The last few weeks have seen an intensification of political activity in Latvia after President Valdis Zatlers proposed dismissing the Saeima, leading to the July 23 referendum on this question.

Since that time we have seen:

• Zatlers not being appointed to a second term as president. In his stead the parliament voted in Andris Bērziņš.
• Zatlers deciding he will form his own political party, Zatlers’ Reform Party (Zatlera reformu partija).
• One of the older parties in the Saeima, the People’s Party (Tautas partija) voting to disband.
• Intense jockeying in the governing centre party Unity (Vienotība) to regain popularity after Zatlers declined an invitation to join it.

Zatlers’ term in office concluded July 7, with increasingly political tones in his last pronouncements and activities. He repeatedly declared that politics in Latvia should not be run in the interests of the few, but should be based on transparency and honesty. Confronting the oligarchs will be a major theme of his campaign. With universal agreement that the referendum will approve the dismissal of the Saeima, the campaigning has already begun for the next election likely in September.

There had been much speculation over whether Zatlers would form his own party or take up the invitation to join Unity. It seems there were two factors that convinced him to go with his own party. First, his decision to begin the process of dismissing the Saeima has been hugely popular in Latvia, and he needed to ride this wave of popularity and support. Secondly, however, is the perception of Unity that it precisely lacks unity, that it has had to make too many compromised decisions as the leading party of the government coalition, and that for Zatlers to hitch his fortunes to that party may be to limit his influence rather than to maximise it.

It should be said that in political terms Zatlers’ move is a considerable gamble. One outcome of the election could well be that the Moscow-oriented Harmony Centre (Saskaņas centrs) could emerge as the largest party (it is the second-largest in the present Saeima after Unity). If it is able to build a coalition with the Union of Greens and Farmers (Zaļo un Zemnieku savienība), an opportunistic party that is at the centre of all coalition deals, we could have a Harmony Centre-Green and Farmers majority, and an prime minister from Harmony Centre. This would be enormously satisfying to Moscow but a danger to Latvia.

However, one other outcome, likely more desired by Zatlers, may be that his Reform Party, together with Unity and the National Alliance/All for Latvia! (Nacionālā apvienība/Visu Latvijai!) could gain the 50-plus mandates in the 100-member Saeima.

In his program, Zatlers has not ruled out an alliance even with the Harmony Centre, but he sets a precondition: Harmony Centre must recognise that Latvia was occupied by the Soviet Union, a point of seeming obsucre historical semantics, but a vital core value for all Latvian parties, and one that Harmony Centre has continually evaded.

Meanwhile, Unity has suffered from its own lack of unity, as well as from a continual attack on its policies of austerity and the shenannegins of its coaltion partner, the Union of Greens and Farmers. First, Unity has always been a coalition itself of three groupings that has struggled to give an impression of unity on major issues, with two factions in particular intense disagreement over policy directions and the question of whether an alliance with Harmony Centre should be ever thought of. Second, the austerity measures of cutting budgets, lowering wages and raising taxes—to satisfy the demands of the International Monetary Fund and other lenders—has caused widespread disillusionment. This comes ironically at the very point where the economy seems finally to be turning around, and where even more bizarrely Latvia and the other Baltic states are being used as examples of how countries can get out of the global financial crisis, while seemingly richer countries such as Greece cannot.

Also wounding for Unity has been the constantly undermining by its coalition partner. The most galling example of this was the election to president of Andris Bērziņš, who is a Union of Greens and Farmers member, a banker and one of the fat cats of the Latvian establishment. In interviews Bērziņš cannot even admit there is any oligarch influence in Latvian politics, yet he is a close friend of them all.

Nevertheless, the reality of a looming election has made politicians behave in public. All parties agreed to dismiss the head of the Corruption Prevention and Combating Bureau (Korupcijas novēršanas un apkarošanas birojs) Normunds Vilnītis, a man clearly out of his depth in the position. The Saeima also agreed to stronger measures to ensure competence in the Latvian language in professional occupations, a clear sign of Harmony Centre (which usually supports a stronger role for Russian in public affairs) not wanting to rock the boat and scaring off Latvian voters who may vote for it. Such stances will likely not survive the election.

One party that may not survive the election is For a Good Latvia! (Par labu Latviju!, or PLL). Part of PLL, the long-standing People’s Party, has just decided to disband, perhaps encouraged by a looming conclusion to a long legal process to bring it to account for overspending at past Saeima elections. The People’s Party was the leading party of the previous Saeima when it was seen as largely responsible for Latvia’s troubles in the global financial crisis. For the first time, there is a feeling that the oligarchs’ ability to manipulate public opinion is being challenged, and a returned Saeima with the PLL removed would be a significant step forward in the slow crawl to democracy.

Much remains unknown as the various factions and parties position themselves for the post-referendum scramble to the elections. Zatlers’ initiative in dismissing the Saeima has been seen as a splendid move. It remains to be seen if Zatlers’ involvement in the messier side of politics away from the presidential chair will be just as productive.

The past two weeks have brought two of the biggest political shocks yet seen in Latvia’s 20 years of renewed independence.

On May 28, President Valdis Zatlers used a previously never activated constitutional power to recommend the dissolution of the parliament—the Saeima. The action leads automatically to a referendum, scheduled July 23, on whether the Saeima should be dissolved.

If the majority of voters agree, then we head for new elections, less than a year since balloting for the 10th Saeima in October. In a delicious constitutional twist, if the voters do not agree to dissolve the Saeima, then the president himself must step down.

There is little doubt the referendum will overwhelmingly decide on dissolution. The immediate instigation for Zatlers was a scandalous vote in the parliament just a few days before his announcement. The Saeima failed to allow a search of MP Ainārs Šlesers’s house by the Corruption Prevention and Combating Bureau (Korupcijas novēršanas un apkarošanas birojs, or KNAB). Šlesers is one of Latvia’s more odious oligarchs with a long history of tying his political interests to his business interests. As a parliamentarian he has immunity from criminal investigation, an immunity that can be lifted by the Saeima.

For Zatlers it was the last straw, one more instance of the Saeima using its powers to obstruct justice and protect the most wealthy and powerful. This parliament and the previous one during the past couple of years have made a number of decisions related to appointments and other matters that have gone clearly against the national interest.

Zatlers’s annoucement was met with surprise. In a rare cameo, those who were most tongue-tied and least able to comprehend were the oligarchs themselves, not only Šlesers but also his political ally Andris Šķēle and Ventspils Mayor Aivars Lembergs. They initially simply did not know how to react, before regaining their composure after a few days and setting out to destroy Zatlers.

The second shock came as a direct consequence of the first, for the week after Zatlers’s announcement, the election of the next president was scheduled. In Latvia the president is elected by the Saiema for a four-year term, and Zatlers‘s time in office ends July 9.

The method of electing the president, particularly the process of nomination, is not spelt out in the constitution. Candidates have appeared in the past from all kinds of unlikely sources. Zatlers, a surgeon who was not involved in politics, was persuaded to stand for president four years ago—in a now infamous meeting in the Rīga Zoo—by the oligarchs he is now criticising.

For a long time Zatlers (who was eligible for a second term) was the only announced candidate for this year’s election. He received endorsements from the leading Unity (Vienotība) party and ironically by Šlesers’s party, For a Good Latvia! (Par labu Latviju!).

But a few weeks ago another candidate was nominated by members of the Union of Greens and Farmers (Zaļo un Zemnieku savienība, or ZZS): Andris Bērziņs, an old-time fat cat from the Soviet era, a man successful as a party apparatchik in that regime, who after independence became a banker and board member of some of the larger privatised companies.

A typically hypocritical non-debate then ensued about who would be the better candidate, with ZZS members making contradictory statements. However, most parliamentarians did not publicly commit, nor did they need they commit. In one of Latvia’s most undemocratic conventions, parliament elects the president—and other top appointments—by secret ballot!

Although seen by many as a lapdog appointment by the oligarchs four years ago, Zatlers showed a considerable degree of independence as he grew into the job, and made a number of critical interventions into local politics. So, even though Šlesers’s party at least publicly supported him, Bērziņš‘s candidature seemed to indicate the oligarchs were looking for a safer option.

Zatlers’s bombshell move to dissolve the Saeima clearly mobilised all the oligarch powers against him, but it was no plain sailing for them. To be elected president, a candidate has to receive 51 votes in the 100-seat Saeima.

In the first vote on June 2, Bērziņš only received 50 votes to Zatlers’s 43. As many commentators mentioned, something had gone awry with the oligarchs’ plan. In the second ballot Berziņš scored 53 votes to Zatlers’s 41. Three MPs had been found to change their vote, by means or reasons still unknown.

Two significant outcomes of this dark process can be pointed to, and one brief speculation may be worth airing. First, in relation to Zatlers himself, he has now become a hero for many who were dubious about his nomination four years ago, while those who supported him then now see him as the Devil incarnate. There has been much speculation about his political future. Will he form his own political party? Unity members have invited him to join them. Clearly Zatlers has grown in statute to become a significant political figure.

Secondly, the election of Bērziņš (who incidentally denies that so-called oligarchs have any influence on Latvian politics) once more showed the tenuous position of the leading Unity party, particularly in light of the continuing undermining by its coalition partner ZZS. Facing a decline in the polls and internal bickering, Unity has attempted to revitialise itself after Zatlers’s announcement, but now faces an uphill battle to make sure it is still the largest party after the elections.

To speculate further on Latvia’s surprising politics: If this is the first time a president has recommended dissolving the Saeima, could it be that if Bērzīņs really is seen to be protecting vested interests, he could become the first Latvian president to be impeached by the Saeima?

We await the referendum of July 23 and then the new Saeima elections. Will they bring the desired change to a more democratic Latvian politics?

Speculation over the looming presidential election is intensifying in Latvia, and the fate of incumbent Valdis Zatlers—who announced he is available for a second term but who is opposed by many—is clearly hanging in the balance.

Meanwhile, issues of language and education have once again come to the fore with some unusually alarmist warnings about potential ethnic strife if a referendum approves that all teaching in state–financed schools be in Latvian only.

Uncertainty over the next president

The next president will be elected by the Saeima (Parliament) in mid-year. In Latvia’s strongly parliamentarian constitutional system, the president is largely a symbolic figure, with limited political powers. However, the past two presidents, Zatlers and before him Vaira Vīķe-Freiberga, have turned the job into a less purely symbolic position and have had greater political influence.

The significant problem of the presidential election is the complete absence of rules and transparency as to how the Saeima goes about the process. Infamously, Zatlers himself, a successful and respected medico with no real political background, was persuaded to stand (at a meeting at a zoo!) by a handful of oligarchs, and his election rammed through the Saeima despite widespread protests.

In something of an irony, Zatlers slowly proved that he was no lapdog of the then-ruling People’s Party (Tautas partija) and was not remiss in criticising the previous Saeima and government. Zatlers is certainly not the most charismatic of presidents, but in his doggedly persistent style he demanded and got several changes to the electoral laws and to laws relating to how the Saeima can be dismissed. He also demanded a more transparent process in electing future presidents, which has only been half realised. Now there must be a public announcement of a list of possible candidates before the Saeima decides, but otherwise the selection process can still be less than transparent.

It is clear that the oligarch parties—the rump of the People’s Party and their mates in the For a Good Latvia! (Par labu Latviju), as well as elements of the Union of Greens and Farmers (Zaļo un Zemnieku savienība, or ZZS)—are happy to ditch their once favoured son and go for someone more malleable. ZZS in particular still promotes its controversial Ventspils Mayor Aivars Lembergs, who has been accused of corruption, as a candidate.

This leaves the leading government party Unity (Vienotība), which is in coalition with the ZZS, in a difficult position, being virtually forced to back Zatlers, fearing a more oligarch-friendly candidate may get the job. The ZZS has recently been clearly flexing its political muscles, and on several occasions has been able to get its candidates for various positions accepted by different alliances in the Saeima against Unity’s desires, putting strains on the coalition. The presidential election promises to be one more such battleground.

Schools teaching in Latvian only?

On the language front, the campaign by the nationalist bloc in the Saeima to have all state-financed schools switch to teaching in Latvian only has moved to the next stage. The proposal relates to the long-standing issue of Latvia still having a large Russian-language primary and secondary school system, a heritage from the Soviet period.

Although these schools now all teach an increasing number of subjects in Latvian, and in secondary schools the proportion taught in Latvian must be at least 60 percent, the existence of the Russian school system continues to prop up a very divided society.

For the National Alliance (Nacionālā apvienība “Visu Latvijai!” – “Tēvzemei un Brīvībai/LNNK”) this has been anathema, and it has proposed that starting with the first grade in September 2012, progressively all teaching in the Russian stream schools will take place in Latvian. Moreover, the nationalists want this written into the constitution.

The nationalists’ proposal was defeated in the Saeima, but they are now using the mechanism of a referendum to gain support.

In Latvia’s referendum system, such changes to the constitution may be proposed by the citizens, and the first step is gathering 10,000 notarised signatures by citizens who support such a change. This number of signatures has now been gathered, which will cause the Central Election Commission in turn to start another signature-gathering exercise, this time financed by the state. If 10 percent of the eligible number of voters sign in this phase (around 153,000 signatures are needed), then the Saeima must debate the proposal. If the Saeima approves the proposal, it will become part of the constitution. However, if the Saeima disagrees, then the issue goes to a referendum. It is not an easy path for such a constitutional change, but a possible one.

Although the issue has been around for years, the success in gathering these initial signatures has brought a remarkable reaction. As a copycat response, a small Russian splinter party started its own signature-collecting campaign, this time calling for Russian to be made the second official state language. Launched with great fanfare, the campaign ran into a farcical situation when most of the early keen signers were in fact not citizens of Latvia, hence ineligible to sign. We also saw a paradoxical situation that the Russia-leaning party Harmony Centre (Saskaņas centrs) opposed the move. Harmony Centre is no friend of the Russian splinter parties, even though several if its individual politicians have not so privately supported the idea. Harmony Centre policy remains support for one official language only—Latvian. The party has been very clearly positioning itself not to alienate ethnic Latvian voters, showing strains over the issue. An independent social survey revealed that some 35 percent of Latvia’s residents supported Russian as a second official language, but 63 percent opposed it. Non-citizens constituted a significant proportion of those supporting Russian.

More ominous responses were not long in coming. Already during the initial signature-gathering, some politicians—particularly from the pro-Moscow For Human Rights in United Latvia (Par cilvēku tiesībām vienotā Latvijā), which no longer is in the Saeima—threatened violence if the nationalists’ constitutional amendment is accepted, as it would mean a virtual elimination of the Russian school system. These words were echoed in early April by Europarliamentarian Aleksandrs Mirskis, who threatened a “civil war” if the proposal is accepted. Mirskis called European attention to what he called a direct threat to Russian identity and Russian schools, and claimed that proponents of the constitutional amendment were “nationalists and Nazis” in the Saeima, igniting further passions. While the rather idiosyncratic and usually aloof Mirskis is not a significant political force in Latvia, this is an unusual extreme example of rhetoric, where politicians of all sides tend to be more circumspect over issues of integration and nationality.