Latvia’s government collapses after budget row

Latvia’s minority coalition government, led
by Europe’s first Green prime minister, has resigned
after the country’s legislators refused to pass the 2005
budget.

The Latvian government handed in its resignation on 28
October after the parliament (Saeima) voted 53-39
against the country’s 2005 budget, which was proposed
by Prime Minister Indulis Emsis. There were also five
abstentions. The prime concern of those who voted against
was that the planned deficit was too big. Under the 2005
budget the deficit was projected to reach
two per cent of GDP and spending would have
increased by 23 per cent over 2004.

Meanwhile, Latvia remains committed to adopting the
euro in 2008. “The fall of the Latvia government
will not change the ERM-2 plans or the plans of entering
the euro zone in 2008,” outgoing Finance Minister
Oskars Spurdzins was quoted as saying. Spurdzins’s
own party also vetoed the budget.

The 52-year-old Emsis’s
three-party coalition, which came to power on
9 March 2004, commanded only 47 seats in the
100-member parliament. It was the country’s 11th
government since 1991. Emsis, who is in Rome for the
signing of the EU Constitution, had no comment.

President Vaira Vike-Freiberga must now nominate a new
prime minister whom parliament must endorse.

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