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Latvia: Government Crisis Culminates In Premier's Resignation

By Peter Zvagulis

Prague, 29 July 1997 (RFE/RL) - The government crisis in Latvia, which began to intensify some two months ago, culminated yesterday with Prime Minister Andris Skele's resignation.

When Skele announced his intention to resign several days earlier, some Latvian leaders responded with sharp criticism of his performance as premier.

Foreign Minister Valdis Birkavs of Latvia's Way commented that "there is only one person in the country who would not admit his mistakes," meaning Skele. President Guntis Ulmanis sounded a more conciliatory note, saying that "the Latvian government [would have had] broad opportunities to continue to work under the leadership of Prime Minister Andris Skele."

The reasons for the government crisis are to be found within the government rather than in its performance on economic or social issues. The confrontation between the seven government parties and the prime minister had deepened signficantly of late. There were shady financial deals involving the state-owned companies Latvenergo and Ventspils Nafta as well as the Banka Baltija, which has since gone bankrupt. And it was alleged that Skele himself was involved in the misappropriation of G-24 credits, although he was later cleared of any involvement following an investigation. Even the recent European Commission's decision not to include Latvia among those countries invited to begin EU membership talks may have helped exacerbate the crisis.

To make matters worse, five ministers have resigned over the past two months, four of whom were accused of violating the anti-corruption law: Roberts Dilba (agriculture), Rihards Piks (culture), Juris Vinkelis (health care), and Vilis Kristopans (transportation). Some of the accused had failed to state all their assets and business activities when filling out income declarations. None, however, was charged with any crime; and statements issued by the Prosecutor-General's Office failed to make clear whether or not the ministers were guilty. The fifth minister, Dainis Turlais, resigned the internal affairs portfolio over the fatal accident in the western town of Talsi on 28 June in which eight children were killed and 22 injured during a fire fighters' show.

In December 1995, Skele became head of the coalition government largely because he did not belong to any political party. Now, his non-affiliation is being cited as the reason why he came under pressure to step down. It may well be that Skele's political influence had grown to such an extent that political parties no longer considered him to be as neutral as he was in 1995. Moreover, they may have seen him as concentrating too much political power in his own hands.

Over the past year, some parliamentary deputies had expressed dissatisfaction with what they called the Rundemocratic tendencies' of Skele's government methods. Skele, for his part, pointed out that his reform-oriented economic program was extremely successful. During his term in office, the country's budget deficit of 90 million lats ($158 million) changed into a budget surplus totaling 30 million lats.

As a politician, Skele has a record of making unexpected moves. In January, he surprised his supporters and opponents alike by tendering his resignation following opposition within the cabinet to his candidate for finance minister. That move proved successful, since Skele was able to increase his popular support and form a new government.

When the scandal over violations of the anti-corruption law began to emerge, he surprised everyone again by his reaction. Instead of threatening to resign, he went on national television to express his moral stance and to make clear that he would not cover up for any minister who had broken the law. The announcement last week of a government recovery plan was his last surprise move as prime minister. It was designed to gain time for himself and to test the will of the coalition parties to save the government.

Following negotiations between the ruling parties and consultations with President Guntis Ulmanis, Economics Minister Guntars Krasts of the right-of-center Fatherland and Freedom party was nominated as Skele's successor. Born in 1957, Krasts graduated from the Economics Faculty of the University of Latvia. He has held several research posts and was a Riga municipal official before becoming minister of economics in December 1995.

Some analysts speculate that one of the reasons for nominating Krasts as premier is that the ruling parties consider him less ambitious than his predecessor. The Economics Ministry seems likely to go to the left-of center Democratic Party Saimnieks in return for its support of Krasts's candidacy as prime minister. Krasts has already said that the government lineup is likely to remain more or less unchanged. In any case, it seems a relatively safe bet that Birkavs will remain foreign minister.

(The author is director of RFE/RL's Latvian Service.)