Latvia's government resigns amid economic crisis

RIGA, Latvia — Latvia's center-right coalition government resigned Friday after weeks of instability brought on by the country's economic collapse.

President Valdis Zatlers said he accepted the resignation of Prime Minister Ivars Godmanis and his administration, which had been in power since December 2007. Zatlers said he would begin talks with party leaders Monday to find a new candidate for prime minister.

Earlier Friday, the two largest parties in the ruling coalition parties had urged Godmanis to step down.

Godmanis blamed those parties _ the People's Party, and the Greens and Farmers Union _ for the government's collapse, particularly at a time when Latvia must carry out tough economic reforms to get a rescue package from international creditors.

"I am ready to continue working, but I think that responsibility for the consequences created by this government's resignation must be taken by those parties that overturned the government," Godmanis told reporters.

International lenders, including the EU, the International Monetary Fund and Nordic countries, have pledged euro7.5 billion (US$9.5 billion) to help the Baltic country recover from its economic predicament.

President Zatlers has pressured the government to cut back on the number of ministries and bring in new faces in an effort to win back the public's trust, which has plummeted.

However, despite repeated attempts, the four ruling parties have been unable to reach a consensus on which ministries to abolish.

The country's economic decline is accelerating. Output plummeted more than 10 percent in the fourth quarter year-on-year, meeting a common yardstick for a depression.

On Wednesday the Finance Ministry predicted that gross domestic product would fall 12 percent fall this year.

Public anger spilled into the streets on Jan. 13, when scores of protesters clashed with police as they tried to storm Parliament. More than 40 people were injured in Latvia's worst riots since the country split from the Soviet Union in 1991.

Comments

[moongal6]

04:54 PM on 02/20/2009

Think........Bush's two appointments to the World Bank.

Master of War, Paul Wolfowitz, then, clueless Zoellnick.

Did anyone audit the books at the World Bank after the corrupt Wolfowitz, and before Zoellnick?

I believe this global depression has much to do with those two appointments.

We need for Obama to appoint a new President to the World Bank.

[gakabani]

01:08 PM on 02/21/2009

You must be kidding me! Wolf and Zoe are the most corrupt people ever in the history of humanity. These two deserve a prize for destroying the economy of the world.

[satyriasis]

03:14 PM on 02/20/2009

The Bush depression has just begun folks. We aren't even half way through and entire governments are collapsing.........

God help us all.

[tjfdownsouth]

03:32 PM on 02/20/2009

I think this is the Carter depression. You have to ignore those little ups and downs and look at the big picture.

Thats what keep hearing on global warming so I am going to apply it here also.

[satyriasis]

04:53 PM on 02/20/2009

Ugh Carter had nothing to do with this. This crisis occurred from 2002-2008. It is the Bush depression. It's what happens when you are criminally negligent in regulating the financial markets.

[max08]

06:46 PM on 02/21/2009

Carter depression? You on drugs? This was started with Reagan and Bush Jr took the rails off an already fragile situation.

[LADawson]

02:18 PM on 02/20/2009

Wait... you mean people who fail horribly can actually resign? You mean we don't actually have to be condemned to listen to them for all eternity? What a concept.

[jazzman]

02:16 PM on 02/20/2009

Well, we had our decade of 'creative financial instruments' that emerged unfettered through the miracle of deregulation and the invisible hand. What did this miracle of free market fundamentalism, governments the problem, get out of our way, greed is good capitalism bring us? A world wide economic collapse.

Way to go Milton Friedman, Ayn Rand, Alan 'Maestro' Greenspan, and Republican Supply Siders. The world listened to you and now we're all screwed.

[tjfdownsouth]

03:34 PM on 02/20/2009

Deregulation means less government interference in the market, I am not aware of when that happened in my lifetime.

[MNTom]

04:19 PM on 02/20/2009

They deregulated after WWI, which lead to the great depression.

[rkimball]

02:01 PM on 02/20/2009

the house of cards are coming down.

[breakingpoint]

12:52 PM on 02/20/2009

If McCain won the US would be taken down too - The political winds in Congress should be thanking their lucky stars Obama won.

Still, I'd like to see protests in the street with support for Obama and but pressure on Congress and the Justice Department to arrest the crooks and pass legislation on health care reform, housing and jobs.

[hypnotoad72]

01:18 PM on 02/20/2009

True, but as the President said, we have to look and move forward with cleaning up this mess too.

[breakingpoint]

02:40 PM on 02/20/2009

When the house burns down you look for new digs first - Obama has a lot on his plate, but the government has plenty of resources. Johnson did it fast, with just the stroke of his pen. Government need to get crackin' here!

The fastest way to get things moving is to stop paying Congress until the American People are once again safe in the jobs, home, and health.

We're wasting time - Congress needs to hear that loud and clear.

[RoloTomassi]

11:55 AM on 02/20/2009

Well, I am tempted to see this as a positive sign....

HA! But that's just my delusional wishful thinking, as US politicians will give up the reigns of power when they are pried from their cold, dead hands....