Friday, February 13, 2009

The Latvian Cabinet agrees that it cannot agree on anything...(updated)

After all the hype about the reorganization of the bloated Latvian government, cutting wages, and slimming it down from eighteen to twelve ministries (and cutting the number of state agencies from about 200 to 85) the government of Ivars Godmanis returned to square one! According to BNS the governing coalition council agreed that they cannot agree on anything, and they would continue within the present government framework...thus continuing to enjoy their power bubble... .

According to the news the PM and the rest of the government have drawn a red line, and would "seriously work on alleviating the economic turbulence and revise the 2009 budget medium term expenditures now", until the municipal and European parliament elections on June 6, 2009! Seems that the power bubble is really tiny in Latvia! To use science fiction analogies I have a feeling now that the Latvian "governing nomenclature" has exited (or never entered:) the EU called solar system, and still complacently enjoys the orbit of the post-Soviet Andromeda... .
Text in Latvian - "You crossed the red line!"
Cartoon: Gatis Šļūka

Latvia is already a failed state where the PM economic advisor Mr Miglavs openly announced in today's interview in Diena, that, if the dairy industry will not find export markets, it would probably have to be shut down, and just after LVL 27mlj. were allocated to farmers after their protests last week. Inability to plan the restructuring of economic sectors is endemic. Ministries of agriculture and education were run by the Union of Greens and Farmers (UGF) ministers for the last six years, but the UGF policy in supporting all small holders without asking any education credentials has failed now. Policies were left stranded and not solved in complex manner. Therefore, for example, while in neighboring Estonia 5,7% of the economically active workforce in agricultural sector produces 2,9% of GDP, in Latvia for producing 3,3% of GDP requires 12,8% of economically active farmers... .

The workers is the smallest concern now, because government is busy with appointment of ministers after the ministers of agriculture and culture had to leave their respective posts. Changes in the Latvian cabinet require approval of the parliamentary majority, while changes in the same Estonian or German cabinet can be decided by the PM and approved by the president. With the antiquated form of the Latvian constitution, that stems from the controversial Weimar Grundgesetz, the Latvian PM would never be able to produce any results. It is because his primary concern would always remain provision of the governing coalition stability. Concerns about the latter is too much of a luxury in today's turbulent times, and the "Latvian governing nomenclature" unfortunately does not comprehend that... . After all the bickering and bad blood spilled I cannot understand how the government and governing coalition MP's can draw red lines and agree on anything?
The president Zatlers consulted with the EU Energy Commissioner Andris Piebalgs while in Strasbourg, and Mr Piebalgs did not exclude the possibility to take over the rudder of Ms Latvia if such proposal would be made to him. It makes me reckon that the governing coalition is irresponsibly imitating the work during economically dire times now, and trying to understand among themselves how the perks would be divided after the fall of the incumbent government. Political science is powerless here, and psychiatrist is needed to evaluate the state of mind of those "governing" Latvia today... .
At the end of the day the president Zatlers rather unexpectedly came up with an announcement, while commenting the decision of the government to abolish the plan to overhaul the government this morning. "Mr President has lost his trust in the prime minister Mr. Godmanis" [I.Godmaņa kungs ir zaudējis manu uzticību,» atzinis Valsts prezidents], and he summoning the PM to the Riga Castle next Monday. That's it, and another announcement in the badly staged theatre... .
I refuse to comment his announcement this time because the Latvian president is famous for changing his mind according to winds blowing.


Wannabe Sorosieši said...

I am not a big fan of the IZM but I am curious what you mean by this "but the UGF policy in supporting all small holders without asking any education credentials has failed now. " Could you clarify this please?

Baltic said...

The CAP subsidies have number of requirements, and farmers holding a specific university degree in order to be eligible to receive further payments is one of them. In Latvia, however, the level of education in agricultural field (Minstry of agriculture supervised and financed the LLU until 2004 if I am not mistaken:) is formality... . The ministry of agriculture did not foresee extinction of small farmers. Instead UGF focused on the way of least resistance and continued to hand out promises to small holders while knowing that their promises CANNOT be kept:)

Since Sicco Manscholt CAP reform in 1972 farmers were required to be well educated. His reforms were considered too harsh, however the directive still asked the members state governments to retrain those small farmers who leave their farms due to increasing competition.

Since Manscholt several reforms of the CAP followed. Decisionmaking power is still witihin purview of national capitals about the reformed sectors of economy, and it depends on parties in power (UGF in our case), how successfuly/unsuccesfully they comperehend the EU legislative framework and how well/bad they reform the sector...

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