Imagine that someone had stepped up to the bridge of the Titanic, relieved the captain and said: "The biggest mistake on this voyage was setting out with too few lifeboats and it was wrong not to sail south of these icebergs, as we just bumped one."
The next thing the replacement captain says is : "Of course, as things are now, we will sink and more than half the passengers will drown."
That is about how I see the nomination of the New Era (Jaunais Laiks/JL) Europarliamentarian Valdis Dombrovskis to form a new government.
Dombrovskis, 37, is a pretty smart guy (degrees in engineering and economics, including both education and research work abroad in the US and Germany) and probably honest and straightforward. That is why he said that one of the first tasks of his new government would be to reduce spending(i.e. the budget deficit) by 700 million LVL in order to comply with International Monetary Fund (IMF) terms for its loans to Latvia.
The Prime Minister designees statement comes on the heels of a report that Latvia's so-called social budget will have a shortfall of 300 million LVL. Unless Dombrovskis has added this into his figure (and Latvia has separated the "social budget"which is funded by social taxes on payrolls from the "state budget"), it looks like the country will be at least 1 billion LVL in the hole this year.
If the budget deficit is not cut by 700 million LVL, the country will essentially be bankrupt, Dombrovskis said. Although he called cutting pensions a "red line" that his government will not cross, the possibility has apparently been brought up by the IMF. Pot banging little old ladies in the streets -- thousands perhaps-- anyone? Or how about real wild in the streets riots with kids throwing stones and burning cars in support of their grannies?
In order for Dombrovskis to form a government, he will need the support of the largest parliamentary party, the People's Party(Tautas Partija/TP) plus a few other parties. In other words, most of the Ugly Humpty Dumpty that presided over the complete clusterf**k of the Latvian economy will have to be put back together again. That does not bode well, but probably there is no alternative.
JL also doesn't have a spectacular record. Formed as a clean government, new approach party that ran in the 2002 elections and won big support, it almost immediately stumbled when Prime Minister Einārs Repše appointed a Minister of Health, Āris Auders, who proved to be a double-dipping sleaze bag who had done state financed orthopedic operations while taking big-time tips in envelopes from his patients (for "his golden hands".) The new government in 2002 also sharply raised ministerial salaries without having done very much (in was only in office a few weeks).
Repše as PM also came across as more than flakey, with a penchant for odd-ball, home made light aircraft, a series of wacko investments with loads of (borrowed?) money and business ventures with one of his series of girlfriends (a 500 000 LVL yacht that would repay itself from rich charter customers sailing the smooth sunny waters of the Baltic -- well, not in February, nor eight or nine other months). Some of these ventures came after Repše was forced from office, but they reflect on his judgement and strangeness. It is rumored Dombrovskis wants him as Minister of Finance.
In addition, JL is a weakened party, with some of its leading members splitting off to form the Civic Union (Pilsoniskā Savienība/PS). Parts of the hatchet that was used for the chopping are still protruding above ground, rather badly buried out of the necessity of the present economic crisis.
Unfortunately, it appears will will, instead of the idiots running the country up t0 now, a non-idiot who can do almost nothing to prevent the inevitable consequences of his predecessor's actions. The captain of the Titanic, perhaps the last man to sign off on the log-book of the ship, can be formally held responsible for the sinking. Now the TP has passed the log book to Dombrovskis and the JL, so they can sign before the waves close over their heads. Smart move??