Latvian Government Resigns

Latvia’s four-party coalition government, facing the steepest economic decline in the European Union and plunging public opinion ratings, resigned after two parties called for Prime Minister Ivars Godmanis to resign.

“I will continue to work and guide this government until a new one can be formed,” Godmanis, 57, who has led the coalition since December 2007, said at a press conference in Riga today.

East Europe’s countries have been battered by the global financial crisis, which curbed demand for their exports while shutting off credit and investment. Gross domestic product in Latvia, which has had 14 governments since shedding Soviet rule, contracted a preliminary 10.5 percent in the fourth quarter.

Mareks Seglins, the chairman of the People’s Party, and Augusts Brigmanis, the head of the Greens and Farmers’ parliamentary faction, had called on Godmanis to step down and allow a new government that represents more lawmakers to be formed, Leta newswire reported today. Godmanis’s Latvia First/Latvia’s Way Party was the third largest in the coalition, which held 52 of 100 seats in parliament.

The deepening economic crisis has sparked the worst street violence since independence, when hundreds rioted in Riga’s old city on Jan. 13, smashing windows and battling police after a peaceful anti-government demonstration of about 10,000 people had dissolved.

President Valdis Zatlers said he accepted the resignation and that talks on forming a new government would begin next week. Zatlers had said on Feb. 13 that Godmanis had “lost his trust” after the government abandoned plans to cut the number of ministries. Zatlers then said on Feb. 16 that Godmanis had admitted he made a “mistake” and agreed to continue with plans to reorganize the government.

Latvia followed other east European countries including Ukraine and Hungary in seeking international aid. The government lined up 7.5 billion euros ($9.5 billion) in loans from a group led by the International Monetary Fund. An IMF mission is currently in the country.