I returned from the coast of Aegean for a week to do dissertation interviews and participate at the RSU entrance exams. It is summer time in the Baltic States but all the three governments must cope with the economic recession. All three governments must drastically cut government expenses and curb top notch civil servants and politician´s salaries. While Lithuanian and Estonian governments have managed doing painful education, home affairs and civil service sector reforms Latvian government must do those long overdue reforms now all at once. It is a gigantic task and in addition Latvian second biggest Parex bank requires monies for stabilizing its operations.
Travails of Valdis Dombrovskis (Latvian PM) have barely started but the governing coalition members already show their true nature. Instead of fixing problems that the very coalition ``partners`` created during their rule from 2004-2009, the same coalition members are playing traditional ``Latvian political stabbing games`` now. Instead of listening to the Western partners advice (Latvia is a member of the EU and NATO after all) some of the Latvian provincial and boorish politicans want to continue serving their special interests.
The IMF was chosen as a chief negotiator to overhaul Latvian overblown and antiquated public service sector. The statutes of the European Treaty does not allow the European Commission to meddle into the internal affairs of its member states while bypassing the European Council. That was the reason why, even though the biggest creditor of the 7,5 billion euro loan is the European Union, the structural reforms negotiations are steered by the IMF. While the first to tranches of the multi billion loan is already transferred into the Latvian treasury, now two Latvian governing coalition members (Union of Farmers and Greens (UGF), and People´s Party (PP)) are calling the government to pause or even to give up the loan from the IMF in order to avoid harsh conditionality of the IMF and EU requirements.
The situation is serious enough thus the president interrupted his vacation. While the Latvian executive is still working the Latvian lawmaker is in recess till the end of August. And the latter is the biggest cause for insurmountable problems in this tiny parliamentary republic. Also the governor of the Bank of Latvia called the announcements of some of the governing elite members as irresponsible, but its seems that it is not enough. It was announced that tomorrow there would meeting of the coalition council in Riga. Major topic? Future negotiations strategy with the IMF!
While the Ministry of Economics has structurally reformed already and serves as an example for other Latvian ministries to emulate, the rest of Latvian civil service is still in waiting mood, and irresponsible announcements of Augusts Brigmanis (UGF) and Mr Kucinskis (PP) are only prolonging the irresponsible stalemate. When the Dombrovskis took the reins of the government then it was announced that by May 15, 2009 Latvian civil service would have a comprehensive public service remuneration system, but civil servants at the ministry of Finance still have failed to deliver (and when the remunaration system would be introduced then?). While New Era party is holding the reins of power still certain ministers drag their feet and sometimes obstruct the reform process. Instead of solving the problems in a transparent way Latvian executive continues its traditional ways of secrecy. For example, the government without any discussions and listening to doctors or social workers opinion has agreed to give in to the alcohol producers lobby (the minister of Agriculture Mr Duklavs (UGF) was the manager of Piebalgas Alus brewery), and they want to start selling alcohol at night again (now all sale of alcohol is prohibited from 10pm - 10am). The former transport supremo has changed his profile and he is the vice Maire of Riga now. His political announcements are shady however, and its seems that he has left several political land mines behind him.
The fact that some of the governing coalition members want to terminate negotiations with the IMF is simply stupid and shows short - sightedness of those politicians who dare to make such announcements. Also it makes me feel that something is brewing in the governing circles. The latest ratings show that except the Harmony Center party all other Latvian parties have lost legitimacy in the eyes of Latvian voters. Probably some of the parties who have come up with controversial announcements about the termination of the negotiations with the IMF hope for some brownies and early elections. Juris Dobelis (Fatherland Party-MP) in his latest interview uttered that he does not believe the present parliament would be able to survive until the October 2010 elections. The snap elections cannot come from the clear sky, however, and need a legitimate cause for the president to use his powers entitled upon him. I would not be surprised if May 26, 2009 meeting would end in disaster, that would make the president to call for sacking the utterly inefficient parliament. According to Latvian constitution the referendum would be called then in two months where presidents might come out either as a Latvian history maker or as a loser.
Why do I think this way? Because if the early parliamentary elections would take as early as possible then PP, UGF and Fatherland parties have still something to gain. The more time goes by the more legitimacy the Harmony Center and Latvian First and Latvian Party Union (LFLWPU) would gain and more control over administrative resources acquire. Also earlier elections the better for government parties, because it would not be easy for the Harmony Center and LFLWPU to find viable candidates for the parliament, and Ainars Slesers would find it hard to justify his decision to run for the parliament again.
Early elections would also prevent the rapid consolidation of the reformist Latvian parties - New Era, Civic Union and Society for Another Politics, although that process proceeds slowly now. Anyway, I have always kept repeating that I do support early elections due to many reasons. First, the elections in October 2006 were not truly legitimate and it also created historic precedent by the decision of the Supreme Court as of November 3, 2006. Second, in the parliamentary republic the travails of lawmakers are supreme, but while Latvia experiences worst economic decline in its history parliamentarians are simply in recess now. Third, most of the MP`s are simply unqualified and are simply killing their time in order to meet their mortgage payments. Finally, I believe that legitimacy of the rulers can be restored only by punishing perpetrators who allowed Latvian state to be led into its present abyss. And even if Latvian lawmakers did not participate in shady deals, their major guilt is the fact that their incapacity to rule was a major cause for lack of oversight over Latvian regulatory agencies and outright legal loopholes that allowed chosen interest groups instead of public to reign supremely for the last eighteen years. There is no better punishment for the present MP´s than early elections.
