Monday, October 1, 2007

The test for president Zatlers integrity

The time of reckoning for Latvian incumbent president has arrived. The PM´s announcement about the international ring of spies and special commandos running Latvia caught president unawares. Whilst being asked about temporary suspension of the Anti Corruption agency (KNAB) head Aleksejs Loskutovs president was evasive in his response to journalists. The fast unravelling of events in Latvia did not leave much room for him to speak out, because he was on his trip to Big Apple to be part of the UNO General Assembly opening session. Now, when economy is in dire straits and political scandals erupt every day there is obvious concern about ability to continue with balanced development of society.

When president was elected then I predicted that the real test for Mr Zatlers presidency would be his ability to distance from the governing coalition. Until today there was nothing to contest in public affairs due to the relative calm of the vacation period. It was irresponsible for the PM to simply sleep on laurels and do absolutely nothing while seeing spiralling inflation throughout the summer, even more so considering the fact that he is by his training an economist (though the degree was received from the University of Agriculture). But it as irresponsible for the Latvian president now to show his surprise about the real state of business because the head of his chancellary is another economist Mr Eduards Stiprais.

We should see in upcoming months whether Latvian president would take an independent stance or simply would meddle through rough autumn of Latvian politics? I opt for president simply muddling through the autumn of Latvian political turmoil because he has no independent political backing, and due to the respect to governing coalition for his nomination after all. The fact that autumn would be rough come from all corners in Latvia. In the Latvian TV evening news tonight it was governor of the Bank of Latvia Ilmars Rimsevics who vicariously confirmed predictions about the imminent economic crisis. In his LIVE intervie Mr Rimsevics reiterated several times that the inflation expectations are out in the public, thus he called politicians to come to senses and not to build their political capital in spreading rumours about high annual inflation Latvia (probably referring to Mr Stokenbergs interview in Latvijas Avize today), and confirming that the Bank of Latvia predicted rate of annual inflation is just above 12%. While answering to the journalist's question whether there is devaluation of Latvian currency expected, the governor of the bank was resolutely negative: 'while I am the governor of the bank of Latvia there would be no devaluation of the lat!` The journalist then asked whether someone else might devalue the currency, because the mandate of the governor expires on December 30, 2007? The answer of Mr Rimsevics was court -`it is going to be the business of future governor of the Bank of Latvia.`

Clear and simple answers from the governor of the bank of Latvia still worries me in the context of present political developments in Latvia. Just seeing how irresponsible is the style of governance of the incumbeng cabinet and rubberstamping parliamentary majority I am not sure whether Ilmars Rimsevics mandate would be prolonged at the end of this year, or whether he is interested in sailing in the delapidated Ms Latvia. Analogy with the sailing ship unfortunately make me reckon that there are rats fleeing the ship already. Just, in the case with open and liberal economy these are not the gentelmen at helm but blue and white collar workers leaving the ship. If the coalition should fall due to the inability to agree on 2008 budget, then very serious thinking should be started about how to keep the falling pieces together. The energy prices shoot up today and Latvian housholds should see their utilitity bills increase by a third. Lets see the effects of Latvian public to contain the grudge and Latvian municipal authorities to help the most needy in case of cold winter. Bizzare the Latvian system looks now and the period of waiting simply feels too long.


KT said...

"I opt for president simply muddling through the autumn of Latvian political turmoil because he has no independent political backing" ... thoretically - lack of political backing can be seen as lack of political pressure. his hands are actually more free to say things, even unpleasant ones.

what do you think - is it just a theory?

Baltic said...

Tarmo, president's hands are not free due to his engagement with the governing coalition, who propsed him to run for this post. ALL his announcements NEVER criticize travails of the governing coalition, thus for his time there were NO unpleasantries vis--vis the governent. Just to compare, VVF would have simply thrashed government for such irresponsible anouncements that we have heard for last two weeks, but to no rational and constructive announcements from the Riga Castle. It feels right now, that silent coup d'etat is already performed and all branches of government are part of corporation named - governing coalition.

Also, BTW, Latvia is a small country and presidents' wife and PM's wife are cousins, but I do not know how much does it affect his governance style yet:)