Wednesday, November 19, 2008

Latvian downward spiral continues

Its Thursday morning and Diena reports, that government plans to announce queueing for the IMF or EU rescue package in today's cabinet session. Huh, uhhh and finally it is open, and there is no need for Latvian diplomats to look stupid while repeating mantra of their superiors and saying that everything is alright in the Latvian Wonderland.

Harsh reality sets gradually in and in the meantime the Latvian president seems to be decided about pushing the Saeima into accepting the constitutional amendments prior Christmas brake. In his festive speech he specifically reminded MP's about their responsibility to bring about amendments that more than 600 000 citizens were in favour, and has started to hold consultations with major parliamentary stakeholders. Constitutional amendments I am talking about, are the same there was much discussed referendum on August 2, 2008.

Governing parties are very reluctant in their official announcements, and have openly said that they do not want to change the "sacred constitution" prior the October 2010 parliamentary elections. Reluctance is embedded and heads of ZZS, TP, LPP/LC, TB/LNNK party fractions in the parliament simply try to avoid this issue. Also the speaker of the Latvian parliament Mr Daudze avoided this issue. In his November 18 speech he emphasized that citizens have the major responsibility in these dire times thus they must pay properly taxes, whilst forgetting to mention that minigarchic families are major culprits for the lack of rule of law and entrenched role of grey economy.

Mr Daudze is well known for repeating views of his pocket party and the fraction, although in his speech he should abstract from the narrow view of his party and should try to consolidate views of the whole of the Saeima. It is too much to expect it from him however again... .

10 comments:

Anonymous said...

It is just sick, a sick way to celebrate 90 years.

These guys are so into their own interests they may as well sell Latvia on EBAY -- so the Chinese and Russians can bid for the country. Then Slesers can take the money and build bridges around the world.

Sick, sick, sick. This is why unlike the Polish emigration to the UK, which has stopped (and even reversed) in the past year, the Latvian contingent is not coming home -- and has no interest in coming home to this mess.

As we all said back in the 1990s, Russia does not need to fire one bullet to win back Latvia. If people get stupid and greedy, they'll just hand the keys to the gates to Moscow.

Sick, sick, sick.

Baltic said...

hi,

It is sick indeed & lets see whether the government is going to voluntarily give up itsel until X-mas, or the reckless TP is going to engineer smth. nasty?

Yesterday it was funny to see the example of the present governance. 2 MP´s (the vice speaker and one opposition members) and 3 ministers in Saeima. Ministers of Foreign Affairs, Justice and Medicine had to answer opposition PCTVL questions, but presenters of questions except one did not even show up...:)

Anonymous said...

V,

What is happening in Latvia is simply capitulation. Even the advocates are losing steam and pondering Plan B. The perpetrators of these political and economic crimes have already got their Plan B sorted.

The funny thing is, the only visionary in this whole thing was Kristovskis, who buggered off to Brussels. We thought it was already an embarrassing sign for the sitting defence minister to run (and accept) a Brussels seat, but now he's sitting outside this and laughing. Brussels itself is near collapse, but nowhere as bad as Riga...

TRex said...

As an expat in Latvia I find these posts very informative as I don't speak Latvian. It is one of the very few sites I can come to for information. Keep up the good work!

Magnus said...

No matter how bad the government has run Latvia's economy the last three years (which they have done at least fiscally), I don't agree that all what we are seeing this autumn can be blamed simply on bad governance. The current finance-crisis is hitting all economies, also well-run ones like Dutch and Swiss.

However, I agree that the lack of economic realism the last years will lead to Latvia suffering more then most other countries. If in Q2 and Q3 of 2007 bigger inflation-curbing measures had been put into effect, and big projects like National Library been postponed for harder times (which in fact Zatler argued), the current deficit of government wouldn't have been so big and the Ministry of Finance would have had more availible tools at their disposal.

Currently, the Lat is the biggest obstacle. To keep the currency pegged to the Euro, Latvia needs higher interest rates than in the Euro-area. But at the moment, lower interest rates are what is needed. I would therefore like to see from government a clear priority of how they will deal with this crises: a stable currency or fiscal stimulis. I suspect that in short time the government might be needed to make the 2nd choice, and let the Lat float (which would for sure mean a loss of Lat's value and a de facto devaluation) But I've been waiting for this for more than a year already, so the Bank of Latvija might in fact have more control of the Lat than we think.

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