LATVIA IN REVIEW September 13 – 20, 2011 Issue 37 CONTENTS Government Harmony Center Wins Snap Elections in Latvia 63 MPs from Dissolved Latvian Parliament have been Re-elected Unity Expects ZRP to Pick Third Partner in Would-Be Ruling Coalition in Latvia Harmony Center Leader: Latvia Should Hold Referendum on Euro Adoption Harmony Center, Zatlers Reform Party, Unity Share Many Similar Views Timeline of the Latvian Government’s Decisions in Relation to airBaltic Baltijas Aviācijas Sistēmas Asked to Immediately Meet the Government’s Conditions Economics Outcome of Latvian Elections May have Positive effect on Financial Market Latvian Government to Sign Protocol of Intent with IBM Purchases of Capital Goods Continue to Account for the Current Account Deficit Latvian Foreign Tourism Shows its Best Result Yet in 2011 Foreign Affairs Kristovskis to Take Part in 66th Session of UN General Assembly in New York EU Multi-Annual Budget - Negotiations between PMs of Finland and Latvia PM Calls on Poland to Defend Latvia’s Interests of Latvia During EU Presidency Foreign Minister Kristovskis Expresses Support to Georgia Latvia and Kazakhstan Sign Intergovernmental Agreement Latvia to Join Open Government Partnership Initiative Latvian President, NATO Secretary General Agree on Main Issues on NATO Agenda EU’s Multiannual Financial Framework – Latvia’s Top Priority during Polish Presidency Kristovskis Defends Latvia’s Interests Regarding EU Budget in Brussels Society 14,085 Voters Abroad Took Part in Early Elections of the 11th Saeima Articles of Interest Bloomberg News: “Latvian Parties Agree on Budget, Euro as Coalition Talks Begin” The Economist: “Snap Election Falls Flat” New York Times: “Gains of Pro-Russian Party in Latvia Show Worries on Economy and Graft” Latvians Online: “Election Turnout Abroad Best Since 1993; London Again Sees Most Voters” Associated Press: “Pro-Russia Party Wins Snap Latvian Election” BBC: “Pro-Russia Party Wins Most Votes in Latvia Election” Government Harmony Center Wins Snap Elections in Latvia On September 20, the Latvian Central Election Commission (CVK) produced preliminary results of the September 17 snap elections with votes counted from all polling stations. Those results show convincing victory of the leftist pro-Russia Harmony Center with 28.36 percent of votes, the Baltic News Service reported. According to the Rīga-based newswire, with votes from all 1,027 polling stations counted, the Harmony Center has received 259,930 votes or 28.36 percent; the newly-founded centrist Zatlers Reform Party (ZRP), 190,853 votes or 20.82 percent; the center-right Unity bloc, 172,567 votes 1 or 18.83 percent; the nationalist conservative National Alliance, 127,208 votes or 13.88 percent; and the center-right the Greens and Farmers Union (ZZS), 111,955 votes or 12.22 percent. According to BNS, no other parties have been able to rise above the statutory 5-percent threshold in the elections in Latvia. In the Rīga electoral district, which, in addition to the polling stations in the Latvian capital, includes also all polling stations organized abroad, the Harmony Center received 41.45 percent of votes, BNS reported. BNS also reported that information from all 235 polling stations organized in Rīga and abroad shows that the Harmony Center received 118,079 votes or 41.54 percent of all votes cast in the Rīga electoral district. The Unity was in second place in the Rīga electoral district, with 17.41 percent or 49,479 votes, and the ZRP was in the third place, with 15.12 percent or 42,977 votes. The National Alliance received 13.4 percent or 38,086 votes, and the ZZS received 5.99 percent or 17,028 votes, BNS reported. According to the BNS newswire, Harmony Center scored a convincing victory in two of the five electoral districts – the Rīga district and the Latgale district in eastern Latvia; but the ZRP received the largest number of votes in the three remaining electoral districts – Zemgale in southern Latvia, Vidzeme in north-eastern part of the country, and Kurzeme in the west. BNS also reported that the CVK said earlier that the Harmony Center had won 32 seats in the 100-member Latvian parliament, the ZRP will have 22 seats, the Unity 20 seats, the National Alliance 14 seats, and the ZZS 13 seats. 63 MPs from Dissolved Latvian Parliament have been Re-elected As many as 63 lawmakers of the dissolved 100-seated Latvian parliament have been re-elected, according to estimations by the Baltic News Service based on the preliminary list of lawmakers elected to the parliament published by the Central Elections Commission (CVK) after the snap parliament elections on Saturday, September 17. According to the Rīga-based newswire, the majority of changes have been brought to the parliament by the newly-founded Zatlers Reform Party (ZRP). There are only two lawmakers among the 22 MPs from ZRP who have experience in the parliament – Klāvs Olšteins, who had been elected from the Unity bloc earlier, and Romualds Ražuks, who worked in the parliament several years ago. BNS also reported that the faction of the leftist pro-Russian Harmony Center – the winner of the elections, who will have 31 seats at the parliament – have seven new lawmakers, including three women. There are two new lawmakers among the 20 mandates for the Unity bloc, BNS reported, while the National Alliance will have eight new lawmakers who have not worked in the previous parliament among the 14 lawmakers elected to this parliament. Meanwhile, according to BNS, the Greens and Farmers Union (ZZS) faction will not have any new lawmakers, as voters have shown support to the 13 party members who already worked in the previous parliament. According to BNS, it is not excluded that the number of new lawmakers will grow after some of the current lawmakers are named for the government. BNS reported that the CVK will release official results of the September 17 snap elections no later than in three weeks. Unity Expects ZRP to Pick Third Partner in Would-Be Ruling Coalition in Latvia The center-right Unity bloc expects the newly-founded centrist Zatlers Reform Party (ZRP) to name the third partner in the would-be ruling coalition to be formed in Latvia after the September 17 snap elections, Solvita Āboltiņa, one of Unity‟s leaders, told the press after the meeting of the bloc‟s board on September 19, the Baltic News Service reported. 2 According to the Rīga-based newswire, when asked how long it would take to form the new ruling coalition, Āboltiņa said only that the Unity believed that the coalition government should be formed within a month, which is also the statutory deadline for formation of the new government. “We hope to make some progress tomorrow. At present it is very important to understand what is the ZRP idea of the ruling coalition,” the Unity representative was quoted as saying, pointing out that the ZRP had received the second largest number of votes in the snap elections. At the same time, according to BNS, Unity believes that it has the best candidate prime minister – Latvia‟s current Prime Minister Valdis Dombrovskis. “We have the best candidate prime minister but no offices and spheres of responsibility have been discussed in the talks so far, we have only discussed programmatic objectives,” Āboltiņa was quoted as saying. An inquiry about the possibility of the Unity being left out of the would-be ruling coalition only made the bloc‟s leaders smile, BNS reported. “No, the most realistic ruling coalition would be tripartite –Unity, ZRP, and then there is the question about the third partner in the coalition,” Dombrovskis was quoted as saying. According to BNS, the Unity board was on Monday informed about the results of the talks about formation of the new ruling coalition held so far and gave the party leaders a mandate to continue the talks. “We are still open to [cooperation with], first of all, ZRP, then the National Alliance and the Harmony Center, and the board‟s mandate was to proceed along those lines,” Āboltiņa said. BNS also reported that on Tuesday morning, September 20, Unity had a meeting with the ZRP representatives and will also arrange for the second round in the talks with the Harmony Center and the National Alliance. “We are pleased with the triumph of the rule-of-law. The first round of the talks did not reveal any dramatic differences,” Āboltiņa told BNS, describing the talks already held with the parties elected to the new Latvian parliament. Harmony Center Leader: Latvia Should Hold Referendum on Euro Adoption Latvia should hold a referendum on the euro adoption, said Nils Ušakovs, the Rīga City Mayor and the leader of the leftist pro-Russia Harmony Center, who won the snap parliament elections on Saturday, in an interview with Latvian daily Diena on September 19, the Baltic News Service reported. The euro adoption in Latvia, in his words, depends on stability of the eurozone. “There are many factors that we may not influence -- stability of the eurozone and the future. We should meet all possible criteria to be able to discuss already in 2013 whether a referendum on the euro adoption in necessary,” Ušakovs was quoted as saying. He believes that it would be right to allow people to voice their opinions about support to the adoption of the euro. “It is related with the state symbol, with a very serious step in the development of the country. It is not about how we will fight inflation or form the government budget. The question about replacing the lat with the euro is very important and a referendum would be the right format to decide on it.