained political influence when the Baltic nation sold state assets after the Soviet Union collapsed. Zatlers in May warned of attempts to “privatize democracy” as he named three politicians as oligarchs who he said influence policy and may secretly own companies.
“If we show that the parliament can be easily kicked out, the next time they will think twice,” said Ksenija Sahova, a 25-year-old copywriter in Riga, referring to lawmakers.
Dombrovskis, 39, marshaled a deficit-cutting package equal to 16 percent of gross domestic product after Latvia turned to the European Union and International Monetary Fund for a 7.5 billion-euro ($10.6 billion) bailout in 2008. Latvia needs to find another 110 million lati ($202 million) of savings to meet its pledge to bring the budget deficit below the EU limit of 3 percent of GDP next year from 7.6 percent in 2010 and qualify for euro adoption in 2014.
Dombrovskis ‘Ticket’
Dombrovskis’ experience with international lenders is his “ticket” to lead the next government, said Aigars Freimanis, a director of Latvijas Fakti, a Latvian research company.
“There is no political force ready to take the risk and talk to the lenders without Dombrovskis,” Freimanis said.
Eighty percent of Latvians support the referendum, according to an Internet poll of 900 people conducted by TNS Latvia and published June 2. TNS didn’t provide a margin of error. A similar proportion, 79 percent, backed Zatlers in a poll of 1,002 people conducted June 10-19 by Latvijas Fakti.
Zatlers, 56, called the referendum on May 28, naming lawmakers Ainars Slesers and Andris Skele, as well as Aivars Lembergs, mayor of the port city of Ventspils, as oligarchs. All three have denied any wrongdoing.
Five days later Zatlers lost his bid for re-election as lawmakers voted 53-41 in favor of Andris Berzins, a 66-year-old former banker. Berzins, backed by Lembergs’ Union of Greens & Farmers, was greeted by protesters after the ballot.
Ending Oligarch Control
Skele, a two-time prime minister, abolished his People’s Party after Zatlers called the referendum. Slesers’ Latvia First Party/Latvian Way is unlikely to garner the 5 percent vote needed to win seats in the next parliament, opinion polls show.
“A main goal of the elections will be to ensure that oligarchs, and the parties supporting oligarchs, do not control a majority in the next parliament,” Dombrovskis said July 21 in an interview at Bloomberg’s offices in New York. “If this will happen, then I would say the former president’s initiative of dissolving the parliament will pay off.”
The issue of oligarch influence goes deeper than the three men named by Zatlers, former President Vaira Vike-Freiberga said today in an interview with Latvian Independent Television, according to the Leta news service.
“I think we have many more wealthy people who are directly or indirectly involved in politics,” Vike-Freiberga said. “And not all of them are Latvians by nationality.”
Government Reshuffle
New elections would probably reshuffle the governing coalition, which currently consists of Dombrovskis’ Unity Party, with 33 seats in the 100-member legislature, and Lembergs’ Greens & Farmers, with 22.
That may threaten Dombrovskis’ government because voters who supported the oligarch-led parties probably won’t back Dombrovskis, said Dzintars Zakis, head of the Unity faction in parliament. While Zatlers plans to create a new party for the September elections, it is likely to pull support from Dombrovskis, Zakis said.
The situation would keep Latvia’s economic program “unpredictable and dangerous,” he said.
Harmony Center, which represents Russian speakers who make up almost a third of Latvia’s population, was backed by 18.1 percent of those surveyed in the June 10-19 poll by Latvijas Fakti. Unity ranked second with 14.7 percent, followed by Greens & Farmers at 10.5 percent and the For Fatherland/All for Latvia coalition at 8.8 percent.
Democratic Boost
The referendum is positive for Latvia because it will help develop the country’s democracy, said Toms Silins, vice-chairman of the Foreign Investor Council in Latvia, which represents 25 companies, including the local units of Statoil ASA, Ernst & Young LPP and Volvo AB.
“We would like to see less corruption,” Silins said.
Zatlers, who will officially form his Reform Party tomorrow, said in a phone interview that he plans to nominate his own candidate for prime minister if the party wins seats in parliament. The former president said he’s prepared to form a government with any parties that prove they aren’t linked to the oligarchs.
“We will do our best to end the oligarchs’ power in Latvia,” he said.
To contact the reporter on this story: Kira Savcenko in London at ksavcenko@bloomberg.net
To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net
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