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Sunday, February 22, 2009

Latvia: Another Government Falls

Latvian Government Resigns as Recession Deepens (Update2): "Latvia’s four-party coalition government, facing the steepest economic decline in the European Union and plunging public opinion ratings, resigned after two parties called for Prime Minister Ivars Godmanis to step down.

President Valdis Zatlers told a news conference in Riga today that he had accepted the resignation and that talks on forming a new government would begin next week, which coincides with the visit of an International Monetary Fund mission.

“I will continue to work and guide this government until a new one can be formed,” Godmanis, 57, who has led the coalition since December 2007, said. It was the second government to resign in Europe during the economic crisis after Iceland.

East Europe has been battered by the global financial crisis, which is curbing demand for their exports while shutting off credit and investment. Gross domestic product in Latvia, which has had 14 governments since breaking from Soviet rule in 1991, contracted 10.5 percent in the fourth quarter. The country followed Ukraine, Serbia and Hungary in seeking international aid when it lined up 7.5 billion euros ($9.5 billion) in loans from a group led by the IMF in December."

Street violence is just street violence... until it isn't. This occurs when the people finally coalesce around a new leader and a new ideal. Then they unceremoniously overturn in it's entirety the old order... with all the chaos and violence that that entails.

"The deepening economic crisis has sparked the worst street violence since independence, when hundreds rioted in Riga’s old city, smashing windows and battling police after a peaceful anti- government demonstration of about 10,000 people on Jan. 13 had dissolved."

10 000 protestors of a population of about 2.2 million is actually pretty serious. For context, about 15 292 500 protestors would have to descend upon Washington to field the same relative numbers...

The serious riots started on January 13th 2009, and then grew more serious on January 16th, 2009 . By February 20th 2009 the government was done.

It would appear, that when the people finally have nothing left to lose they suddenly grow a pair.

Riots and unstable governments coming to a country near you: Up to 120,000 Protest in Recession Hit Ireland.

Related Posts:
Global Protests, Riots, Violence as Economies Unravel
Hyperinflation First, Then Global War
Global Violence, Gold: But Not Yet

18 comments:

Anonymous said...

hey these guys got out from under the Soviets thumb without heavy bloodshed - ask the Chechens if that's easy - and throwing out a incompetent bunch of so-called "free-marketeers"? That's something the Americans should do, maybe...
Well, let's say it is unlikely that Latvia would 'go communist' with their recent experience of it, and that this type of change of government does not imply that Latvia's democracy is broken: rather, it is normal in a parliamentary system for "governments to fall" as a result of changes in the "real world". So more coalition building until elections, which will happen if a coalition cannot be built.
We'll see when or if the Americans actually change their government- difficult to see a difference in outcome in the future, if they continue to follow the policies of the past. And as we all know, presidents preach "continuity" as to foreign policy: now domestic policy too, it appears.
A pity that the Americans Government cannot be changed so easily: it appears they're stuck with the same gov no matter how badly it performs, until the next shceduled election. Kinda dictatorial, if the president's Cabinet and senate are always filled with wealthy goons from the same families.
That is , American political stability may be contrary to good government, if it prevents bad policy from being changed.
In other words the latvian gov left because the latvians wanted it to go. Americans seem to be stuck with Republican or Republican-lite, no matter what the average joe feels.

Anonymous said...

"when it lined up 7.5 billion euros ($9.5 billion) in loans from a group led by the IMF in December.""

This is the Mafia arm of the US government, they got this country and it's citizens by the balls just like what happened in Latin America.

Anonymous said...

Latin America?
Latvians are not illiterate campesinos living in isolated valleys.
How many outsiders speak Latvian? D'ya think the Latvians might talk amongst themselves if some foreign "mafia" tries to put the screws on them?
latvia is in the heart of northern Europe, and the Swedes who hold their mortgages are not about to support/create a torture state across the baltis from Stockholm.
Latvia is not El Salvador - the only have one-seventh of its population!

dougiefreshhh said...

Ben:

Thanks for the post.

How about some scary fed chart reviews? Been a while, no?

Watching asia tonight.... if gold can hit and hold over 1000, could get interesting...

Anonymous said...

"latvia is in the heart of northern Europe, and the Swedes who hold their mortgages are not about to support/create a torture state across the baltis from Stockholm."

It won't matter what the Sedes want neither side will have choice in the matter.

Anonymous said...

Bah. People always have a choice: states only have jurisdiction over our bodies.

Anonymous said...

Interesting how the baltic countries have been heralded as great success stories due to the flat tax. Looking at the budget deficits I doubt flat tax will survive much longer.

Anonymous said...

@Anonymous #1, you think Latvians should be the ones spreading democracy around the world, rather than americans?

Anonymous said...

Perhaps they'll compete with their teachers for the laurels as to who lives more democratically.
Anyhow, there's nothing "democratic' about how people spend their own money.
And democracy is more practical in a state of one million, rather thana state of 300 millions.

Anonymous said...

As to the flat tax, they can just temporarily hike the rate, rather than introduce complexity.
Their budget deficits for 2008, about 2-3% of GDP, is not so bad as the USA's. And they are in absolute terms tiny relative to the elephantine requirements of the USA.

Early Withdrawal said...

Ben - you saw on WSJ Citibank is begging for mercy

http://online.wsj.com/article/SB123535148618845005.html

Anonymous said...

Ah. It looks like defending their pegs is costing them their reserves.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aW7Voe3QaHX8&refer=news

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