The Green Dragon Lady claims a posse or a platoon

So now the monkey wrench flies toward the gears of Latvia’s movement toward the Eurozone. Whether it hits and stops the wheels, we will see next week. However, it is hard to believe that Saeima deputy Iveta Grigule (Green/Farmers’ Union – ZZS) would go out on a risky limb and groundlessly claim that she has the 34 Saeima deputy signatures pledged that are needed to ask the president either to refuse to sign the law on adoption of the euro or submit it for a referendum, first gathering the signatures of at least 10% of the electorate.

The start of that process alone, even if it ultimately fails (insufficient signatures or the euro law is approved), is a major threat to the process of euro adoption, as has been pointed out earlier. In addition, there is yet another threat – that the whole attempt to block the law can trigger a kind of constitutional crisis in Latvia. Grigule has said that if President Andris Bērziņš refuses to act on the request by at least 34 deputies, she will take her case to Latvia’s Constitutional Court. Bērziņš could refuse, citing Article 68 of the Latvian Constitution, which requires at least 50 parliamentarians’ signatures if the disputed legislative act affects Latvia’s foreign relations and treaty obligations. In this case, it could be argued that rejecting the law on euro adoption is the same as backing out of the commitment made to eventually adopt the euro when Latvia joined the European Union (EU) in 2004.

Pro-euro politicians, including Latvian Prime Minister Valdis Dombrovskis, have argued that by passing laws regulating the practical and technical side of the switch from lats to euro, Latvia is simply fulfilling a commitment it implicitly made when the electorate voted in favor of joining the EU in 2003. The euro itself was not on the ballot, it was a yes or no to the EU, but the treaty Latvia signed committed it to adopting the euro when it met the Maastricht criteria, which it now seems to be doing after failing to do so in 2008 and 2011.

It is interesting how the issue would be framed before the Constitutional Court (and I am no expert on Latvian constitutional law). It seems that the Court would have to rule, explicitly or implicitly, on whether there was a Latvian treaty commitment to adopt the euro, which could be changed by a referendum rejecting the implementation law. The president’s rejection of a petition by less than 50 Saeima deputies would also mean that Bērziņš at least implicitly supports this interpretation. After all, if no international treaty commitment by Latvia would be affected by a potential referendum, then there was no commitment in force. The same if the court rules against Bērziņš. In effect, the issue of whether Latvia already “voted” to adopt the euro when it joined the EU and would be substantially modifying this commitment by stopping the implementation law,  or whether there was no such commitment, will end up decided by the Constitutional Court.

So far, so good for Iveta Grigule, who has become the opposition’s Dragon Lady to the coalition government and has probably lured Jānis Dombrava of the National Alliance to her lair. But what happens next, when Latvia is cast into the murky ozone as far as its relationship with the euro in general? After all, if there are no immediate or even medium-term plans to adopt the euro, then the lat could come under various kinds of pressure. If uncertainty jacks up interest rates and yields on the relatively few Latvian interest-bearing instruments available to foreign investors (or investors in general) rise, the lat could surge. Or it could plunge on uncertainty, fear and paranoia. How many millions is the Bank of Latvia ready to spend to stabilize the currency, and by what targets or standards? To keep it in a narrow ERM II corridor when being in the ERM II regime is in question?

No one seems to have a “we just postponed the euro indefinitely” scenario for a managed float of the lat – pegged to what?  Or not pegged, dancing around, to translate a (off)colorful Latvian expression – like a fart in a frying pan (kā pirdiens uz pannas)? All of these issues may come into focus next week, if the Dragon Lady gets her way. Question is – will the dragon be able to blow out any dangerous fires it sets? 

FYI: A platoon is a military unit typically composed of two to four sections or squads and containing 26 to 50 soldiers. The Dragon Lady claims she has her platoon,

Dear Latvian readers: the Green Dragon here has nothing to do with the national sport of alcoholism (zaļais pūķis). No such reference to Deputy Grigule is intended. 

The euro implementation vote is only the start

Latvia’s parliament, the Saeima, passed a law setting out the technical procedures for switching from its national currency the lat to the euro on January 1, 2014, assuming that it succeeds in getting the green light for admission to the Eurozone from the European Commission and the European Central Bank. 

The vote was a bare majority of 52 to 40, with one parliamentarian from the National Alliance, part of the governing coalition, Jānis Dombrava, voting against in what was permitted as a “vote based on conscience”. Just late last year, the National Alliance shook the coalition by suggesting it could oppose the euro (backing off from its early official position in favor of joining the eurozone). 

However, there could still be obstacles to a smooth entry. There is a less than trivial possibility that opposition Harmony Center will get three more parliamentarians (in addition to their own 31) to get the necessary 34 votes to request President Andris Bērziņš to initiate a referendum on whether Latvia should adopt the euro.

Saeima deputy Iveta Grigule of the opposition Green/Farmers’ Alliance (ZZS) said she would urge the other 12 members of her party in the Saeima to sign. ZZS faction leader Augusts Brigmanis had earlier said no one from the ZZS would sign.

Once the referendum ball gets rolling, Latvia would, like an airline unsure of its estimated time of arrival, lose the January 1, 2014 “slot” for joining the Eurozone. While Latvia has missed opportunities before in 2008 and 2011, when it did not fully meet the Maastricht criteria, it could also lose the current “window” of Maastricht compliant economic indicators. As Morten Hansen, an economist who teaches at the Stockholm School of Economics recently pointed out; Latvia’s export-driven economic growth could soon boost inflation above Maastricht limits. Assuming the country maintains steady, non-credit fueled high growth and moderate wage and price rises, this could have the paradoxical effect of shutting the Maastricht window on an otherwise sound economy.

This is what is at stake – indefinite postponement of euro adoption while still keeping the lat as a “virtual euro” pegged at 0.702 santims per euro unless someone comes up with a better idea. Indeed, if the idea of the parliamentary opposition is to back away from the Eurozone indefinitely, it might be wise to consider an alternative managed float for the lat, but this is not being discussed. Mostly, the debate has been framed in terms of avoiding various economic “cataclysms” such as a post-adoption jump in consumer prices, poor competitiveness that can no longer be counteracted by monetary policy (not that it could before, with no room for devaluation under the present very tight corridor) and demands to “pay the bills” of other wealthier, but economically more troubled Eurozone countries (the example is made that unemployed Greeks collect far more in benefits than a Latvian can earn working at a normal job).

A strong undercurrent of the anti-euro arguments is nationalism – the lat, launched in the 1920s from a menagerie of interim currencies and World War I occupation scrip – was replaced by the Soviet ruble in 1940 and reappeared again in 1993. Between the time Latvia regained its independence in 1991 and the re-launch of the lat, Latvian rubles were used and given the nickname of “repshies” after the then Governor of the Bank of Latvia Einārs Repše. For many Latvians the currency is a symbol of national sovereignty, like the red-white-red flag, also repressed under the Soviet occupation and carried out into the light again by some daring individuals during the perestroika period of the late 1980s. Latvians still recall the emotional raising of the red-white-red standard over what is now the Presidential Palace in 1988, on November 11, a pre-war day of remembrance for those who died in Latvia’s war for independence from 1918-1920.

If the opposition parliamentarians fail to get the referendum ball rolling, they can try to collect 30 000 signatures to initiate a referendum from below. Here they may get some sinister allies – among them, the “Antiglobalists” demanding Latvia re-instate the death penalty for “economic crimes” and, by the way, calling most of what has happened over the past 20 years a string of such crimes.

Point two of the Antiglobalists 2010 program calls for “starting a Nuremburg trial against those persons, by whose action or inaction over the past 20 years, the economic destruction and looting of Latvia took place and for political decisions, that harmed the Latvian state and nation.”

In other parts of the manifesto, the Antiglobalists call for a protectionist, autarkic and state-controlled economic system that, of necessity, implies Latvia’s exit from the European Union (EU) and, probably, from several international trade treaties.

Another bizarre addition to the extraparliamentary opposition to the euro is the “Gustavs Celmiņš Center”, which is a revived inter-war Latvian fascist movement under the name of its founder and leader Gustavs Celmiņš, who despite his sympathies for the Italian and German dictatorships of the 1930s, ended up in a German concentration camp. Celmiņš was liberated by US troops from another camp in Austria where he was held at the end of the war. Thereafter, according to Wikipedia, in 1949 he emigrated to the United States. From 1950 to 1952 he was an instructor at Syracuse University's Armed Forces school in New York State, and beginning in 1951 he was also the director of the Foreign Language program for the US Air Force, and a television lecturer about the USSR and communism. From 1954 to 1956 he worked as a manufacturer in Mexico. Between 1956 and 1958 he was a librarian at Trinity University in San Antonio, Texas. In 1959 he became a professor of Russian studies at St. Mary's University in San Antonio, Texas. He died on 10 April 1968 in San Antonio, Texas.

As far as is known, Celmiņš steered clear of neo-Nazis in the US and actually began sabotaging the recruitment of Latvian Auxiliary Police that he was entrusted to do  during the German occupation, when it became clear some of these units would be used against civilians, including Jews.  Celmiņš modern-day fan club is openly anti-Semitic and its present leader Igors Šiškins (a Latvian despite his Slavic name), has served time for attempting to blow up the Soviet-era victory monument in Riga (the blast failed to seriously damage the monument).

Also forming a group within the Saeima to defend the lat are several deputies, led by Nikolajs Kabanovs of Harmony Center, whom many see as unsympathetic to “Latvian” causes. In effect, a strange informal alliance has formed between “pro-Russian” (an ethnic Russian) Kabanovs and the “renegade” nationalist Dombrava (Prime Minister Valdis Dombrovskis Unity Party has demanded an explanation and, possibly, sanctions for the young nationalist’s breach with coalition discipline).

My take is that if the parliamentarians don’t trigger a referendum, the loonazoids of the broader anti-euro movement are unlikely to be the ones on the front lines of gathering 30 000 signatures. Sociological studies show that Latvian society is conservative, politically authoritarian and economically statist/socialist, but most ordinary people would draw the line at throwing their signatures in with Šiškins or Kabanovs. The Antiglobalists ….perhaps.

Latvian parliament to vote on a euro implementation law

Latvia’s parliament, the Saeima, is expected today to pass a draft law on implementing Latvia’s planned adoption of the euro on January 1, 2014, but that will not remove some potentially dangerous stumbling blocks to the Baltic nation joining the Eurozone. The text of the law concerns a range of practical and technical issues in switching from the lat to the euro, but both proponents and opponents of adopting the euro consider it to be milestone legislation. 

Opponents of abandoning Latvia’s national currency, the lat, have called for a protest rally in front of the parliament building in the Old Town of the capital Riga.

A more serious potential threat is that opposition parliamentarians are trying to get at least 34 Saeima deputies to petition the President, Andris Bērziņš, to refuse to sign the law and trigger a referendum on the euro issue. 31 members of the leftist opposition Harmony Center have indicated they will sign the petition, while the Green/Farmers Union is split on whether to push for a referendum on joining the Eurozone. If only three deputies join the euro opponents, it would trigger a referendum initiative, which would derail adoption of the euro in 2014 regardless of the outcome of a popular vote.

As Prime Minister Valdis Dombrovskis pointed out on a TV talk show last night, Latvia has already missed two windows of opportunity to adopt the euro in 2008 and 2011, when the country’s key economic indictor failed to meet the Maastricht criteria.  Latvia can’t miss another chance now that it does meet key Maastricht criteria.

In a call-in vote to Latvian Television, in which just over 9000 viewers could vote yes or no on adopting the euro, the yes side won by only about 50 votes, a signal that while support for the euro may be rising, the voting public could split down the middle if allowed to choose.

Dombrovskis and other euro advocates maintain that by voting in a referendum to join the EU in 2003, the Latvian electorate also voted to join the Eurozone as part of the EU treaty to which it acceded.

Euro (as in currency) skeptics are a diverse, sometimes strange bedfellows, ranging from neo-fascists to “antiglobalists” calling for restoring the death penalty for those they blame for Latvia’s economic setbacks to the “autonomous resistance group” which sounds like a West European anarchist movement and the “Left Patriots”.

Much anti-euro rhetoric is based on claims that joining the euro will destroy another vestige and symbol of Latvian national sovereignty and appeals to nationalist sentiments and emotions

In last night’s TV discussion, entrepreneur and economist Jānis Ošlejs vigorously debated the Prime Minister, saying that Latvia should not join the Eurozone until it was running a trade surplus with Eurozone countries and had significantly increased the proportion of foreign investments going into export-oriented manufacturing rather than the financial sector and real estate. He said Latvia was at risk from offshore Russian capital and likened the country to Cyprus, where banks also host large non-resident deposits.

Ošlejs said that the record of “weak” countries in the EU was poor and Latvia would follow in their tracks if it adopted the euro before restructuring its own economy in favor of manufacturing.

            Dombrovskis replied that nations outside the Eurozone had also suffered economic crisis and recession and the euro could hardly be blamed for that. He also opposed claims that joining the Eurozone would boost inflation, pointing out that inflation in Latvia peaked during the credit-boom run-up to the crisis in 2008.

The anti-euro side has not presented an alternative to the current narrow-corridor peg of the lat to the euro. If one rejects the euro on nationalist grounds or because of fears that (despite a seeming respite) the Eurozone could fall apart, the currency should have an alternative peg or managed float strategy, perhaps against a basket of Scandinavian currencies or the “hard” euro that may remain after a scenario in which Greece and, perhaps, Spain are forced to leave the Eurozone. It this lack of a reasoned alternative scenario that may swing public opinion (including businesses anticipating lower transaction and credit costs and young people who have traveled, studied and lived in countries with the euro) to reluctantly back switching currencies on January 1, 2014.

One "balagāns" is over, the next one starts

And so the big balagāns (slighty tawdry carnival) of the extraordinary Saeima elections is over and the outcome is much as could be expected. The only thing that did not happen is that Harmony Center (SC) didn't get the big gain in seats that some pollsters predicted, and that would have allowed it to make a coalition wih the severely depleted Green and Farmers' Union (ZZS) of the “oligarch” Aivars Lembergs. The SC, which has been called both “ pro-Russian” and “social democratic”, gained only two seats for a total of 31. The ZZS was cut down to 13 seats in the Saeima, but with the SC failing to make the gains that some had predicted for it, there is no way that the two of them together can make the populist, corruption-tolerant coalition that would have been possible if the list led by Riga mayor Nils Ušakovs had gained at least 38 seats (for a bare majority together with ZZS).

What is possible now is a number of unstable coalitions. One is to put together 51 seats with prime minister Valdis Dombrovskis' Unity (V) and SC, which would need a good reason for excluding the Zatlers' Reform Party (ZRP). It would also put the strongest member, SC, in a technically dominant role against the more politically experienced, but “defeated” V. A strong coalition in terms of numbers would put the top three winners together and gather 73 seats, making it possible to pass almost any “reforms”, including changes to the constitution (Satversme).

In such a coalition, the two centrist-liberal parties with 42 votes among them would be dominant, though perhaps as a two-headed alpha dog. If one “discounts” the SC, then the ZRP has good reason to consider itself the real “winner” of the election, having come from nothing to 22 seats in the Saeima, ahead of V with its depleted 20 seats. Vienotība, itself an amalgam of three parties, can still consider itself most experienced at government (which ZRP is not), and besides, ZRP is just an accidental clone of itself, isn't it? Seeing things that way, the real winner is the center-liberal block, the unintentional seeming twins V and ZRP, with 42 votes, just a few short of a majority.

That is where the Nationalist Alliance (NA) with is long title of All for Latvia!-For Fatherland & Freedom/Latvian National Independence Movement could fit very nicely to make a government backed by 56 votes in the Saeima. There is just one problem – the NA knows they are the keystone that holds together the edifice of a “non-Russian” and nominally non-leftist (the NA actually supports protectionism and state ownership, but nevermind...). This gives the nationalists undue leverage, which would be problematic enough if the NA could keep some of its loose cannon from rolling around the deck and firing at the wrong time.

For a while it looked like one of the cannon, a young lawyer named Jānis Iesalnieks, had been lashed down after stating in social media that multiculturalism in Norway was really to blame for the bombing and massacre staged in July by Anders Breivik. Iesalnieks agreed not to run for the Saeima on the NA ticket, something he and All for Latvia (VL) had intended. But just after the election, Iesalnieks resurfaced and engaged SC's candidate for prime minister, Riga mayor Nils Ušakovs, in a duel on Twitter, saying that most of the people who voted for SC (as Latvian citizens) were really an illegitimate colonial population. Ušakovs wrote to VL's leader Raivis Dzintars, who was elected to the new Saeima, demanding an explanation. Dzintars responded that Iesalnieks arguments, based on the Geneva Convention articles about settlers in occupied territories were sound, but that VL and the NA did not support acrimony between the Latvians and Russians on an everyday level. This was a position that could effectively exclude the NA from any coalition with V and the ZRP, especially as the latter has said one of its purposes was to bridge the ethnic rift in Latvian society.

While the NA is unyielding in its hard-line position, the SC has apparently show readiness to retreat from its contrarian, populist or as some politely called it – social democratic policies. In order to join a possible grand coalition, the SC has indicated it will go along with a 2012 budget deficit that will get Latvia into the eurozone under the Maastricht criteria in 2014. It also has, by implication, backed off from suggesting that it wants to extend repayment (by refinancing on the market) of Latvia's loans from the International Monetary Fund (IMF) and other lenders. Ušakovs also made a low-key concession over the weekend, telling a conference that he considered Latvia to have been an occupied country during the Soviet era, but that no one today should be considered an occupier (Latvians use the term okupants or “occupant” – the biggest single addressee for junk mail in the US until /not-so/ sophisticated computer mailing systems personalized each letter). If you ask me, you will see cows dancing ballet on their hind legs by the Freedom Monument in Riga before Nils Ušakovs statement on “occupation” gets the NA to join any government with the SC in it. The reason for this was more likely to make a gesture toward the ZRP and V, who are also sensitive to anyone treating 50 years of totalitarian rule as some kind of mistake in international affairs or an “annexation” agreed to by a government in 1940 terrified by thousands of Soviet tanks and soldiers at (and to a great deal, within) its borders.

Having said that, the quick retreat from apparent “principles” (pasted to the backs of half of the busses in Riga) does not bode well for the SC as a reliable partner to the ZRP and V. Shapeshifters never are. As one former Riga hand said recently over a beer while visiting town, it's all about getting into power for the SC, never about any principles. That makes it a very much “Latvian” and old-style party, much like the sordidly defeated ZZS.

Oh yes – Vienotība and the ZRP are already kicking each other under the table while still trying to smile, because ZRP apparently went to a meeting with the SC without taking its slightly smaller twin along. And already during election eve, a carrot-topped iron lady from V was ranting that Zatlers was a liar because he had extended feelers to the SC even as the ballot boxes were being being sealed and taken away to be counted and exit polls were hitting the newswires showing who would be boss.

A merry few weeks are ahead for all. Book your Ryanair seats now for the opening of parliament (air Baltic may well have gone to the dogs by then, the government may just dump it on the mysterious minority shareholders rather than put up to LVL 60 million, maybe more, into a rathole in the skies).

Latvia Heading for a populruppted or corruplistic government?

The Latvian affiliate of the German-based market research and polling company GfK has published a poll indicating that the Harmony Center (Saskaņas centrs/SC) will get 41 seats in the extraordinary Saeima elections to be held in less than a week. In the last elections to the 10^th Saeim,, GfK accurately predicted that SC would get 29 seats, which gives considerable credibility to their latest forecast.

The poll also sees the Green and Farmers Union (Zaļu un zemnieku savienība/ZZS) getting 13 seats down from 22, Unity (Vienotiba/V) would get 21 seats (down from 33), Zatlers' Reform Party (ZRP) would get 18 seats (as a new party, no prior presence), and the nationalist National Alliance (Visu Latvija-Tēvzeme un Brīviba-LNNK /NA) -seven seats.

The only combination that “works” from these forecast results is a coalition of SC and ZZS, easily getting 53 votes (or more, if support for the ZZS is stronger than anticipated). The resulting government will be populist – with the SC advocating more spending for pensions and social programs (even at the risk of expanding the budget deficit) and “corruption-tolerant” with the ZZS still holding out hopes that its backer and “eminence grise”, Ventspils mayor Aivars Lembergs, who face criminal charges for economic crimes, will someday be prime minister. Hence the idea that the government will be populruppted or corruplistic, combining the words populist and corrupted.

The SC and Lembergs have both entertained the idea of renegotiating Latvia's deal with the International Monetary Fund (IMF) in the vain hope of extending Latvia's very favorable credit terms (never mind that the IMF has not given any new loans at the same low rates) rather than re-financing the loans and going back to the market. Even if it worked, it would mean continued austerity, something at odds with the SC's attempts to be social-democratic.

The ZZS, a party ready to go in bed with almost anyone in order to stay in government, will continue to shield state-capture and corruption, though perhaps with less vigor since the SC will want to keep a relatively “clean” image. Indeed, one of the reasons people will probably vote for this party and forget the battles over “acknowledging the occupation” is that the SC has not, so far, been involved in any major corruption scandals (probably because it has been kept away from the trough by the bigger pigs).

Interestingly, Latvia will probably be praised for getting a government with its first ethnic Russian PM, Nils Ušakovs, a kind of Latvian version of Arnold Schwartzenegger – a politician of national scale who spoke the official language with a slight accent. There will also be well-grounded fears that an EU member state has been drawn further into Russia's sphere of influence, although the same could have been said about Germany and its pro-Russian policies some years back, for instance, regarding the Nordstream gas pipeline.

So, if the GfK poll and forecast are right, Latvia is heading for a change, putting the present government party in opposition, a different party and possibly an ethnic Russian prime minister in charge, and, after some years of slight progress in breaking away from corruption and free-spending, pedal-to-the metal government, a partial back-to-the future with populist spending and tolerance of, to put it mildly, politico-economic hanky-panky.

"Dismiss the Saeima" - an even brighter false dawn?

It finally happened. What has been chanted frequently in the street of Latvia's capital by larger or smaller crowds of demonstrators or picketers has at last been set in motion: Dismiss the Saeima(parliament)! Dismiss the Saeima!

After what can only be described as a partly depraved, largely cowardly “vote” by 37 abstentions to NOT lift the parliamentary immunity of oligarch Ainārs Šlesers so that a court authorized search of his residences could be conducted, President Valdis Zatlers probably did the right thing. It was the second major event after the January 13, 2009 riots that made the ruling elite wake up to “a new Latvia” the day after. Or so it seemed and seems.

The problem is that complete political depravity, incompetence, cluelessness etc. has become endemic to Latvia and one need not have a “wake-up call” event to discover that. It has been going on with various degrees of intensity for 20 years. That is long enough to conclude that the “symptoms” are not temporary, transitory (as in side effects of transition from the Soviet system) or even easily curable, if at all. The inability to rule itself with out massive self-plunder and waste of resources given in good faith by (starting with G-24 funds in the early 1990s, to EU Phare programs in some of which much was taught, little learned or applied, to EU funds the past few years) is no longer an anomaly of Latvia, it is a characteristic. It is what the anti-corruption police were fighting in their raids against the offices of the oligarchs Andris Šķēle and Aivars Lembergs and with the warrants to search Šlesers' residences. 

I doubt that this gesture by President Zatlers, who concisely and mildly defined the problem in his televised speech, will do very much to solve the problem. By bringing about new elections (a Saeima trusted by 10% of the population is unlikely to get referendum support) Zatlers has at least opened a very thin crack (not a window, we have been missing “windows” through 20 years and five elections) of opportunity for some kind of change.

The question is, who will carry out those changes? We have seen false dawns of reform, starting with the founding of New Era (Jaunais Laiks/JL), one of the components of the present Vienotība (Unity) alliance. That brought us the “golden hands” of the corrupt surgeon/Minister of Health appointed by the loopy Prime Minister Einars Repše, who at least decided to serve not having collected LVL 1 million (around USD 2 million ) in contributions for a personal fortune that he asked for. Not being as rich as he wanted to be didn't keep Repše from making huge crackpot investments (a luxury yacht ride business, real estate in the middle of nowhere) and borrowing money like a sheik who had spend too much time at the water pipe.

The JL government fell, paving the way for the good old boys of Aigars Kalvitis and the “fat years” to run the Latvian economy (with a little help from Swedish banks and a population that never learned the difference between loans and gifts) into the ground, leading to the present years of depression, stagnation and mass emigration. Then, in a surge of hope for which there was little basis, the 2010 elections brought in Vienotība, the new amalgam around JL (JL2 or JL and New Friends, were it a band). The previous administration, which was effectively “re-elected” unter the Vienotība banner, had already done much to make spending cuts with an axe and in a manner that demoralized and depleted vital public services rather than making them more efficient, leaner and meaner. Hundreds left the ranks of the police, there was probably much “negative selectivity” among other bureaucracies, with those hit by salary cuts but able to sell their education and skills elsewhere willingly moving on, most likely, out of Latvia. The medical professions (doctors, nurses) started a major bleed-off to other EU countries. All in all, the catastrophe and demoralization continued.

Vienotība also got in bed with the puppet party of oligarch Aivars Lembergs, the Green and Farmer's Union, in order to form a government and keep both the pro-Russian Harmony Center and the radical nationalist “ All for Latvia” in opposition. Even without mentioning the disunity preventing a quick unification of “Unity” into a single party, Vienotība has failed most expectations raised in the election campaign. It deserves to be run out of town, but probably with fewer dogs and pitchfork waving citizens chasing it than the other parties.

So one the euphoria fades after Zatler's speech and historical decree number 2 starting dismissal of the Saeima, what happens next? I don't see a solution. Many of the best and brightest have simply left the country for places where their efforts result in a better quality of life and where rational (though often flawed) governance is not an issue. The political elite, like a drunk someone is trying to deal with, has gotten another loud slap with a towel soaked in ice-water, but as we know, this doesn't make anyone less drunk. It will be interesting to see what new chimerical political creatures will appear over the next few months to drag what is left of the electorate into new illusory traps.

Maybe I am wrong, I am not on the scene at the moment (visiting the US for personal reasons), but I am not placing any hopeful bets.