Latvian centre-right government re-elected

LATVIA: Latvia's ruling centre-right alliance has become the first government to retain power in the Baltic state since it escaped the crumbling Soviet Union in 1991.

The People's Party of current prime minister Aigars Kalvitis won Saturday's ballot, claiming 23 of the parliament's 100 seats, and his three-party coalition took a total of 51 seats, six more than it has at the moment.

"I'm ready to continue to lead the government," said Mr Kalvitis.

"We will start negotiations with all right-centre parties. We have to be ready in one month," he added, noting that Latvia is due to host a summit of Nato leaders at the end of October.

The coalition's victory was seen as a vote of confidence in the parties that took Latvia into the European Union and Nato, as well as a desire for political continuity in a country that has had 12 governments in 15 years. "People are tired of frequent government changes," said Mr Kalvitis.

"They want stability and this is what we can and want to guarantee." The ballot also marked a breakthrough for the Harmony Centre party that draws support from many of the ethnic Russians who make up a third of Latvia's 2.3 million residents, and from Latvians who are tired of political sniping between the communities.

"Sooner or later, Latvian and Russian parties will have to co-operate more closely," said Mr Kalvitis. "And, in any case, Harmony Centre is not that far left. I'd call them more liberal or centrist." Used to helping unite fractious coalitions, president Vaira Vike-Freiberga said the confirmation by parliament of a prime minister and cabinet should happen much more quickly than with the last government, when it took six weeks.

"I think it will be a lot easier because all party leaders have expressed the desire to work together," she said. Turnout was estimated at about 62 per cent, in an election fought mainly over which parties could maintain Latvia's rapid economic growth and fight the high inflation that has forced the government to postpone adoption of the euro until after 2008.

While Latvians earn the least per head in the 25-member EU, foreign investment is helping to drive a dynamic economy that grew by 12 per cent in the first half of this year.

The growth has brought unemployment down to its lowest level since 1997, helped by the westward emigration since 2004 of up to 100,000 job-seeking Latvians.

Some analysts see danger, however, in the government's promise to cut taxes and raise pensions while the economy is growing rapidly and inflation is high. "The world does not work like that, where you can spend money, cut taxes and keep the budget in shape," said economist Morten Hansen.