VZCZCXYZ0019
RR RUEHWEB

DE RUEHRA #0246/01 0971541
ZNR UUUUU ZZH
R 071541Z APR 06
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC 2814
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS RIGA 000246 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EUR/NB 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL LG
SUBJECT: LATVIA TO CONTINUE WITH MINORITY GOVERNMENT AS 
LARGEST COALITION PARTY WALKS OUT 
 
SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET DISTRIBUTION. 
 
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SUMMARY 
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¶1. (SBU) Prime Minister Aigars Kalvitis now leads a minority 
government.  The New Era party, the governing coalition's 
largest, left the government April 7 in the culmination of a 
three-week government crisis characterized by competing 
claims of corruption and government malfeasance.  New Era 
left the coalition after issuing an ultimatum to PM Kalvitis 
demanding the ouster of the First Party, whose leader was 
fired as Transport Minister in the wake of a recent vote- 
buying scandal.  The First Party, New Era claimed, used its 
control of Latvia's Interior Ministry to open a retaliatory 
criminal investigation against New Era's Economics Minister. 
New Era gave up six ministries when it left the coalition, 
including the influential Defense, Economics, and Justice 
portfolios.  The GOL's truncated three-party coalition 
commands just 45 seats in the 100-seat Saeima (parliament). 
The focus now turns to whether PM Kalvitis can convince 
another party to join his government and whether he can rely 
on opposition support to confirm nominees to vacated 
ministerial posts.  End Summary. 
 
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QUESTIONABLE PROBE PROMPTS JL TO LEAVE GOVERNMENT 
--------------------------------------------- ---- 
 
¶2. (U) Prime Minister Kalvitis' (the People's Party) and 
President Vike-Freiberga's last-ditch efforts on April 6 to 
persuade the New Era party to stay in the coalition failed 
April 6, when six New Era ministers quit the government, 
leaving in place a three-party minority government 
(consisting of the People's Party, the First Party and the 
Greens' and Farmers' Union). New Era was angered that a 
criminal probe had been launched earlier this week against 
its Economics Minister, Krisjanis Karins, over alleged 
irregularities in awarding EU structural funds to a company 
that had donated money to New Era.  New Era claimed the 
criminal investigation was political payback on the part of 
the First Party for the recent dismissal of Transport 
Minister Ainars Slesers, who was implicated in a vote-buying 
scandal in the city of Jurmala (a Riga suburb). The Prime 
Minister had fired Slesers at the insistence of New Era. 
 
¶3. (U) New Era April 2 gave the Prime Minister an ultimatum: 
either boot the First Party out of the coalition or face New 
Era's departure.  PM Kalvitis rejected New Era's demand, 
urging all factions to continue working in the government. 
New Era leader Einars Repse, however, called the criminal 
probe an abuse of power by the First Party "for which the 
First Party should bear responsibility."  In the end, the 
sides could not be reconciled, and Repse announced the 
evening of April 6 that it was quitting the government. 
 
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GOVERNMENT LIMPS ON, PM LOOKS TO BRING IN RIGHT-WING PARTY 
--------------------------------------------- ------------- 
 
¶4. (SBU) Even though New Era's departure is a serious blow 
to the government's stability, most political pundits 
believe that Prime Minister Kalvitis can manage to muster 
the necessary opposition support to carry on with a minority 
government, as well as confirm rather quickly what are now 
seven vacant ministerial jobs (the Transport Minister's 
post, which was left empty by Slesers' ouster, and the six 
New Era portfolios vacated yesterday).  The nationalist 
opposition party Fatherland and Freedom/LNNK (7 seats in the 
Saeima) and two out of three independents could provide 
Kalvitis with the support to limp on.  In an April 5 meeting 
with Ambassador Bailey, Kalvitis suggested that he already 
had agreement from Fatherland and Freedom to join his 
government if New Era left, but there have been no official 
announcement of this yet. 
 
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COALITION DIVYING UP MINISTRY POSITIONS 
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¶5. (SBU) The three coalition parties have already begun 
consultations on how to divide the cabinet portfolios.  Left 
vacant by New Era's departure are the Defense, Economics, 
Justice, Education, Social Integration and e-Government 
Ministries.  No successors to these have officially been put 
forward yet yet, though Kalvitis suggested to Ambassador 
Bailey April 5 that Karins' successor in the Economics 
 
Ministry could be current PM economic advisor Aigars 
Stockenbergs, and Embassy contacts in the Saeima are 
pointing to People's Party Chairman Atis Slakteris as the 
most likely candidate to become the next Defense Minister. 
[NOTE: Slakteris was Defense Minister in the government of 
Indulis Emsis in 2004. End Note.] According to several 
parliamentary sources, a special session of parliament might 
be called as early as this weekend to hold a confirmation 
vote for new ministers. 
 
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COMMENT 
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6 (SBU).  There is also much speculation as to what really 
prompted New Era to leave the government. Some analysts 
suggest that New Era, the most popular party in the latest 
opinion polls, hoped to gain itself maximum room for 
maneuver in reading for the October 2006 Saeima 
(parliamentary) elections.  Now outside the government, New 
Era can criticize "corrupt" political opponents freely. 
Regardless of motives and timing, Ambassador Bailey this 
week pointed out to both PM Kalvitis and Repse that they 
need to remember that they are playing to more than a 
domestic audience.  Latvia's leaders, cautioned Ambassador 
Bailey, need to remember that their actions are being 
scrutinized by many outside Latvia, including Allies and 
business partners, and that these groups are looking for 
leadership, accountability, and the ability to govern as 
Latvia takes on high profile events this year like an 
approaching trade and investment conference targeted at U.S. 
companies, not to mention the NATO Summit. End Comment. 
BAILEY