Author: Ilona Bērziņa
Politics is not only an art of compromise, but that of intrigue as well. Is the candidate for the post of Governor of the Bank of Latvia already known or are political parties still testing the waters? Why was the news about Britain’s sanctions on Aivars Lembergs go largely ignored in the public space? How stable is the government composed by Evika Siliņa, and how can Progressives afford to place their feet on the coalition’s table? These and other topics were discussed with politologist Filips Rajevskis.
The Union of Greens and Farmers (ZZS) has announced that they are considering the head of “Altum” – Reinis Bērziņš – for the position of Governor of the Bank of Latvia even though there is no information about the coalition being in agreement on this. What does this mean?
Reinis Bērziņš’s candidacy is rather odd, because he once stood as candidate before (in 2019), and the problems that forced him to step down then, have not gone anywhere. Articles from 2022 indicate that those problems – ties to Russian oligarchs and Russian business – still remain. Secondly, he is largely unknown to most residents. This is why it is odd to find his name on the agenda so suddenly. It is possible this is just the start, as there may be candidates that are never chosen, but they are still proposed to test the waters and fight for the real candidate and demonstrate there will be no blind obedience to whatever the leading coalition partner says.
There is no shortage of speculations as to who will be in charge of the Bank of Latvia next. Progressives have announced they will be supporting Mārtiņš Kazāks. Behind the scenes, however, there is talk of it being either Arvils Ašeradens or Jānis Reirs…
When it comes to Reirs or Ašeradens, we have to keep in mind that Prime Minister Evika Siliņa made it clear – no, politicians will not be proposed for this position. I lean towards trusting the PM, but anything can happen in politics – everything is changing.
Last week, Britain announced the imposition of sanctions on Aivars Lembergs and his daughter Līga Lemberga, stating in an official statement, among other things, that “Aivars Lembergs is one of Latvia’s richest people who abused his political position to launder money and hand out bribes.” Could this have any potential impact on the ruling coalition?
This will definitely not impact the coalition’s work. While, in the past, it could have been a reason to delay this coalition from being composed, it is no longer enough to break it apart.
Nevertheless, after the US had imposed sanctions on Aivars Lembergs, ZZS was quick to reassure everyone they would not turn away from their partner. But now there is only silence.
This is the kind of situation when people are trying to ignore the news, let it fade away into obscurity. I think there is no interest to keep it afloat in the media space. Announcements about it only make it more apparent.
No one wants to pull out historical situations and accusations that were previously hurled at ZZS in the context of Aivars Lembergs. New Unity isn’t interested in doing that, because it would weaken the coalition. ZZS isn’t interested because it would make their lives harder. It would seem ZZS has walked passed this line, and the “Lembergs issue” is finally resolved in the coalition and the government. Progressives are also uninterested in talking about this. They’ve always been rather loud in topics involving oligarchs and they don’t want to leave the coalition or agitate their voters, who might turn to them and say: you cannot be in the coalition that has powers like that – you have to leave. This means there is a general interest in keeping quiet about this. As for the opposition, they are no interested in pumping this topic, because either the coalition will change or they will have to sit down with ZZS at the same table. Why should they put on unnecessary tension?
Does this mean the people who say that Lembergs is “a beaten card” in big politics and “no one wants to deal with this pensioner from Puze” are correct?
Lembergs remains a reasonably popular politician. He has electoral power – he can still attract voters and he has the capacity for that. So it would be too early to say that Lembergs is done for. Politicians with ratings like that are unlikely to simply “retire”.
We have ministers in the government right now that have dubious popularity. I mean Progressive ministers Andris Sprūds and Kaspars Briškens. Is is possible the Prime Minister could ask one or both of them to step down and have Progressives delegate other candidates to take their places?
We can draw parallels with Krišjānis Kariņš’s term as Prime Minister, when every now and then a minister was dismissed. But there is one major difference. In Kariņš’s government there was a distribution of votes under which parties that caused a “mutiny” could be kicked out, but the government would remain stable despite this. This is why coalition parties were forced to respond to shaky movements with approval. In the current government, however, it would be enough for just one party to stand up and say “no, we don’t agree with this”, and this would be enough to put Siliņa in an uncomfortable position – either allow the government to collapse or to give in. I think the reason why she is calm with her demands is because she doesn’t have the political power to force any coalition partner to make drastic steps, such as replacing a minister.
Although the Prime Minister has the authority to fire a minister, Evika Siliņa cannot afford to make such a step. She can fire a minister, but it could result in her firing herself along with the minister.
But what about the ongoing scandal about the lies the Minister of Defence told about “keeping tabs” on the Russian drone? What about the pointless expenses allowed by the Minister of Transport in Rail Baltica? What about the half a billion euros that were basically gifted to airBaltic?
This a long-lasting dilemma. On the one hand, it is useful for Evika Siliņa to have scapegoats. Because this gives her the right to point fingers and blame others for troubles. But there is also another side to all this. At some point, the Prime Minister becomes responsible for actions of “scapegoats”, and then people will logically stop and ask, “if they’re so bad at their jobs – why do you keep them in the government?”
And this is where the Prime Minister’s uncomfortable situation comes into play. It would seem that the situation is gradually moving towards a state in which Siliņa is slowly becoming the target for the criticisms aimed towards Sprūds and Briškens. This is matter of her team’s and her own political sensitivity.
It is unlikely we will see any rapid movements before the 4th of December, when budget approval is scheduled to take place in the Saeima, but what about after the budget’s approval? The Combined List party has made it clear they would like to return to the coalition.
Let’s remember what the President said – if any serious changes are observed in the coalition, a party comes up or one party is replaced with another, and then we have a different government, different government declaration, as well as, perhaps, a different Prime Minister. This opinion from the President cannot be ignored. This means a situation when when some new political party comes to the government coalition and everyone gets along just fine is impossible.
The other issue is which parties should get nervous is a new party enters the coalition. I don’t think New Unity, Progressives or ZZS would be thrilled to have the Combined List join the ranks of the government at the expense of their ministers.
Also, there are absolutely no guarantees the President would name Evika Siliņa for the Prime Minister’s post again if changes are added to the coalition. To do this, he would need some very strong motivation. By naming Evika Siliņa and giving her his trust, the President of Latvia also imposed certain duties and responsibilities on her. There is nothing to suggest she has become a favourite of the President of Latvia for him to entrust Siliņa with the formation and management of the government one more time.
The ruling coalition doesn’t listen to public opinions about important topics all that much. For instance, residents have a very negative opinion when it comes to lowering contributions to the second pension level. However, the government doesn’t listen to what people have to say.
There are legal and moral aspects. Nevertheless, it is worth mentioning that this is a solution with a four-year length. Additionally, even before the topic of the second pension fund, I never heard of people clapping their hands in admiration of the work done by the government. We’ve all read reports from the media how this will neither bring wealth nor any benefit to residents. The money they pay doesn’t really accumulate at any rate.
There were reports about meagre profitability of 2nd pension plans and even losses…
Exactly. In this situation, the question is whether you are willing to contribute less to this level for a couple of years so that you do not have to raise taxes, or whether you prefer to dream that at least something will come of it.
I don’t know about dreams, but people’s backlash to this was enormous on social media…
Here we end up at what the President spoke about. Communication is the weak point of this government.
Yes, these are important things no one talks about loudly. For example, there is the fact that the total state budget amount now exceeds EUR 19 billion and Latvia’s annual budget.
Society doesn’t think in these categories. Because this is not private debt – it’s the state debt. If you ask people if it is good that the state debt is on a rise, they say no. However, if you propose raising taxes to halt the growth of the state debt, people would object to that.
The problem is another – public debt versus public expenditure. At the moment, the state is not able to play an active role in reducing useless and wasteful expenses. The debate on the waste of tax money on huge salaries and the useless expenditure of bureaucracy, which, moreover, is still hindering development, has not been given a solution on the part of the government.
The topic of the reduction of the bureaucratic apparatus has been in discussion for years. Is it even realistic?
Valdis Dombrovskis did is rather well in 2010. The economy immediately showed some traction and we were able to overcome the deepest economic crisis we had relatively quickly. One of the key elements was precisely the reduction of public spending and the bureaucratic apparatus. Unity has somehow forgotten how it happened. I think if New Unity asked Valdis Dombrovskis, he would certainly not deny his advice on how to do it.
This is a question from the category – crows do not pick crow’s eyes. Civil service, however, is the most reliable electorate of the New Unity. Have we not forced ourselves into a corner with this?
Yes and no. Valdis Dombrovskis was confidently re-elected after the above-mentioned reforms. The public appreciated it very much and there is no way to say that it was a political failure for him.
Does this mean the reduction of the bureaucratic apparatus is a matter of political will?
I would say political will and effective management.