Latvian Government Resigns as Recession Deepens
Originally posted on Bloomberg
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.
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