Toms Rostoks

An Anti-oligarch Election in Latvia

Latvia has had two parliamentary elections in less than a year. The regular elections that were held on October 2, 2010, produced a coalition government of the Unity (Vienotība) and the Union of Greens and Farmers (Zaā¼o un Zemnieku Savienība – ZZS). However, this government was torn by internal distrust and on issues related to the rule of law, ZZS voted in concert with the opposition parties, Harmony Centre (Saskaņas Centrs – SC) and For Good Latvia (Par Labu Latviju – PLL). Shortly before the presidential elections on May 28, President Valdis Zatlers therefore initiated the procedure for the dissolution of parliament (Saeima). The referendum was held on July 23 and an overwhelming majority (94.3% or 650,518 voters) voted in favour of dissolving the parliament.

Snap elections were held in Latvia on September 17, 2011. SC emerged as the clear winner, having received 28.36% of the total vote and 31 seats in the parliament. The newly-founded Zatlers Reform Party (Zatlera Reformu Partija – ZRP) came in second with 20.82% (22 seats). Vienotība received 18.83% (20 seats). The National Alliance (Visu Latvijai – Tēvzemei un Brīvībai/LNNK – VL-TB/LNNK) will be represented in the parliament with 14 seats (13.88%) and ZZS with 13 seats (12.22%). Two things are worth noting at the outset. First, despite the fact that these parliamentary elections were held under extraordinary circumstances, voter turnout was the lowest (59.49% of all eligible voters). Second, the Å lesers Reform Party (Å lesera Reformu Partija – Å RP) did not pass the statutory 5% threshold and the Peoples’ Party (Tautas Partija –TP) was dissolved shortly before the elections.

By the end of September, it was clear that the core of the next government would be formed by ZRP and Vienotība, but it is still not yet clear who else will be invited to join it. The options that are discussed include VL-TB/LNNK and SC, while ZZS is likely to remain in the opposition because of its close relationship with one of the so-called oligarchs, Aivars Lembergs, the Mayor of Ventspils. This article will discuss two issues. First, I intend to outline the wider context of these snap elections and the main issues debated during the pre-election period. Second, I will analyse the coalition-building process, which is still ongoing.

The context of the snap elections

The Latvian political landscape has undergone a period of major transformations since 2006 when the 8th parliamentary elections were held. Back then, everything was going well for the parties that formed the government. The economy was growing at an astonishing rate and the same political parties who formed the ruling coalition in the previous parliament were re-elected. The then Prime Minister Aigars Kalvītis (TP) even suggested that the 2006 parliamentary elections could be seen as a vote of confidence for his government. His cabinet of ministers was supposed to oversee a period of extensive economic growth and political stability. However, things did not work out that way. First, the onset of an economic crisis brought a change of government, with Ivars Godmanis taking the prime minister’s post in late 2007. Second, Godmanis’s government was succeeded by Valdis Dombrovskis’s (New Era – JL) government in March 2009. Although initially TP participated in the government coalition, it eventually left in March 2010 and the Dombrovskis government functioned as a minority government until the parliamentary elections of October 2010. Latvia’s First Party/Latvia’s Way with its ‘Pedal to the metal!’ philosophy was not even invited to be part of the Dombrovskis government.

Despite drastic budgetary cuts, both coalition partners – Vienotība and ZZS – were rewarded in the parliamentary elections on October 2, 2010. Vienotība won 31.22% of the vote (33 seats in the parliament), while ZZS obtained 19.68% (22 seats). SC gained 26.04% (29 seats), VL-TB/LNNK gathered 7.67% (8 seats) and PLL, which was a desperate attempt by Andris Å ā·ēle (TP) and Ainārs Å lesers (Latvia’s First Party/Latvia’s Way – Latvijas Pirmā Partija/Latvijas Ceā¼š – LPP/LC) to remain in power, got 7.65% (8 seats). Vienotība and ZZS eventually decided in favour of a two-party coalition with 55 seats in the parliament.

Although the government of Vienotība and ZZS managed to pass the necessary budgetary cuts in order to meet the demands set by the international lenders – the European Commission and the International Monetary Fund – the coalition partners were in disarray over issues such as the fight against corruption, the rule of law and the appointment of high-ranking officials. On these issues, ZZS frequently voted in concert with the opposition parties.

Why did President Valdis Zatlers initiate the process of dissolving the parliament on May 28, 2011? The triggering event was the parliamentary vote that blocked the prosecutor general’s request to lift the parliamentary immunity of one of the so-called oligarchs, Ainārs Å lesers, in order to conduct a search in his home. This vote clearly revealed that there was de facto an alternate ruling coalition in the parliament.

Other reasons for dissolving the parliament were also highlighted by President Zatlers. He claimed that the impact of the three aforementioned so-called oligarchs had resulted in ‘state capture’. According to President Zatlers, the consequences were dire. First, the influence of Aivars Lembergs through the Union of Greens and Farmers had resulted in a disproportionately generous allocation of EU funds to the already wealthy region of Kurzeme to the detriment of Latgale, which is by far the most disadvantaged region in Latvia. Second, the existence of the aforementioned de facto coalition led to the inability of the government to rid the Corruption Prevention and Combating Bureau of its unsuitable director Normunds Vilnītis. Third, there had been cases when the parliament had rejected well-respected candidates for high-ranking positions suggested by the judiciary.

However, it seems that Presidents Zatlers suddenly discovered that the so-called oligarchs exerted too much influence on Latvian politics only after it had become clear that he would not be re-elected for a second term. Hence his decision to form a political party immediately after Andris Bērziņš (ZZS) was elected president in early June 2011. Although the dissolution of parliament required a referendum, no political party fought against Zatlers’s decision because popular confidence in the parliament was so low that it was clear that it would be dissolved. So, it was hardly surprising that on July 23, 94.3% of those who participated in the referendum voted in favour of dissolving the parliament.

The election campaign was marked by discussions over several issues. SC could be confident that they would be the biggest faction in the next parliament. During the election campaign, they insisted that the government should put an end to any further budgetary cuts. SC was also in favour of raising pensions. However, these promises have easily been sacrificed after the elections when ZRP and Vienotība insisted on continuity with the previous government’s economic policies as a precondition for considering SC as a coalition partner. ZRP’s campaign focused on the necessity to decrease the influence of the so-called oligarchs on Latvian politics. In addition, ZRP was in favour of a major higher education sector reform.

Vienotība stressed the necessity to curb government spending even further. It was emphasised that previous reforms had been successful and that the Latvian economy was expected to grow in 2011 by up to 4%. ZZS tried to fight back against accusations of being heavily influenced by the mayor of Ventspils who is facing charges of corruption, bribery and money laundering. Their campaign was built around the populist idea of raising pensions. However, this move strained the already tense relations with their coalition partner – Vienotība – even further, seriously impairing cooperation prospects after the elections. VL-TB/LNNK built their campaign around national issues and support for economic reforms implemented by the Dombrovskis government. Being left without power after the 2010 elections, they hoped that the disillusioned Latvian electorate would flock to their side.

Coalition-building

According to the constitution, political parties in Latvia have plenty of time to form a government, as the first sitting of a newly-elected parliament takes place up to one month after the elections. The president has the power of naming the prime minister candidate who forms his/her government, which is then presented to the parliament for approval. At the time of writing of this article (early October 2011), it is not yet known which parties will form the next coalition government. Although the coalition-building process is still under way, at least one political party – ZRP – has made it clear that it would like to form a coalition together with SC (despite the fact that in the previous government SC voted in concert with the so-called oligarchic parties) and Vienotība. Dombrovskis would retain the prime minister’s post in this government. There is no doubt that this is a bold decision, but it comes as no surprise because there are indications that before dissolving the parliament on May 28, 2011, Zatlers had tried to force a coalition with SC upon Vienotība as the only option to avoid the dissolution of parliament. Back then, Vienotība did not succumb to Zatlers. There are signs that this time Vienotība would also be against this, preferring a coalition with VL-TB/LNNK. In addition, this decision can have a highly detrimental effect both on ZRP’s and Vienotība’s internal cohesion.

Shortly after the elections, it was clear that there were some partnerships that were unlikely to materialise, for example, SC (31 seats) with VL-TB/LNNK (14 seats) and ZRP (22 seats) with ZZS (13 seats). Technically, it is possible for SC to form a two-party coalition with ZRP (together they have 53 seats), but this is unlikely because neither of the two parties has ever been in government. Besides, a partnership with SC would be problematic for many members and supporters of ZRP.

Preliminary consultations have revealed that ZRP and Vienotība are likely to form the core of the coalition government, but the real question is who will be invited as the third partner. ZRP’s decision in favour of SC, which was announced only recently, has to be supported by Vienotība, which has not happened yet. In general, there are two options, with their own strengths and liabilities. The first option is to form a coalition government with SC. Such a government would have an absolute majority in the parliament (73 seats). One of the items on the agenda of ZRP is a constitutional reform and this coalition would probably allow amending the constitution in order to change the procedure for electing the president. ZRP has made it clear that it favours a popular elected president and it is likely that Zatlers envisions himself as the first president in Latvia elected by a popular vote. In addition, this coalition would demonstrate that Latvian political parties are ready to embrace SC whose electorate mainly includes speakers of Russian, this being a symbolic political gesture of major importance.

However, this scenario has several weaknesses and unknowns. First, there is a long tradition of distrusting political parties whose electorate is made up of speakers of Russian. Second, inviting SC into the ruling coalition may alienate Latvian voters. Third, there is considerable internal disagreement in both ZRP and Vienotība on this issue. In addition, there are doubts about the intellectual foundations of the party because their economic programme was probably the weakest from the five parties who passed the 5% threshold. In sum, although after the elections it initially did not seem likely that SC might become part of the ruling coalition, party consultations have shown that there is enough readiness to seriously contemplate such a scenario, especially after SC has dropped much of its populist rhetoric.

The second option is to invite VL-TB/LNNK to join the government. At first glance, this seems to be the easiest option because there are no major disagreements over economic policies between VL-TB/LNNK on the one hand, and ZRP and Vienotība on the other. However, this step may further alienate Russian-speaking voters, while the often careless rhetoric of some members of VL-TB/LNNK may cause resentment both at home and abroad. It is also possible that nationalism trumps pragmatism in VL-TB/LNNK, which might further complicate the internal workings of the government.

A few words need to be said about the impact of the election results on Vienotība. Although Vienotība’s representation in the parliament was somewhat reduced, it is likely that they will play a major role in the next government (irrespective of whether they accept ZRP’s choice in favour of SC or fight back to invite VL-TB/LNNK as the third coalition partner). It is also likely that Valdis Dombrovskis will retain his post as prime minister. However, several ministers (Sarmīte Ēlerte, ā¢irts Valdis Kristovskis and Aigars Å tokenbergs) were not elected to the new parliament. This means that the next government will see many new faces not only due to the presence of ZRP, but also because there has been an internal reshuffle of influence in Vienotība.

In sum, the elections held on September 17 provided evidence for both continuity and change in Latvian politics. On the one hand, there is considerable change because the so-called oligarchic parties are either defeated or brushed aside into opposition. In this respect, Zatlers’s decision to dissolve the parliament has paid off. On the other hand, there is much stability because the party system in Latvia has retained its main characteristics, i.e. new political parties are formed frequently, party membership bases are thin, the ethnic cleavage is still important in Latvian politics and each parliamentary election brings in new MPs who are largely unknown to the electorate. It remains to be seen whether the parties represented in the parliament will manage to soften the ethnic divide within the next three years and whether ZRP will prove capable of surviving its initial success.