Anti-euro crusader gets stiffed, now what?

And so it has come to naught. That is how Saeima deputy Iveta Grigule’s efforts to stop the euro implementation law ended, at least as far as using the right of 34 Saeima deputies to petition President Andris Bērziņš to refuse to sign the law into force and put it to a referendum. The short of it is, she was stiffed last Monday by the Harmony Center (SC), the party that seemed to have pledged 31 signatures. SC leader Jānis Urbanovičs said it would be “irresponsible” to block a law that had been passed by a majority of the Saeima. Not even renegade National Alliance (N) parliamentarian Jānis Dombrava was ready to put pen to paper to block a law he had voted against in breach of coalition discipline.

Grigule, despite being left high and dry and looking more than somewhat foolish, soldiers on, sending a letter to the president with a handful of signatures (I heard three) anyway and promising to make every effort to get 30 000 voter signatures for a referendum initiative.

As I pointed out earlier, the ZZS parliamentarian’s appeal and that made by many other euro opponents is largely emotional. There is some merit, however, to the emotionally appealing slogan that “the people should decide”. Democracy is a good thing, especially if it looks like a democratic decision made nearly ten years ago (and implicitly) in voting to join the EU may have been hasty on the aspect of joining the eurozone. National electorates should have the right to revise earlier decisions, especially if they see things going in the wrong direction. This is what the British  government under David Cameron is suggesting.

So far fine and good, but if there is going to be a referendum on the euro (unlikely as that  may be), there should be a solid plan for the “no” side. The “yes” side has it all planned out in the contested law, down to every detail. Unless the euro opponents – so far a motley crew of cranks, crackpots and a few sincere and respectable critics, such as the economist/entrepreneur Jānis Ošlejs – come up with a detailed plan for how the lat will be managed after breaking away from its Exchange Rate Mechanism II (ERM II) corridor with the euro, they will be no viable “no” alternative. To leave things as they are means to keep the lat as “virtual” euro, which is one of the pro-euro arguments – why not get the real thing?

What worries me about the eurozone is that its troubles may not be over. The Greeks have not fallen over the side, but they would not be missed, even if there was a knock-on effect on other economies, followed by a rush from northern Europe  to sip ouzo, drink retsina and vacation on the Greek islands for new drachma that cost a pittance in post-Grexit euro. The serious shit, to use a term I am sure many economists use over a beer, will start to happen when Spain and perhaps even France (the Economist, hardly a crackpot rag has mentioned this) start hitting serious turbulence. That is when a lot of countries will need a well-thought out plan B, perhaps regrouping around a D-mark 2.0, probably called the Nordeuro or something like that.

Unlike the Scandinavian countries that stayed out of the Eurozone, Latvia does not have a strong economy and  a prosperous society, therefore the lat will have to be linked to some other currency or currencies, in, at best, some kind of managed float. Those responsible for the “independent” monetary policy that euro opponents say they are defending will have to design and manage it. So far, it doesn’t look like anyone in Latvia has done so.

P.S. Sorry for writing this so after the fact. My day job and some translation work has kept me busy.  

Will weird deeds follow fighting words on the euro?

This coming week will get interesting as the anti-euro “Dragon Lady” and Saeima deputy Iveta Grigule asks those who pledged their support in an effort to block last week’s euro implementation law from coming into force to put ink to paper. At least 34 signatures are needed on a letter to President Andris Bērziņš asking him not to sign into force the law that was passed on January 31 and to initiate a process leading to what would amount to a referendum on the euro itself. After all, without a law specifying how the switch from the lat to the euro would be made around the turn of the year to 2014, it will be impossible to start using the euro as planned.

Over the weekend, the debate over whether to adopt the euro went into high, perhaps too high gear as Sarmīte Ēlerte, a former newspaper editor and Minister of Culture, presently a candidate for mayor of Riga on the Unity Party (V) ballot, said that Grigule’s initiative was just as harmful to Latvia’s interests as the failed referendum last spring to make Russian a second state language. It was also a statement that, in effect, lumped Grigule of the centrist Green/Farmers’ Union (ZZS) with the leftist-populist and allegedly pro-Russian Harmony Center (SC).

In response, Grigule said that Ēlerte was acting like a Soviet-era demagogue and sliding into a desperate “the euro at any cost” campaign. She claimed that countries such as Sweden and Denmark, both members of the European Union (EU), were economically doing well if not better than the Eurozone countries and that Poland and the Czech Republic were not rushing to adopt the multinational currency.

On her part, Ēlerte said that “the populists and the “reds” are trying to split society in order to stop Latvia’s development, gain votes in the municipal elections and stay in power in Latvia’s cities.”

Not to be outdone, Grigule fired back with a nationalist salvo: “ By making us abandon our own currency, the government is forcing us closer to a United States of Europe. In the renewed Latvia, a whole generation has grown up together with the lat. The grew up listening to their grandparents stories of the (interwar) free republic and the battles, about the silver five-lat coin handed down from generation to generation as a sacred talisman, a precious memory of those distant and dramatic times. When we think of the symbols of Latvian statehood, we think of the flag, the national anthem, the Latvian language, and also our own lat.”

Somehow the rapid shift from reasoned argument to hyperbolic accusations and pathos doesn’t surprise me but makes one wonder why both politicians are risking taking this tack. Grigule, should she fail to get her 34 signatures, would lose her quickly gained celebrity, something which the SC might think about before having all 31 of their parliamentarians running pen in hand to a potential political rival. If anything, Grigule’s nationalist appeal is aimed more at getting one, two, maybe more “Jānis Dombravas”  to bolt from the National Alliance (NA) (as Dombrava did by breaking with the coalition and voting against the euro implementation law, which passed anyway by 52 – 40). In any case, I suspect that a lot of SC voters, good citizens of Latvia, have more likely handed down some Czarist gold ruble coins in the family, not the silver “Milda”  coin from the 1930s.

While the 2014 Saeima elections are still far off, Grigule’s waving of the lat banknote-as-flag is a signal where the ZZS will seek their first political allies, hoping to be treated as politically respectable again after being pushed out of government because of their alleged close ties to the notorious oligarch and deposed Ventspils mayor Aivars Lembergs. ZZS was an uncomfortable partner for Prime Minister Valdis Dombrovskis (V) government but was pushed aside in the present coalition by the “anti-oligarch”  Reform Party. However, the Reform Party is effectively dead, garnering less than 5 % voter support in recent polls. Not the least, the once popular party founded by former President Valdis Zatlers, just after he dismissed the previous Saiema and was not re-elected, dug its own grave by a desperate effort to bring SC into the government at all costs. Zatlers (whose name was in the official party name until some time ago) even said that it would take “tanks” to break his determination to bring the populist and “pro-Russians” into government.

With Grigule talking like a “fellow traveler” of the NA, there could be some tactical advantage to SC double-crossing Grigule and making sure that she gets, say, just 33 signers (if you want more, pry some loose from the NA whose door you have been barking at). To be fair, the SC at least has unsucessfully resisted the euro implementation law by proposing to amend it with impossible conditionalities – LVL 300 minimum wage, LVL 600 median wage, unemployment under 5% -- fantasies, at best, from the mid-2020s.

It’s Sunday evening as I write, but it will be Monday soon and the fun can begin again.