LATVIAN INSTITUTE FACTSHEET NO 4 MAY 31, 2011

LATVIAN PRESIDENT INITIATES DISSOLUTION OF THE PARLIAMENT

By Karina Pētersone Director of Latvian Institute

Presidents’ Initiative

Latvian President Valdis Zatlers initiated the dissolution of the parliament in an address to the nation Saturday, May 28, in the evening.

President Zatlers took this historical decision on the brink of presidential elections to be held this Thursday, June 2, by the Latvian Parliament (Saeima), after his 4 years in office.

President Valdis Zatlers decided to initiate the dissolution of the current parliament on Saturday, following meetings with parliament speaker Solvita Aboltina, Prime Minister Valdis Dombrovskis and Prosecutor General Eriks Kalnmeiers earlier in the day with an aim to discuss the situation in Latvia.

The President’s Chancellery has stated in a briefing held for resident foreign diplomats that the president’s decision was caused by several considerations. First, the last parliamentary vote on denying the search of MP Slesers’ home was proof of a conflict between two pillars of power – the legislator and the judiciary. In this case only the sovereign –the people can act as an arbiter. Second, the parliamentarians’ political responsibility has to be borne not once in four years, but during the whole term of office. And the people need to express their opinion on the gravity of their deed. And third, the president was concerned about the influence of non-elected people upon decisions taken by the government and the parliament. The impossibility to reshuffle the parties forming the government within the existing arrangement of political forces in the parliament, as confirmed by the prime minister and the speaker, was likely to keep the decision makers from real change in their habits.

In his address, broadcast live on public television and radio, the president announced his decision to initiate the dissolution of the parliament, based on Article 48 of the Latvian Constitution, which stipulates that the President of the State has the right to propose the dissolution of the parliament, which is to be followed by a national referendum.

„I have decided to take a radical step. This decision, on the eve of the presidential election, is personally difficult for me, and it is also constitutionally complicated. I clearly understand that my decision may eliminate any chance for me to be re-elected to the presidency. And yet I have taken the oath of office, which says that I must devote all of my efforts toward the benefits of Latvia and her people. My duty is to work on behalf of the interests of state, not on my own behalf.

With this decision I want to create opportunities for every single person in Latvia. First of all, let us finally bring an end to the all-permissiveness of a narrow group of people. Let us bring an end to the situation in which the wealth that we have all accumulated with such hard work is found in the accounts of offshore companies.” the president said in his address.

1 „(...) the main job [of the parliament] was to get rid of the immoral behaviour that was the foundation for the great gap in trust which existed between the public and the 9th Saeima. We needed to get rid of the root of evil which separates those who are in power from the rest of our society.

Last Thursday, alas, the Saeima took a vote which like an alarm warns us of a serious conflict between the legislative and judicial branches of government – two of the three branches upon which our state is based. The Saeima demonstrated lack of respect and trust in the competence of the judicial system, and that, sadly, was not the first time. During the 9th session of the Saeima, the legislature failed to approve a judge whose professional development had been appreciated in the judicial system. The legislature refused to approve a prosecutor-general who was nominated by the highest official in the judicial system – the Chief Justice of the Supreme Court. This Saeima, too, sent early signals to show that morality and immorality have been inherited.” the president stated.

“Other immorality has also been inherited. We saw politicians bargaining over jobs – engaging in a passionate struggle over jobs instead of thinking about the country and its economic development. Jobs were handed over to buddies, as has always been the case. The Saeima showed on more than one occasion that it defends the personal interests of narrow groups or even specific individuals – not the interests of the state... We see that the government, which should be able to take decisions about the future of the country and the processes that would develop Latvia and raise its welfare, instead, sadly enough, looks at what a man outside of the Saeima says, even though the situation should be one which the government is run by the prime minister, and the government is responsible before the Saeima.” Zatlers said.

"Have there been any successes? Our country has had a success. In the past three years we miraculously coped with the economic crisis. We are a role model -- a role model of action, of results. But let's face it -- this crisis was overcome thanks to the Latvian people. The question is – in the name of what were these sacrifices borne? Was it really to raise oligarchs' profits, to let them embezzle public funds, to let the rule of law become a meaningless slogan?” the president asked rhetorically.

Appearing on Latvia's LNT commercial TV channel on Sunday night, Zatlers said he had also considered dismissing the Dombrovskis-led Cabinet as an option.

"I can assert that I made this decision yesterday, following meetings with the parliament speaker, the prime minister and the prosecutor general. Our conversations dealt with only one subject: The situation in the country and a possible solution. After these conversations I took the decision to initiate the dissolution of the parliament," Zatlers said.

"I asked the officials simple questions -- what solution they saw to the situation that had arisen from the failure to strip [MP] Slesers of lawmakers' immunity, and whether they saw any political alternative to the current government, whether they saw any way for the parliament to change the situation where the parliament's reputation has been damaged so severely," said Zatlers. The president claimed he had no additional information at his disposal apart from what has been made known to the public already.

The president said that the resignation of the Dombrovskis-led government was also considered as an option, but that both Aboltina and Dombrovskis said that the forming of a new coalition would not be possible.

"This was one of the options. Neither the parliament speaker, nor the premier could elaborate on their position, but they said a clear "no". No, we do not have a possibility to form a new government with this parliament. So, if this is the situation with the parliament, a new mandate from voters is needed," Zatlers explained.

2 The Legal Framework

Zatlers' decree initiating the dissolution of the current parliament means that a referendum on the issue has to take place within the next two months. If the referendum approves the president's move, the next general election also has to be organized within one to two months, and the new parliament would then have a month to convene for its first session. Thus, the whole process should take no more than five months.

Arnis Cimdars, chairman of the Latvian Central Election Commission, projected that the referendum might be held on July 23, 2011.

A referendum on the dissolution of Latvia's current parliament will take place on July 23, the Central Election Commission decided unanimously on Monday.

The commission's chairman Arnis Cimdars explained that the commission chose the farthest possible date so that it can complete all the necessary preparations in line with the procedure, which also includes providing voters in foreign countries with an opportunity to take part in the referendum, including by voting by mail.

Latvian citizens will be able to take part in the referendum in any of the polling stations organized in Latvia or abroad but they would need a valid passport.

The question on the voting slips in the referendum will be: „Do you support dissolution of the parliament?” and there will be two answers – Yes and No. No envelopes are used for voting in case of a referendum therefore voters will be given only the voting slips stamped by the polling station in question.

June 30, which was initially named as the likely date for the referendum, falls outside the two- month timeframe for holding such a vote, because President Valdis Zatlers' decree calling for the dissolution of the parliament was published in the official newspaper Latvijas Vestnesis already last Sunday, May 29, explained Cimdars.

Other dates, for instance, July 9 or July 16, were also proposed for holding the referendum at Monday's meeting of the Central Election Commission, because many people choose end of July for their annual vacations. This consideration, however, was not recognized as significant enough.

The referendum will cost an estimated two million lats (EUR 2.8 mln), said Cimdars. Roughly the same amount will be required to organize extraordinary general elections, if people voted in support of dissolution of the current parliament.

Under the Latvian Constitution, if more than a half of voters in the referendum supported dissolution of the parliament, the parliament will be dismissed and new general elections will have to be held no later than two months after the dismissal of the previous parliament. It means that the extraordinary elections might take place around September 17, Cimdars said.

He said that in case of the extraordinary elections there will be very short deadlines for producing the lists of candidates and making other arrangements for the elections because everything had to be done quickly, if the narrow time limit of two months was to be met.

In accordance with the Latvian Constitution, the referendum has to be held on a Saturday, within two months of the day on the president issues his decree. The referendum does not have a minimum voter turnout limit, and a simple majority of votes decides its outcome.

3 If the parliament is dissolved or recalled, lawmakers retain their powers until the next parliament convenes for its first session, but in the meantime, the existing parliament can only hold sessions if they are called by the president. The president also sets the agenda of such sessions.

The Latvian Constitution also stipulates that if more than 50 percent of votes in the referendum are cast against the dissolution of the parliament, the president is considered dismissed and the parliament elects a new president for the remaining term of the dismissed president.

Presidential Elections

The date of the Latvian presidential elections will not be changed, the elections will be held on June 2.

It was decided by parliament speaker Solvita Aboltina from the ruling Unity bloc after consultations with parliament faction heads, the speaker's spokesman Aleksis Jarockis told BNS.

The earlier date for the presidential elections has not been changed, said Jarockis.

Aboltina consulted with representatives of political forces following Latvian President Valdis Zatlers' announcement on Saturday on initiating dissolution of the parliament, a referendum on which still has to be held.

The politicians also discussed a possibility for lawmakers not to use their summer vacation and continue work until the referendum is held.

Zatlers' current term in office runs out on July 7.

There are two candidates-- incumbent President Valdis Zatlers and ex-banker Andris Berzins-- contesting the Latvian presidency.

The president's adviser Inese Libina-Egner indicated that the Latvian Constitution does not provide any time limitations for the president regarding presidential, parliamentary or other elections. "The president has the rights to [initiate the dissolution of parliament] up to the last day of his term in office," Libina-Egner said.

The Latvian parliament still has its powers and can go ahead with presidential elections as long as the Central Election Commission has not announced the outcome of the referendum on the parliament's dissolution.

"The parliament has all its powers between the initiation of the dissolution and the referendum. The parliament carries on with the procedure of presidential elections," Inese Libina-Egner, an adviser to Latvian President Valdis Zatlers, told journalists Sunday.

"Clearly, both the letter and spirit of the Constitution stipulates that the parliament retains all its powers in the meantime between the president's decree and the popular vote. The parliament continued to deal with all issues in its area of competence, including the presidential elections," the adviser said.

If a new president is elected before the referendum, he takes office in accordance with the normal procedure.

If a new president is not elected, the parliament speaker stands in as acting president after the outgoing president's term expires until the parliament elects a new president. Libina-Egnere indicated, however, that the Constitution obliges lawmakers to elect the new president as quickly as possible. 4 The president's legal adviser Sandra Sondore-Kukule explained that while performing the functions of acting president, the parliament speaker is not authorized to exercise such presidential rights as to return bills to parliament for revision or nominate a candidate for prime minister.

"The logic and spirit of the Constitution requires the parliament to make sure that the presidential office is filled as soon as possible," Sondore-Kukule said, adding that the Constitution also provides a "timeframe" in which the new president has to be elected.

The presidential adviser thus dismissed concerns that Latvia may be faced with a "vacuum of power" following President Valdis Zatlers decision to initiate the dissolution of the parliament. She pointed out that the parliament goes on recess regularly, while the government carries on with its work.

If Zatlers' reelection bid fails and the parliament elects somebody else as Latvian president, the new president will not be able to stop the dissolution procedure, said Libina-Egnere.

Zatlers also does not see any moral issue in the fact that the current parliament now has to vote on him as a candidate in forthcoming presidential elections. "I understand very well that it is much harder now for the lawmakers to make up their minds, because in a way I have expressed my non- confidence in them. If I am elected and the outcome of the referendum approves the dissolution of the parliament, I will stand down," Zatlers promised.

Politicians and Experts on the Latest Developments

Minister of finance Andris Vilks: “Current political developments in Latvia may lead to a new, positive breakthrough for the Latvian economy, provided that politicians do not indulge in populism and explain their moves to both the Latvian public and foreign partners.”

Vilks told BNS that ratings agencies and foreign investors that have been following developments in Latvia see that the Baltic country has always had problems with its political atmosphere. Latvia's credit ratings have suffered not only because of economic, but also because of political issues already in the past.

The minister indicated that it is essential now to explain to the public and foreign partners that President Valdis Zatlers' move to dissolve the parliament is a strong political statement aimed at dealing with ethical issues in Latvia's politics. "Together we have coped with the economic shock more or less successfully and are about to enter a phase of steady economic growth next year, but as for moral issues, we have seen some strange decisions also from the new parliament," the finance minister said, stressing the role of good communication in the given situation.

In his words, it is necessary to explain to foreign investors that Latvia wants to deal with its issues, to make its political environment more transparent, comprehensible and less corrupt, so that politicians' decisions stopped raising eyebrows.

Latvia is not going to change its economic direction, but the whole society would only benefit from higher ethical standards. "Latvia has long remained in the category of states whose political atmosphere and political issues are not really clear to anybody. Unfortunately, we look worse than the Estonians and Lithuanians," the finance minister said.

As for Latvia's credit rating, Vilks said that this is a long-term instrument and that speculations in foreign markets would be highly undesirable.

Vilks projected that Latvia probably has to brace for new general elections now, adding that in this situation it is essential for the politicians to refrain from populism and for the public not to trust such populist moves. "We must not indulge in populism," he said.

5 "As far as I am concerned, I will do my best to explain the situation and calm people down both here and abroad," the minister promised.

Tuesday, May 31, the President of Latvian Bank, Ilmārs Rimšēvics, said on the Latvian Radio, that international financial markets have in no way reacted to the political developments in Latvia. The nation has accomplished so much over the last two years that it has earned credit. All decisions are suspended until autumn, most likely. If a new parliament is due to be elected, the budget preparations will have to demonstrate whether the crisis lessons have been learned properly.

Latvian Prime Minister Valdis Dombrovskis told journalists following Monday's, May 30, coalition meeting that there had been a hard talk on last week's developments, including the parliament vote on searches at Slesers' residences and President Valdis Zatlers' decision to dissolve the parliament. The prime minister has warned that the current coalition may not survive another divisive vote, like the one on stripping MP Ainars Slesers of his lawmaker's immunity.

"Cooperation in the coalition in its present form has shown that we, unfortunately, have differing opinions on important issues concerning the rule of law. I feel that we have reached a certain threshold and that the coalition may not survive another similar vote. Figuratively speaking, this is a yellow card, and two yellow cards would make a red card," said Dombrovskis.

The forthcoming presidential elections, however, are not expected to threaten the survival of the coalition, which comprises Dombrovskis' center-right Unity bloc and the Greens and Farmers Union (ZZS). Dombrovskis asserted that the coalition is ready to keep working together and intends to agree next week on tasks that the parliament should complete by the referendum on its dissolution, for instance, to lift the requirement for law enforcement authorities to obtain the parliament's approval for searching a lawmaker's home.

"Obviously, should new disagreements appear on issues concerning the rule of law, it can cause new problems," Dombrovskis said.

Dombrovskis, meanwhile, indicated that President Zatlers has set a very serious goal to reduce the political influence of the so called oligarchs. But it will be impossible to hope for any improvement if ZZS, the leftist pro-Russia Harmony Center and the pro-business For a Good Latvia (PLL), the parties that did not support the search at Slesers' home, got a majority in the next parliament.

Disappointment in the new parliament then can prove even deeper than in this parliament, Dombrovskis warned.

The prime minister said that although Lembergs' influence on the government cannot be denied, the Ventspils mayor, considered one of Latvia's three most influential oligarchs, does not attend coalition meetings personally.

Political Moves

Latvia's ruling center-right Unity bloc has repeatedly pledged support for incumbent President Valdis Zatlers in forthcoming presidential elections, slated for this Thursday, the bloc's board member Ilma Cepane told the press Sunday night.

The Unity board has been engaged in a heated and passionate debate on possible changes in the current government and the ruling coalition, with also includes the Greens and Farmers Union (ZZS).

The Unity has backed Zatlers' reelection bid already from the beginning, but the bloc reasserted its support after the president announced a decision to initiate the dissolution of the parliament on Saturday

6 Transformation of both the ruling center-right bloc Unity and the opposition nationalist conservative National Alliance into single political parties have been planned this summer.

The Unity, currently consisting of three parties – the New Era, the Society For Different Politics (SCP) and the Civic Union – expects to call the foundation meeting of the Unity party by August 6 this year, the bloc’s spokeswoman, Laila Timrota told BNS.

The decision was approved by the Unity bloc’s board on Monday. None of the board members voted against but there was one abstention.

The parties currently forming the Unity bloc also agreed to take all the required legal steps to transform the bloc into a single political party „to continue the ongoing process of political consolidation while maintaining transparency and building honest, responsible and competent politics.”

The National Alliance which consists of two political parties – Fatherland and Freedom/LNNK (TB/LNNK) and All For Latvia – plans to hold the foundation congress of a single political party on July 23, TN/LNNK board member Janis Tomels told BNS.

He said that the National Alliance had made the decision on Monday due to „rapid changes in the political situation and the need to offer to the public a new vision for development of the state that would be based on both honest politics and national values as well the intention to consolidate nationalist conservative political forces as declared by TB/LNNK and All For Latvia previously”.

The National Alliance members have decided to create a single political party „so that in the extraordinary general elections people would have a chance to choose statesmen, who support honesty and justice, and are willing to work for the good of the state,” Tomels said.

The National Alliance MPs have remained faithful to their pledge to support Zatlers in the election vote on Thursday.

Augusts Brigmanis, chairman of the ZZS faction in the parliament, asserted his faction's readiness to work in the coalition, saying that it would be irresponsible to leave the state without a government at this point. Brigmanis also voiced support for Dombrovskis as prime minister.

Brigmanis explained repeatedly that MPs of the ZZS faction were free to vote as they wanted on Slesers' case and that the vote thus did not reflect the faction's position.

Brigmanis also said that ZZS agreed in principle that the requirement for law enforcement authorities to ask the parliament's permission to conduct searches in lawmakers' homes might be abolished. The chairman of the ZZS faction stressed that Ventspils mayor Aivars Lembergs still remained their candidate for Latvian prime minister.

"[He is] one of the most popular people, and God knows what the result would be if the president was elected in a popular vote," said Brigmanis.

As concerns presidential election, the ZZS have so far claimed to retain a free vote, having expressed no preferences in regard to either of the candidates.

The opposition party bloc For a Good Latvia, having 8 seats in the Saeima, who formerly supported Zatler’s candidature for the sake of maintaining stability and political continuity, have faltered in their support after the president expressed his loss of confidence in the parliament. The Peoples party have already withdrawn their support, the LPP/LC part of the alliance is holding back its decision, to be more eloquent on Thursday.

7 Likewise the Harmony Centre, will most probably not openly disclose their possible vote until after it. The public statements so far indicate that Zatlers has increased his chances among the group’s MP in comparison after his announcement that the Saeima should be dissolved. Analysts may wonder if their change of opinion is conditional and connected to a possible change in the coalition partnership, namely substitution of Farmers with Harmony Center.

However, involving the leftist pro-Russia Harmony Center in the Latvian government would not be logical at the moment, Prime Minister Valdis Dombrovskis indicated on Sunday.

The prime minister told journalists following Sunday night's board meeting of the ruling center- right Unity bloc that MPs of the Greens and Farmers Union (ZZS), the pro-business bloc For a Good Latvia (PLL) and the Harmony Center all refused to authorize the investigation of Ainars Slesers, a leading MP of PLL suspected of involvement in corruptive business schemes. Dombrovskis said that he saw no point in rewarding the Harmony Center for that.

"The question of suddenly inviting the Harmony Center to join the government is not on the agenda now," Dombrovskis said, adding though that such a partnership could not be ruled out in the future.

The Unity is bracing for a serious talk with its coalition partner ZZS on Monday. Unity leader and parliament speaker Solvita Aboltina said it would focus on "trampling the rule of law", adding that this is something the Harmony Center is doing as well.

"We want to understand their [ZZS] considerations, what their further steps might be on issues concerning the rule of law," the parliament speaker said.

"I would call to face the truth about the current parliament. Our voters asserted quite insistently that they wanted a government that would include the ZZS, the Fatherland and Freedom/LNNK was also mentioned. The president is now calling for different coalition with the Harmony Center. We should rather ask our voters if they are ready for such a change of position at this moment, because we have been elected by voters after all, and it is important to hear their opinion," Aboltina said.

"Yesterday I asked the president if he believed that the price for his reelection would be the Harmony Center in the government. Unfortunately, I did not receive an answer," said Aboltina.

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