Bloomberg News

Latvian President Nominates Dombrovskis to Form Government

October 19, 2011

(Updates with comment from president in third paragraph.)

Oct. 19 (Bloomberg) -- Latvian President Andris Berzins nominated Prime Minister Valdis Dombrovskis to form a new government after parliamentary elections last month.

Dombrovskis’s Unity Party will try to form a government together with ex-President Valdis Zatlers’ Reform Party and the National Alliance. The three parties, together with six deputies that split off from the Reform Party, will have 56 seats in the 100-member legislature.

“I have taken the decision to invite Valdis Dombrovskis to form a Cabinet of ministers,” said Berzins in a statement on his website. The president had proposed to Dombrovskis to create a Cabinet with members of all parties in parliament for broader support.

The government will need to approve additional austerity measures to cut the deficit to 2.5 percent of gross domestic product next year as it plans to adopt the euro two years later. Since turning to a group led by the European Commission and the International Monetary Fund for a 7.5 billion-euro ($10.3 billion) loan in 2008, the Baltic country has lowered spending and raised taxes equal to about 16 percent of GDP.

“The first serious examination for the possible coalition’s ability to work will be the vote on the state budget for 2012,” Berzins said in the statement. The budget “can’t become an experiment with the state and threaten the country’s international obligations.”

--Editors: Alan Crosby, Douglas Lytle

To contact the reporter on this story: Aaron Eglitis in Riga at aeglitis@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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