Latvian prime minister reflects on 100 days in office (Feature)

Jun 19, 2009, 3:41 GMT

Riga - The sight of thousands of people in the streets of your capital protesting government policies would be enough to make most prime ministers think they were failing.

But to Valdis Dombrovskis, the 37-year-old prime minister of Latvia, the protestors who took to the streets on June 18 show that he is getting things right.

Friday marks exactly 100 days since Dombrovskis came to power, and Europe's youngest premier has been in a reflective mood now that the Latvian Parliament has adjourned for its summer break.

In a special note issued to mark the 100 days, Dombrovskis said it had been a 'tough exam' but that he had achieved his primary objective: 'to save Latvia from bankruptcy.'

'We have accomplished this task, though emotionally this was a very hard decision. However, without reducing its budget deficit, Latvia would face much more serious problems,' he said.

Dombrovskis' five-party coalition pushed 1 billion dollars in budget cuts through parliament on Tuesday. The painful austerity measures should trigger payments of around 1.4 billion euros from international lenders including the International Monetary Fund (IMF), European Union and regional governments including Sweden, which has a big stake in the Latvian economy.

The payments are likely to be made at the end of June, and are part of a larger, 7.5-billion-euro economic aid package, though the IMF and EU are still mulling the Latvian government's plans to make sure everything is in order.

Beyond Latvia's balance sheet, the IMF and EU will be comparing Dombrovskis' ability to push through reforms with the dithering of his predecessor, Ivars Godmanis, who signed the original loan agreement.

Godmanis' government collapsed a few weeks after Riga witnessed serious rioting, sparked by his own attempts to push through spending cuts.

In contrast, Dombrovskis has managed to push through far harsher measures while retaining considerable public understanding - even among those demonstrating in the streets.

After years of hearing politicians talking about endless 'fat years' and the need to 'put the pedal to the metal' on economic growth, Latvians may not like Dombrovskis' message that things will get much worse before they get better, but at least they feel he is being honest with them.

Plucked from the relative obscurity of a European Parliament seat, many people wrote off Dombrovskis as a bland bureaucrat. While he may not have the rhetorical skills of his predecessor, he does have a degree in economics and projects a level-headed tone that has been precisely the tonic need in populist-prone Latvian politics.

He has spoken about the physical and mental strain of endless meetings and how much he misses simple pleasures such as playing basketball with friends. That, too, has helped him seem more normal than the oligarchs and ego-trippers who frequently infest politics.

Dombrovskis' dilemma was best summed up by Latvian President Valdis Zatlers in his Thursday address to Parliament: 'It is hard to understand, of course, that the best choice was made. It was a choice between a terrible situation and a very terrible situation.'

By cutting wages, pensions and other benefits, sacking around a third of Latvia's teachers and overhauling the health and social- service systems, Dombrovskis and his Finance Minister Einars Repse have chosen the 'terrible' route.

They have also seen off calls for Latvia to devalue its currency - at least for now.

The bad news for Dombrovskis as he catches up on his basketball practice over the summer recess is that his next 100 days are likely to be at least as taxing as the first.