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EU Budget Commissioner Dalia Grybauskaitė and MEP Valdis Dombrovskis are leaving their European seats to return home to countries troubled by the financial and economic crisis, running for the highest office in Lithuania and becoming prime minister of Latvia respectively.
The Baltic states have been destabilised by growing social unrest triggered by the worsening economic crisis. On 16 January, police in Lithuanian capital Vilnius fired tear gas to disperse demonstrators, who pelted parliament with stones in protest against cuts in social spending. More than 80 people were detained and 20 injured.
Prime Minister Andrius Kubilius said the violence would not stop an austerity plan. Yesterday (26 February), Kubilius urged the EU to do more to help its poorer members in central and eastern Europe, which have been hit hard by the global financial crisis.
According to Moody's, the Lithuanian economy contracted by a preliminary 1.5 percent in the fourth quarter of 2008 and may shrink by as much as six percent this year. The economy of Latvia, which joined the EU in 2004, was once the fastest-growing in the European Union, but it has since undergone a dramatic reversal of fortune.
The economic crisis has hit Latvia hard. Last month, protests in Riga over the worsening economic situation degenerated into riots (EurActiv 14/01/09).
Last December, the country was forced to seek a 7.5 billion euro bailout by a group led by the International Monetary Fund. Despite Latvia's previous stellar performance, in the last three months of 2008 it was the worst-performing economy in the EU.
Indeed, credit rating agency Standard & Poor's recently reduced its rating for Latvia to BB+/B, which is below investment grade. S&P predicted that the country's economy would contract by 12% this year, following a 4.8% decline in 2008.
Commissioner Grybauskaitė to run for national office
Dalia Grybauskaitė, the EU's commissioner for budget and financial planning, announced yesterday (26 February) that she will run for the Lithuanian presidency.
"She has a very good chance of winning," said a Lithuanian MP. "Her chances are stronger than any other candidate at the moment," she said. Opinion polls also indicate that Grybauskaitė's popularity could propel her to victory in the first round of elections on 17 May.
The commissioner's decision to run was widely expected, but she reportedly made up her mind after seeing violent demonstrations on the street of Vilnius in January, which saw a crowd forced back from in front of the country's parliament during a rowdy anti-government protest.
Grybauskaitė, who is not affiliated to any political party, will run as an independent candidate. But Lithuanian Prime Minister Andrius Kubilius has reportedly already given his backing to the commissioner, announcing his intention to convince his Conservative Party to endorse Ms. Grybauskaitė.
Lithuanian electoral law requires prospective candidates to submit 20,000 signatures before 2 April. A high electoral committee will then announce the names of all candidates on 17 April, when campaigning is set to begin.
According to the EU executive's code of conduct, the commissioner will need to take a leave of absence until May 17, or June 7 should she fail to obtain a decisive majority of the votes. In the meantime, her portfolio will have to be assigned to another commissioner until she resigns from her post after the elections.
Despite the fact the Lithuanian president has limited powers, Lithuanian officials in Brussels consider Grybauskaitė as someone who could develop the presidency and give it a completely different twist. "She is bright, trustworthy, reliable and very much loved by the Lithuanians. She will be able to take a clear stance and shape policies and legislation," said a Lithuanian official.
MEP Dombrovskis becomes prime minister of Latvia
Meanwhile, Latvian MEP Valdis Dombrovskis was yesterday nominated as the next prime minister of Latvia by the country's president, Valdis Zatlers. Despite some observers' claims that he had not been all that prominent as an MEP, his political family in the European Parliament, the centre-right EPP-ED group, issued a statement expressing its utmost satisfaction with the development, describing Dombrovskis as "one of the most talented and successful politicians in the European Parliament today".
Dombrovskis, 37, is an economist by training. He is now charged with forming a new government following the resignation of the previous administration last week. The new prime minister, who is from the centre-right New Era party, was Latvia's finance minister from 2002 to 2004, and worked as an economist at the country's central bank from 1998 to 2002. He is expected to form a government with many of the same coalition partners as his predecessor.
News agency reports quoted Nils Muiznieks, a professor at the University of Latvia, as describing Dombrovskis as a "fresh face". But Muiznieks questioned whether he had enough weight to handle different coalition partners, the budget and talks with the IMF.
"The alternative is that the state is bankrupt," Dombrovskis reportedly said, adding: "The state treasury will just run out of money."
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