Wednesday

27th Jul 2016

Latvian turmoil will not affect government, MEPs say

  • President Zatlers dissolved the legislature for blocking a graft probe (Photo: Latvian President's office)

The Latvian government will not be affected by the decision of the country's president to dissolve the parliament for having refused to allow a corruption probe into the dealings of one of its members, two MEPs told this website.

"The government will remain in position, it is not affected by this. As for the IMF and EU requirements, we are in conformity with everything and the credit ratings are going up," said Inese Vaidere, an MEP from the ruling centre-right Civic Union.

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Calling the Latvian president's move "historic" and "statesman-worthy", Vaidere argued that the national legislature can only back electoral and party financing reforms when confronted with a crisis such as the current one.

It is the first time in the history of independent Latvia that the president has used his power to dissolve the parliament, elected only seven months ago. The decision needs to be confirmed in a referendum likely to take place in July.

Meanwhile, presidential elections are due on 4 June prompting some critics to say that President Valdis Zatlers' motives are purely electoral to get himself re-elected again.

Ainars Slesers, the MP targeted by the prosecutors' anti-corruption probe, on Monday said he would not step down and claimed the move was aimed at giving Zatlers, a surgeon and independent candidate, the platform for his own political party.

However, if the referendum turns negative, even if re-elected, Zatlers would have to step down.

"This gives another chance for the electorate to see who's who. A lot of people don't consider corruption and oligarchs controlling policy-making such a big problem. But it is. Investments are slower, red tape is more cumbersome and this needs to change," says Krisjanis Karins, an MEP from the right-wing New Era party, also part of the coalition government.

As for the impact on the economy, both MEPs felt confident that there would not be any immediate negative consequences from the political turmoil.

"What can affect our country are any major economic developments in Portugal, Ireland and Greece - which would be a shock for Europe as a whole," Vaidere said.

Latvia has been on an EU-IMF lifeline of €7.5 billion since late 2008, with the IMF agreeing to disburse €121.3 million just two days before President Valdis Zatlers' decision to dissolve the parliament.

"Strong policy actions (...) have helped restore confidence, contributed to economic recovery, and enabled significant progress toward Latvia's goal of euro adoption," the IMF said in a press release.

Latvia had to stomach painful budgetary cuts following the financial and economic crisis. It was the hardest hit country in the EU. The economy contracted by over 10 percent and the unemployment rate topped 20 percent.

"We need a law on fiscal discipline to oblige all next governments to respect the three percent deficit threshold, so as to prevent situations like in 2008, when we suddenly discovered we were on the brink of bankruptcy," Vaidere stressed.

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