PM KALVITIS PLANS TO RESIGN DEC. 5

C O N F I D E N T I A L SECTION 01 OF 02 RIGA 000837

SIPDIS

SIPDIS
NOFORN

E.O. 12958: DECL: 11/08/2017
TAGS: PGOV LG
SUBJECT: PM KALVITIS PLANS TO RESIGN DEC. 5

REF: A) RIGA 821 B) RIGA 831

Classified By: Charge d'affaires a.i., Stuart M. Seldowitz. Reason: 1.
4 (d)


1. (C) Summary: Latvian PM Aigars Kalvitis announced November
7 that he will step down on December 5. He said he wanted to
ensure a smooth transition. At the same time, he nominated
candidates to fill three of the four vacancies in the
cabinet, including Maris Riekstins as foreign minister. The
ministers were approved by parliament November 8. Political
players and observers we spoke to believe that the current
four-party coalition will try to do everything it can to hold
together and form the next government. The early front
runner for PM is finance minister Oskars Spurdzins. If the
current coalition holds and only a few faces in cabinet
change, it is unclear whether that will satisfy the popular
discontent with the current government. End summary.


2. (U) On November 7, the one year anniversary of approval of
his cabinet following the October 2006 elections, Latvian PM
Aigars Kalvitis announced that he would resign as PM on
December 5, giving him three straight years in office.
Kalvitis made this announcement after consulting with
coalition partners and standing alongside President Zatlers,
after discussing his plans with the head of state. Kalvitis
stressed that he was announcing his intention to resign
rather than submitting his resignation to ensure that
"important work could continue" while ensuring "a smooth
transition" and "avoiding chaos." Kalvitis announced that he
was nominating three ministers to serve in his cabinet and
urged the parliament to approve them on November 8 following
adoption of the 208 budget (the votes on the budget and the
ministers ocurred the afternoon of November 8 and were
successful). Former Latvian Ambassador to Washington and
Kalvitis' current Chief of Staff Maris Riekstins was named as
Foreign Minister. Kalvitis also named candidates for the
ministries of welfare, and regional development and local
government. The post of economics minister remains unfilled.
(Note: Under the constitution, when the PM resigns or leaves
office, all members of the cabinet must also resign and the
parliament holds a confidence vote on the new cabinet as a
single unit, so all three will have to resign Dec. 5 along
with Kalvitis. End note.)


3. (C/NF) Kalvitis' foreign policy advisor, Peteris Ustubs,
told us when giving us an advance preview of the PM's
announcement that by not actually submitting his resignation
now, Kalvitis avoids going in to caretaker mode and retains
the ability to make important decisions. Ustubs said that
the PM hoped it would be possible to finalize the
Latvia-Russia border agreement in the first days of December,
for example (ref b). Viesturs Silenieks, political advisor
to Speaker Daudze and a representative of the Greens and
Farmers party (ZZS) in the coalition governing board, said
much the same and added reform of local government in Latvia
as another issue Kalvitis wanted to see resolved before
leaving office.

The next government - more of the same?
-------------- --------------

4. (C/NF) Silenieks said that he believed that the next
government would be based on the same four-party coalition as
the current one, which now has 55 seats in parliament. Asked
what would happen if Fatherland and Freedom (TB/LNNK) at its
party congress on November 24 elected a leader committed to
pulling the party out of the coalition, Silenieks responded
that he as sure at least 3 of TB's MP's would remain with the
coalition, leaving it with 52 seats, and the other 3 would be
willing to support the coalition on many issues. Members of
parliament from other parties have also suggested to us that
a leadership change in TB might not be reflected in the
alignment of its members of parliament. Silenieks fully
expected that the new PM and cabinet would be approved by
parliament on December 6.


5. (C/NF) Looking to the next cabinet, Silenieks said he
personally thought it was "a mistake" for the PM to announce
the new ministers and that all ministerial slots should have
been open for negotiation in writing the new coalition
agreement. He felt that Kalvitis and his People's Party (TP)
were "putting their foot in the door" to ensure they retained
the foreign affairs and regional development portfolios in
discussions on the new coalition agreement. ZZS then
nominated a new welfare minister to similarly lay down their
claim on the position. Silenieks said that these actions
took the three portfolios out of negotiations on a new
coalition agreement and speculated that the three ministers
were likely to continue in a new government. The other
ministers he thought were almost certain to stay in their
current positions are Ivars Godmanis at Interior and Ainars
Slesers at Transport; all other jobs are up for discussion.

RIGA 00000837 002 OF 002




6. (C) The name most often heard for PM is Finance Minister
Oskars Spurdzins, also from TP. Sources in the party call
him "a calming figure" and stress that he has been finance
minister for four years and has a reputation as a technocrat
rather than a politician. Silenieks termed Spurdzins "not as
loud" as Kalvitis, who has a legendary temper. One
journalist described Spurdzins as perfect for the job in the
current environment, given his perceived lack of political
ambition.

What about the opposition?
--------------

7. (C/NF) If the current coalition can hold, than the idea of
bringing leftist and ethnic-Russian based Harmony Center (SC)
into government would seem dead, especially since TB and SC
have both said they cannot work in the same coalition
together. Silenieks claimed that Kalvitis had told him that,
on reflection, he realizes that the people are not ready to
see ethnic-Russians in government. SC leader Nil Ushakov,
who had been very upbeat on his party's prospects of joining
government as late as November 6, commented bitterly after
the PM's announcement that it was "a creative way for the
coalition to stay in power." A journalist from a
Russian-language newspaper similarly noted to us that it was
easier for the current coalition to stay together than for
any of the parties to take the political hit of bringing in
SC.


8. (C/NF) The other main opposition party, center-right New
Era (JL),seemed more prepared for the PM's decision. We met
with JL's parliamentary leader Dzintars Zakis about six hours
before the PM's announcement. Zakis described the current
coalition as "lacking vision or strategy" and was especially
critical of TP leadership, saying that they lacked a
political mind among them. He confirmed that JL had been
speaking with individual members of the coalition about
coming in to government but he felt those were all to build a
fallback plan in case the current group could not hold
together. He seemed to feel that JL was better off staying
out of government anyway as the economic situation was
unlikely to improve in the short term, so why be saddled with
the blame for the lack of improvement.


9. (C/NF) Comment: The course of events is not unexpected
(ref A),although naming the three new ministers now caught
many by surprise. We continue to believe that the four
parties currently in coalition will attempt to continue
together in government, although the factor that unites them
most is keeping out the two opposition parties rather than a
comprehensive or coherent policy agenda. That they would
even be willing to continue on with a rump TB party is
testament to that. While Spurdzins is the front runner for
PM, his selection is far from assured and over the next four
weeks the coalition negotiations could be tough, especially
since some of the negotiating flexibility is limited by the
selection of these new ministers.


10. (C/NF) Comment, continued.: Assuming the current
coalition stays together and forms a new government, the key
question will be how the public perceives all this. Will
changing Kalvitis for a new PM and shifting around a few
ministers satisfy the groups that have marched in protest in
recent weeks? Or are they looking for a fundamental change?
If they don't get it, will they go back on to the streets?
Will they put more pressure on the President Zatlers to
dissolve parliament? JL's Zakis thought that the coalition
would be helped in this regard by the calendar, with the
people's interest in politics waning over the holiday season,
giving the coalition more breathing room. But with inflation
likely to remain high, economic growth likely to decrease
significantly, and the probability of indictments of
political figures in corruption cases, any new government is
unlikely to have much of a honeymoon and Latvia's next PM is
unlikely to stay in office nearly as long as Kalvitis.
SELDOWITZ