LATVIAN PARLIAMENT INSTALLS NEW CENTER-RIGHT MAJORITY

UNCLAS SECTION 01 OF 02 RIGA 000938

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM PINR LG
SUBJECT: LATVIAN PARLIAMENT INSTALLS NEW CENTER-RIGHT MAJORITY
GOVERNMENT, PM KALVITIS RETAINS HIS POST



1. SUMMARY. The Saeima (Latvian parliament) voted 58-41 on
November 7 to approve a new center-right government led by Prime
Minister Aigars Kalvitis of the People's Party. The new government
took office immediately after the vote. The four-party coalition
consisting of the People's Party (TP),the Greens and Farmers Union
(ZZS),the First Party/Latvia's Way (LPP/LC),and Fatherland and
Freedom/LNNK (TB/LNNK) controls 59 seats in the 100-member Saeima.
The government's agreed-to priorities include improving the
education system, turning around Latvia's population decline (caused
by low birth rates and labor out-migration),curbing inflation,
balancing the budget, increasing energy security, improving police
performance, professionalism, and remuneration, and using EU funds
efficiently. Most ministers from the previous Kalvitis cabinet
retained their jobs, although the key interior, justice, and
economics portfolios turned over. Pundits expect the new government
to be among the most stable since Latvia regained independence in

1991. Kalvitis became the first PM in Latvia's history to keep his
position after fresh elections. END SUMMARY.


2. Following several weeks of unusually quiet and pragmatic
inter-party consultations culminating in a decision to invite a
fourth partner (TB/LNNK) into the government, the new Saeima
comfortably endorsed the four-party coalition led by Prime Minister
Aigars Kalvitis of the People's Party at its first session on
November 7. Of 99 MPs voting, 58 backed the government (all present
members of the ruling coalition),and 41 voted against (all
opposition MPs from New Era, Harmony Center and PCTVL factions).
Aigars Kalvitis thereby became the first prime minister in Latvia's
history to retain his job after fresh elections.


3. Prime Minister Aigars Kalvitis' new government has a comfortable
59-seat majority in the 100-member Saeima: TP (23 seats),ZZS (18
seats),LPP/LC (10 seats) and TB/LNNK (8 seats). The new government
has 19 cabinet portfolios. The only change in cabinet portfolios is
the creation of a new portfolio of Minister in Charge of Managing EU
funds. The People's Party will hold seven ministerial posts, the
Union of Greens and Farmers will have five portfolios, the First
Party/Latvia's Way - four, and Fatherland and Freedom/LNNK - three.


4. Most ministers from the previous Kalvitis' government will keep
their jobs, including defense minister Atis Slakteris (TP) and
foreign minister Artis Pabriks (TP),who is a strong
trans-atlanticist. The most controversial member of the new cabinet
is Ainars Slesers of LPP/LC who returns as transport minister after
being sacked by PM Kalvitis from the same position earlier in the
year following his implication in a vote-buying scandal in the city
of Jurmala. Post-Soviet Latvia's first (and so far longest-serving)
prime minister Ivars Godmanis (LPP/LC) will work as interior
minister replacing much-criticized Dzintars Jaundzeikars. In
addition, former Economics Minister Stokenbergs has been replaced by
LNNK's Jurijs Strods, while Stokenbergs moves to be Minister for
Regional Development. LNNK also received the Justice Ministry, in
the person of Gaidis Berzins.


5. The composition of the new Latvian government is as follows:

-- Prime Minister: Aigars Kalvitis (TP)
-- Health Minister: Gundars Berzins (TP)
-- Foreign Minister: Artis Pabriks (TP)
-- Finance Minister: Oskars Spurdzins (TP)
-- Culture Minister: Helena Demakova (TP)
-- Regional Development/Municipal Affairs Minister: Aigars
Stokenbergs (TP)
-- Defense Minister: Atis Slakteris (TP)
-- Economy Minister: Jurijs Strods (TB/LNNK)
-- Justice Minister: Gaidis Berzins (TB/LNNK)
-- Minister for Managing EU Money: Normunds Broks (TB/LNNK)
-- Social Integration Minister: Oskars Kastens (LPP/LC)
-- Transport Minister: Ainars Slesers (LPP/LC)
-- Interior Minister: Ivars Godmanis (LPP/LC)
-- Children and Family Affairs Minister: Ainars Bastiks (LPP/LC)
-- Agriculture Minister: Martins Roze (ZZS)
-- Environment Minister Raimonds Vejonis (ZZS)
-- Welfare Minister: Dagnija Stake (ZZS)
-- Education and Science Minister: Baiba Riva (ZZS)
-- e-Affairs Minister: Ina Gudele (ZZS)


6. Under the government's "declaration" or action plan, its main
priorities are: improving the education system, finding ways to
reverse Latvia's continuing decline in population (caused by a
combination of low birth rates, high mortality among certain groups,
and an acceleration of labor out-migration following Latvia's 2004
entrance into the EU),curbing inflation, balancing the budget,
increasing energy security, increasing the performance,
professionalism and remuneration of the police force, and using EU
funds more efficiently. Longer term, the government aims to build
Latvia as a competitive, highly-developed and prosperous society.
Strengthening the rule of law, fighting corruption, combating crime
and contraband are also listed among the long-term priorities. In
foreign policy, the GOL, among other things, pledges to preserve and
strengthen the strategic bilateral partnership with the U.S. as well
as to support transatlantic links and solidarity among allies.

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Latvia plans to continue participating in international
peace-keeping missions under the auspices of NATO, EU or the UN.


7. Comment: Kalvitis' new majority government represents one of the
most stable ruling coalitions in Latvia's history and has the
potential to work until the fall 2010 Saeima elections. That said,
it remains to be seen whether the government will manage to
implement its policies efficiently and avoid the emergence of
serious inter-party squabbles. By leaving center-right New Era (JL)
in the opposition, the People's Party, Greens and Farmers and the
First Party wanted to punish JL for its continued feuding with its
coalition partners after the last elections, and for its decision to
withdraw from the Kalvitis coalition in April. Even though JL won
18 seats in the October elections and is ideologically close to the
four coalition parties, it is likely in for a long spell in the
opposition. JL could only return to the government if a need to
reshuffle the Kalvitis government arises because of irreconcilable
differences among the coalition partners. Given the careful
discussions which preceded the government's formation, this is
unlikely any time soon. End comment.

BAILEY