The year 2011 in Latvian politics begins with more hope but also more intrigue than the gloomy situation of 12 months ago. The Saeima elections in October signalled significant changes in Latvia’s political architecture, against the background of Prime Minister Valdis Dombrovskis’ continued and doggedly determined course of paying off debts and bringing Latvia’s economy back to growth.

The realignment of political parties was a major feature of 2010.

A year ago, the coalition led by Dombrovksis suffered repeated bouts of destabilisation. When the formerly leading People’s Party (Tautas partija) left the coalition in March, it left Dombrovskis with a minority government, but interestingly one that had relatively little trouble surviving until October.

Instead of helping its public profile, the move resulted in the People’s Party desperately fighting for its survival. The party continued to plummet in the polls and eventually needed to seek an alliance with Ainārs Šlesers’ First Party of Latvia (Latvijas Pirmā partija) to be able to guarantee even reaching the 5 percent of votes required to gain representation in the Saeima. Their new creation, the hypocritically named For a Good Latvia! (Par labu Latviju!) just managed to scrape back at the elections, a humiliating comedown for these parties which before the election controlled one-third of all deputies.

Such a consolidation of parties was also achieved elsewhere. In March the three groupings closest to Dombrovskis’ government joined forces to form Unity (Vienotība). This was a combination of New Era (Jaunais laiks), its breakaway Citizens’ Union (Pilsoniskā savienība), and the Society for A Different Politics (Sabiedrība citai politikai)—itself a breakaway from the People’s Party.

Not to be outdone, the nationalist party For Fatherland and Freedom (Tēvzemei un brīvībai / LNNK) found itself also slipping in the polls, and joined an alliance with the newer, much brasher and more strident All for Latvia! (Visu Latvijai!) to form the National Alliance (Nacionālā apvienība).

A second major theme for 2010 was the continued rise of the Harmony Centre (Saskaņas centrs).

This party, heavily backed by Latvia’s Russian voters, had significant success as the largest party in the 2009 Rīga municipal elections, where its leader Nīls Ušakovs was installed as mayor. In the ratings throughout 2010, Harmony Centre almost always came in as the largest party, usually leading its nearest rival Unity by several crucial percentage points. This pointed to the distinct possibility of Harmony Centre being the largest party in the Saeima, which rang alarm bells through the much more fragmented Latvian parties.

The surprise election result

Yet the election of Oct. 2 did not bring a Harmony Centre victory. Instead, Unity managed to mobilise voters and scored a narrow but significant victory. In the 100-seat Saeima, Unity now controls 33 seats; Harmony Centre, 29; the Union of Greens and Farmers (Zaļo un Zemnieku savienība), 22; the National Association, 8; and For a Good Latvia!, 8.

As another significant outcome, the long-established and much-hated Soviet imperialist party For Human Rights in a United Latvia (Par cilvēku tiesībām vienotā Latvijā) gained only 1.4 percent of the vote and failed for the first time to get representation in the Saeima.

With this result Dombrovskis was asked once more to form a coalition government, only the second time in Latvian history that an outgoing prime minister before a Saeima election is also the prime minister after that election. Yet the process was not easy.

An intriguing period ensued with Dombrovskis asking Harmony Centre to consider joining a coalition, a move that surprised even many in his own party. However, the offer came with strings attached: Dombrovskis wanted to have Harmony Centre take an unequivocal stand on some key issues, including recognising as a fact Latvia’s occupation under Soviet rule, and other points of Latvian-Russian disagreement where it had often showed itself to be equivocal. Angered by such demands to make these ideological commitments, Harmony Centre declined to join the coalition. For some, this was a chance gone begging, the chance to have a coalition that combined the leading Latvian- and Russian-oriented parties that would take responsibility for the difficult economic decisions that lay ahead; for others, this was seen as averting a dangerous move to bring people of dubious loyalty into the government.

For Fatherland and Freedom had also been a member of Dombrovskis’ outgoing coalition government, but its alliance with the more radical All for Latvia! was seen as taking the government potentially too far to the right, so it also was not taken on board. Instead, Unity finally formed a coalition with the other significant winner in the elections, the Union of Greens and Farmers, which had increased its representation in the parliament from 19 to 22 seats, and which had always played the quieter partner role in the coalitions before. It is now this two-party coalition with 55 Saeima deputies that forms government.

The bitterness of the defeat for the For a Good Latvia! party has caused it to become extremely active in the opposition. The first destabilisation effort was made in November with an attempt to unseat Foreign Minister Ģirts Valdis Kristovskis. We are likely to see more such destabilisation attempts in 2011 as the opposition targets ministers one by one.

Under Dombrovskis, the first signs of Latvia’s economic recovery are apparent, with encouraging export performance and achieved revenue targets. However, the demands of the International Monetary Fund and other creditors for structural reforms and cutting of budgets means that we will continue to see internal deflation. Living standards will continue to drop. However, they are expected to reach their nadir in 2011, with a rise in economic growth expected from mid-2011. The election result has been widely seen as confirming that Latvian voters are willing to put up with this policy line for the sake of long-term improvement.

Foreign affairs

In terms of foreign relations, 2010 also brought some significant advances, with President Valdis Zatlers’ long-delayed visit to Moscow bringing some immediate gains. The endless lines of trucks at some border crossings into Russia began to be processed more quickly. More broadly, however, the visit was marked by a neutral and business-like tone, with Russia not pressing its traditional hectoring demands on citizenship and language issues.

One aspect of foreign policy became known to the general public in December through WikiLeaks: a cable confirmed that the NATO defense alliance had laid down contingency plans for action in the case of the Baltic states being attacked. These are contingency plans that the Baltics had long asked for, but which NATO previously had never formulated. More publicly in May, in a significant win for Latvia, the European Court of Human Rights upheld Latvia’s right to try former Soviet partisan and self-proclaimed anti-fascist fighter Vassily Kononov for war crimes in 1944, when he had supervised the execution of nine civilians in a small Latvian village.

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Several years of still painful economic rectification lie ahead for Latvia, but the first signs at least are that the government continues to enjoy support, and that it can fight off attempts to destabilise it. 2010 will be seen as a turning point in Latvian politics.