Sunday, November 2, 2008

Economic crisis and demand after leftist politics rising

Economic crisis in Latvia is ongoing and it is finally reflected in the rising utility bills. Last week I received the bill for heating expenses - instead of the State regulator & the Latvian Gas monopoly (Latvijas Gaze) agreed 40% increase, it was all 100%!!! First, I will have to find out a rationale behind such an illegal gas utility price hike, and second, I find it hard to imagine what are pensioners and underprivileged people doing when they receive such bills... .

The government acted irresponsibly whilst allowing the Latvijas gaze and the State Regulating Agency to agree on such a rise prior winter sets in, and economic hardships are on the threshold. It is long known fact, that government officials in their Brivibas St. bubble have no clue about the life "out there". But it seems that the Chief regulator, Madam Andrejeva who is spending certain part of her free time gambling does not care about it either. Probably she should, if she is thus open - heartedly sticking to the ideals of the organization (the Communist Youth League (Comsomol)) she was borne from and an anniversary she was attending in the Riga Moscow house last week!

Diena reports the latest (October) party political ratings this morning. The rise of leftist parties is noticeable if one looks into the bottom and top of the chart, because Social Democrats (LSDSP) have finally budged from the slump. The rise of the Reconciliation Centre party (Saskaņas Centrs) is constant throughout 2008. Quite unexpectedly also the russophone radical Human Rights party (PCTVL) has achieved quite a significant increase (reaching 4,1%) of support last month. And all this rise of leftist politics due to the economic crisis only? Not really, because after the 2006 stolen elections the governing coalition parties support has slumped since March 2007. Also, the number of alienated (Nepiedalīsies) and disillusioned (Nav izlēmis) voters does not decrease, thus the popularity of the leftist parties clearly takes place at the expense of the governing coalition and fractional right wing opposition parties.



The numbers also show that if elections should take place tomorrow, then only one member of the governing coalition, The Union of Greens and farmers (ZZS) who's chief financier is the controversial Maire of Ventspils, would cross the required threshold (5%) for entering the parliament. Opposition New Era (JL) support continues its slow rise mostly due to their findings of questionable lawmaking in the Saeima. Prime Minister's party reaps the benefits of being in charge, but it is a slippery slope, because if Ivars Godmanis would be unable to manage economy well (and all signs show that) support for LPP/LC would simply die out. Also PM´s coalition buddies are rising voices about possible reshuffle of the existing government. The loudest voices came from the biggest loser (just 2,9% support!) during these precarious times, the People´s Party (TP).


The new leader of Latvian questionably conservative party announced that they could agree on forming the governing coalition with the leftist SC, but not giving them foreign, defense and ministry of finance offices... .

Traditional party political games continue. The governing coalition works in an artificially nervous regime and the stupidly proposed 10% cut of civil service irrespective of the size of the ministry creates too much a bad blood now.

The 2009 budget was passed in the first reading with as little as 53 AYE's . The PM and the Minister of Finance have already announced that if the budget would be signed by the president into law then they would immediately start cutting it early next year, thus why not do it now prior passing it in the second reading in the parliament? Would the 2009 budget really engineer the fall of the government?


P.S. Last week Edward Lucas was in Riga and gave a public lecture to the Riga Stradins students. Thank you Edward again!! The lecture was well attended, although I wished to see more economics (!!) and journalism students. The follow - up chat in Teātra bārs was very warm and heartily and gave me several ideas, that I will elaborate upon after touring Tartu and prior flying to Istanbul. Also, to those of you reading in Latvian, prior Edward Lucas public lecture in Riga I wrote a small opinion piece in Diena.

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