Latvia. The deep economic crisis and the severe budget
cuts hampered the government's cohesion. In March, oligarch
Andris Skele withdrew his party, the People's Party, from
the coalition. However, Prime Minister Valdis Dombrovskis
continued to rule in the minority and managed to remain in
office until the autumn parliamentary elections.
Before the election, Andris Skele and the People's Party
merged with another oligarch, Ainars Slesers, and his party.
Both had struggled with declining opinion figures and now
formed the party alliance For the Best of Latvia.
COUNTRYAAH, the Russian-dominated Social Democratic Party Harmonic
Center led the opinion and surprisingly looked to win the
election in October. But ethnic voting put a stop to it.
Many letters dissatisfied with the government's cuts did not
dare to vote for the Social Democratic opposition, for fear
of having a Russian-dominated government. They chose what
was seen as the least bad alternative by the
Latvian-dominated parties, Prime Minister Dombrovski's Unity
Dombrovskis himself received the most personal crossroads
in the election, a sign that despite his austerity, he had
confidence as a corrupt politician. The Unity Alliance won
the election by just over 31 percent of the vote. In second
place came the Harmonic Center with 26 percent. The League
of Green and Peasants gained close to 20 percent, while the
National Alliance and For the Best of Latvia had to settle
for just over seven percent each.
Prime Minister Dombrovski invited the Russian-dominated
Harmonic Center to talks on government cooperation. In doing
so, he broke a taboo in Latvian politics. But the Unity
Alliance was divided in the view of the Harmonic Center and
shortly after the invitation came conditions that the
Harmonic Center would recognize the Soviet empire in Latvia
as an occupation. The Harmonic Center refused, harsh words
were exchanged between the parties, and the conflict over
history made it impossible for a right-left coalition.
Instead, the National Alliance, dominated by the
extremist Nationalist Party for Latvia, would join the
government. But part of the disagreeable Unity Alliance
vetoed it, and Everything for Latvia was put aside. Prime
Minister Dombrovski's Unity Alliance then formed a
government with a single coalition party, the League of
Greens and Peasants, controlled by the corruption-accused
oligarch Aivars Lembergs.
The coalition gained a majority with 55 of Parliament's
100 seats. The day after the government took office, a
scandal erupted in which the new Foreign Minister Girts
Valdis Kristovskis was accused of having supported extremist
nationalist views, as one of the party's contributors in
exile expressed. The opposition demanded distrust, but
Kristovsky won the vote in parliament.
The deal weakened the government, whose ability to hold
together was questioned. The first political test was new
budget cuts and tax increases to keep the 2011 budget
deficit at a maximum of 6 percent, a condition of the
International Monetary Fund (IMF) and other international
After the GDP race of 18 percent the year before, the
economy hit the bottom at the beginning of the year and
turned up again in the second quarter. In the third quarter,
the economy grew by 2.7 percent compared to the same period
the year before. It was the first growth of its kind since
the financial crisis hit Latvia in its grip in 2008. Growth
increased the state's tax revenue, and the cuts did not have
to be as severe as feared. The government explained that the
international loan of € 7.5 billion did not need to be used
In December, President Valdis Zatlers made an official
visit to the Russian Federation, the first of a Latvian head
of state since 1994, when the Soviet military left Latvia.
The leaders of Moscow showed a willingness to increase trade
and improve political relations with Latvia. It was decided
on a joint history commission, which will discuss, among
other things, the differences in views on the Second World