The incumbent PM in Latvia would step down in three weeks (at least that is what he promised). The president V. Zatlers has left the PM with initiative to form the new cabinet. I personally could imagine such steping down of the government in the situation where state macroeconomic situation is sound, finances in order and society satisfied with government's work. In Latvian wonderland we see 25% current account deficit, 13% inflation, PM ratings collapsed, and the government has degraded to 20% approval ratings whilst an average EU-25 approval for the government is 47%. The same incompetent government led by Aigars Kalvitis wanted to amend constitutional safeguards for security organizations, and wanted to put the head of the Anti Corruption Agency (KNAB) on the altar of their political lobbies.
The same government now holds consultations about possible way out from the looming economic distress. In the meantime the govenor of the Bank of Latvia keeps reiterating that there would be economy's soft landing. Instead of understanding that their incompetence and graft is the primary reason for the political turmoil in Latvia, the ruling elite continues to live in the power bubble. There is no place for discussions. Also the incumbent PM reiterated in his SWH radion interview that the New Era (JL) party reprimand for snap elections would bar them from being included in the new government formation. To be honest, in these consultations that take place between JL and the existing coalition today, I would suggest that JL would not back off from their initial reprimand - to agree to participate in the post December 5 government ONLY, and only if it will be led by the JL designated prime minister Valdis Dombrovskis, and also finding the initial aproval for the three fundamental principles to be passed in Latvian legislature.
JL was once (April 2006) already sidelined from the very same coalition and I hope it should have taught them a lesson. Second, the looming economic distress would not fare well for any party for the upcoming municipal and European Parliament elections in July 2009. If the prsident would assign JL representative to form the new government, the new PM should take this offer only in case three fundamental principles would be pushed through the legislature - tax and property declaration law, law stipulationg that political parties receive their funds from the budget, and finally ensuring the legal independence of the KNAB. In case these FUNDAMENTALS do not go through the parliament there is no other way out, just snap elections.
In case scenario of JL led government would take place (which is very improbable right at this moment) it would be a sign that those Latvian MP's who are elected have learned lessons of the late demonstrations (it looks though more like wishful thinking). If such idealistic scenario would not come to a fruitition it would be a sign of Latvia ruled by quasi royal political wannabies. Simply refurbishing the existing government with new faces from the same coalition members on December 5, would be an example of the 19th century monarchy or some authoritarian statelet somewhere, but not of the 21st century liberal democracy. The strategic choise between quasi-monarchy and republican ideals are at stake in Latvia for upcoming three weeks. Very much would depend on the mounting pressure of the civil society groups against the governing elite, because without it participatory democracy is impossible. Participation of civil groups however, is the very basis for thriwing liberal democratic regime!