LATVIA IN REVIEW July 19 – 25, 2011 Issue 29 CONTENTS Government Latvian Parliament Dissolved in Referendum on July 23 Prime Minister Dombrovskis Votes in Favor of Dissolution in Referendum Ex-President Zatlers Confirms Readiness to Run in Latvia's Parliamentary Elections Latvia’s Ex-President and Associates Establish Zatlers Reform Party Merger of Nationalist Parties TB/LNNK, All For Latvia! Supported at Congress Economics In U.S., Dombrovskis Promotes Closer Cooperation Between Latvian and American Companies Dombrovskis Participates in NASDAQ Stock Exchange Closing Bell Ceremony in New York Dombrovskis to Bloomberg News: Latvia on Schedule to Adopt Euro by January 1, 2014 In Texas, Dombrovskis Encourages Cooperation Between Latvia and Texas Universities, Companies Bank of Latvia Economist: Producer Price Rise Moderates, But Still Fueled by Higher Energy Prices Bank of Latvia Economist: Money Supply Leveled Out; Pronounced Rise Not Yet Expected Latvian Unemployment Drops to 12.3% in Second Half of July Foreign Affairs President Presents Credentials to Upcoming Latvian Ambassador to Canada Latvian and Lithuanian Presidents Agree on Closer Cooperation at EU Level Baltic States Demonstrate Unity in Protesting Austria’s Release of Ex-KGB Colonel Mikhail Golovatov State Secretary Teikmanis Participates in Opening of Latvian Honorary Consulates in California Society Highest Voter Turnout Abroad for Latvia’s Referendum Reported in UK Sigulda Opera Festival Presents Open-Air Performance of Eugene Onegin Weekly Saturday Flea Market Unveiled at the Former VEF Factory in Rīga New Wave 2011 International Competition of Young Pop Singers Kicks Off in Jūrmala Articles of Interest Bloomberg: “Latvia Referendum Dissolves Parliament” Associated Press: “Fed Up with Corruption, Latvians Sack Lawmakers in Historic Referendum” Agence France-Presse: “Latvians Vote Overwhelmingly to Force Snap Election” New Europe: “Latvia: Political Déjà vu?” Al Jazeera: “Latvians Back Dismissal of Parliament in Vote” Reuters: “Latvians to Fire Parliament, Head to New Election” Reuters: “Timeline: Latvia Heads for New Elections” Bloomberg Business Week: Latvia to Weaken Oligarchs, Join Euro in 2014, Dombrovskis Says” Rancho Santa Margarita Patch: “Local Doctor and Prime Minister Cut Ribbon on Consulate” Mother Jones: “Inside Latvia’s Gay Rights Battle” Stanford University News: “Bridging the Innovation Gap: From Latvia to Silicon Valley” Government Latvian Parliament Dissolved in Referendum on July 23 Latvian parliament (Saeima) was dissolved in a referendum on July 23, according to preliminary results which indicate that more than 94 percent of voters cast their ballots in favor of sacking parliament. Preliminary results show that 650,518 voters, or 94.3 percent, voted for the dissolution of parliament, while 37,829 votes, or 5.48 percent, cast their votes against dissolution, the Latvian Central Election Commission reported to BNS after receiving data from all 1,028 polling stations. 1 According to BNS, the latest voter turnout data both from Latvia and foreign countries suggests that 689,988 people, or 44.73 percent of Latvia's eligible 1,491,735 voters, took part in the referendum. In order to go forward with the dissolution, the move had to be approved by more than 50 percent of participants in the referendum. The current parliament will continue to work until the next parliament takes office, BNS reported. In the meantime, parliament sessions will be called by Latvian President Andris Bērziņš, who will also set the agenda of these sessions. Standing parliament committees and the presidium will also carry on with their work, but the presidium will not be authorized to call parliament sessions. The referendum on dissolution of the parliament was initiated by outgoing Latvian President Valdis Zatlers a month before his term in office expired. Zatlers called for the historic referendum after parliament refused to permit law enforcement officials to search the home of parliamentary deputy and reputed oligarch Ainars Šlesers, from opposition party For A Good Latvia (PLL), as part of an ongoing investigation in a major corruption case. According to data compiled by the Central Election Commission, a total of 689,988 people, or 44.73 percent of Latvia's 1,491,735 eligible voters, took part in the referendum. Prime Minister Dombrovskis Votes in Favor of Dissolution of Parliament On July 23, Latvian Prime Minister Valdis Dombrovskis, a member of the Unity bloc, cast his vote in the referendum on the dissolution of parliament, saying that he had voted in favor of the dissolution of parliament, BNS reported. According to BNS, Dombrovskis explained his vote in the referendum by saying that Unity had agreed with former Latvian president Valdis Zatlers from the very start, when he initiated the referendum on the dissolution of parliament shortly before his term in office expired, emphasizing that the parliament should not contain any parties that were under the influence of reputed oligarchs. “From the very start, Unity supported the initiative of former Latvian president Valdis Zatlers for the dissolution of parliament. Unity sees this as a good chance to make sure the parties representing oligarchs’ interests, or voting to support oligarchs’ interests, would have no majority in the next parliament. This is a chance to ensure that the forces supporting a state governed by the rule of law have the majority,” the Prime Minister was quoted as saying. However, BNS reported that he would not make any predictions as to the likely composition of the ruling coalition after the possible early general elections, as this would depend on the outcome of the elections. “But I would like very much that this opportunity would be used to achieve the goal of having in the parliament a majority that would be free from oligarch influence,” Dombrovskis told BNS. According to BNS, in response to an inquiry about the government’s work until the possible early general elections, Dombovskis said that the key task of the government is to ensure that political changes do not threaten positive trends in economic development and financial stabilization. Ex-President Zatlers Confirms Readiness to Run in Latvia's Parliamentary Elections Ex-president Valdis Zatlers has asserted his intention to run in Latvia's early parliamentary elections with his Zatlers Reform Party (ZRP), founded on July 23, BNS reported. “I am ready to get fully engaged in this reform process and do everything to create this party and ensure that it achieves good results,” Zatlers said in an interview with Latvian television channel LNT on July 24. According to BNS, the former president also indicated that the creation of the new political party began only on July 23 – the day the party was officially established – and for this reason 2 ZRP would be one of the last to submit its list of candidates for the general elections. “Considering that our party was founded only yesterday, we will be the last to submit this list,” the ex-president told LNT on July 24. Zatlers declined to reveal the possible posts he might take if his party received the required number of votes in the parliamentary elections. “I am not interested in posts at this point. My first concern is to make sure that the party develops into a stable force, based on new principles,” he told LNT. “I will answer the question when the lists are drawn up. These people will introduce themselves. We will have our candidate for prime minister too. But it takes time. My immediate task is to create this party, and its creation began yesterday,” said Zatlers on July 24. Latvia’s Ex-President, Associates Establish Zatlers Reform Party Zatlers Reform Party (ZRP), named after former Latvian president Valdis Zatlers, was established at a foundation congress in Rīga on July 23 attended by 293 party members, reported BNS. At the congress, Zatlers was elected as leader of the party; he was the only candidate for the post. According to BNS, Zatlers Reform Party will be a centrist party, and its organizers have underlined that politics without ethnic division is required for the development of the country. The key principle of centrism is that further national policies should bring balance to the national development. According to the introductory chapter of the party’s program, as quoted by BNS, “An emphasis on future, medium, and long-term perspectives and an adjustment of policies to the given phase of development” will single out ZRP among other centrist political forces. “ZRP is not a right- wing party because it does not rely solely on choices by individuals and private owners and the belief that the market rules will settle everything,” the program indicated. The program states that the cornerstone of the party’ ideology is the solidarity of citizens and a focus on the identity and strength of the community. The mission of the new party, BNS reported, is to implement major reforms “to release the potential of people, the land, and the state, and to remove the pile-up of barriers preventing balanced and sustainable growth.” According to BNS, the party’s program, which covers seven years or two successive parliamentary terms, also indicated that the main directions for the reforms will be to build a healthy economic structure that would be competitive on a regional level; to restore the demographic balance and sustainability of the social system; to offer high quality and easily accessible education and health care systems; to build a pragmatic, cost-effective, and far-sighted public administration; and to develop a political decision-making system that would be accountable to citizens and would enjoy their trust. According to BNS, the economic chapter of the party’s program listed the achieving of a zero- deficit budget by 2014 among its main objectives. The program states that the deficit in the Latvian national budget for 2012 should be below 2.5 percent of GDP and the government debt to GDP ratio must not be increased any further.