Protests over government policies in a deepening economic crisis turned violent last month near the Latvian Parliament. (Ilmars Znotins/Agence France-Presse)
Latvia's center-right coalition government collapsed Friday, a victim of the country's growing economic and political turmoil and the second European government, after Iceland, to disintegrate because of the international financial crisis.
Latvia, a former Soviet republic sandwiched between Lithuania and Estonia, has been wracked by demonstrations in recent weeks over its imperiled economy. In January, an initially peaceful gathering of about 10,000 people descended into rioting when, after the crowd had mostly dispersed, a handful of protesters attacked the police and looted stores. About 40 people were injured in Latvia's worst violence since the breakup of the Soviet Union.
...public discontent pushed Prime Minister Ivars Godmanis to hand in his resignation, contributing to further political instability. Like Iceland, Latvia is a prime example of how economic woes are being translated into a public backlash against the excesses of market capitalism and what is seen as the failure of various governmental institutions to mount an effective response.
After posting the highest growth figures in Europe just two years ago, the Latvian economy is collapsing. It shrank at over a 10 percent annual rate in the fourth quarter of 2008 and economists estimated it could contract 12 percent or more this year, which would almost certainly be the worst in Europe. The country's credit rating, already the lowest in the Baltics, was cut to junk status Tuesday by Standard & Poor's.
Unemployment is climbing, reaching 8.3 percent in January from 7 percent in December and 5.6 percent as recently as October.
President Valdis Zatlers named Valdis Dombrovskis, 37, a finance minister between 2002 and 2004 and current member of the European Parliament, as candidate for prime minister of the country of 2.3 million, a European Union and NATO member.
"...In reality the state is on the verge of bankruptcy," Dombrovskis told reporters after his nomination.
Watch raw footage of the January 13 protests in Riga:
http://www.youtube.com/watch?v=o6TNr1OVVrA
for complete articles:
Latvia's government collapses
February 20, 2009
http://www.iht.com/articles/2009/02/20/europe/latvia.php
As Latvian economy falters, unrest grows
February 25, 2009
http://www.iht.com/articles/2009/02/25/business/latvia.php
Latvia leader names PM nominee amid crisis
February 26, 2009
http://www.iht.com/articles/reuters/2009/02/26/europe/OUKWD-UK-LATVIA-PM.php
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