Prime Minister Valdis Dombrovskis has apologized to the Latvian people for the serious tests they will have to endure as the country struggles to emerge from its economic crisis and avoid bankruptcy.

At the same time, the prime minister said in a statement released June 18, conflict will not solve the problem. The announcement came as several hundred people gathered in the Esplanade in downtown Rīga for a demonstration organized by the Free Trade Union Confederation of Latvia (Latvijas Brīvo arodbiedrības savienība, or LBAS) to protest the effects on workers of deep cuts to the national budget.

“Even though during the so-called ‘fat years’ I have not worked in the government coalition,” Dombrovskis said in his statement, “at this moment I wish to apologize to the people of Latvia for the situation and for the tests that we all will have to endure.

“I recognize that I cannot promise well-being tomorrow at lunchtime,” he continued, “but I know I am doing all that is possible to stop Latvia’s heavy fall.”

The Saeima on June 16 approved LVL 500 million in cuts to this year’s budget, which government leaders hope will clear the way for a package of international loans to be released to the country. Without the money, Dombrovskis said in his statement, the government by August will not be able to make salary, pension and other payments.

The sweeping cuts to the national budget have claimed their first political casualty. Health Minister Ivars Eglītis stepped down June 17 to protest what a 10 percent decrease in his ministry’s budget will mean to health care in Latvia.

“This is a decisive time for our nation, and we do not have many options,” the prime minister said in his statement. “Latvia faces bankruptcy, from which we can save ourselves only by sharply reducing state expenditures and hoping for the international loan.”

The other option would be to slash the budget even further, thereby putting even more pressure on society, Dombrovskis said.

Latvia’s national budget now foresees spending LVL 4.6 billion this year. The budget will have to be cut by another LVL 500 million in 2010 and again in 2011, officials have said.

The trade unions understand the need for cuts to state spending, LBAS Chairman Pēteris Krīgers said in a press release announcing the June 18 demonstration.

“But we know that there are different ways to save, with an eye toward development or without it,” Krīgers said. “Even while saving it is possible to make new jobs and create new opportunities. Latvians have always survived thanks to their capacity to work. That is why we should be given the opportunity to work!”

In a speech before the Saeima, President Valdis Zatlers admitted the country’s leaders have not been prepared to deal with the crisis.

“In my opinion,” the president said, according to a transcript of his speech, “we must all not only acknowledge, but also accept responsibility for the fact that our decisions often have been incorrect, actions have been incorrect, we have lacked political will, lacked economic and management far-sightedness, we have badly run our country.”

He urged members of parliament to work even through the summer to address the next phase of budget cuts and to involve the public in the decision-making process.

Latvia’s Health Minister Ivars Eglītis has resigned, saying he will not be responsible for what cuts in the government budget will mean to medical care in the country.

Eglītis, a member of the People’s Party (Tautas partija), announced his resignation June 17, a day after the Saeima approved a sweeping LVL 500 million reduction in the national budget. He is the first minister to leave the coalition government headed by Prime Minister Valdis Dombrovskis.

A significant portion of the cuts—LVL 45 million—is to come from the Ministry of Health and will require changes to health care delivery. The amended national budget now foresees spending LVL 4.6 billion, but taking in just LVL 4 billion. The health ministry’s revised budget anticipates spending LVL 453 million this year.

“Without creating the social protection system for those patients to whom the lack of money already forbids to receive timely and qualitative medical help, further health budget cuts were not acceptable because those are disproportionate to the social responsibility of the sector,” Eglītis said in a statement released by the health ministry. “As (a) doctor and health care specialist I cannot accept that.”

Dombrovskis has accepted Eglītis’ resignation.

“In this crisis situation the minister for health has chosen the easiest way as it is clear that the health care system is facing a process of complicated, urgent and essential reforms,” Dombrovskis said in a prepared statement. “The decision will require political will and determination, and conviction that the end result is adequate for such a health care model which should already have been introduced some years ago. If the minister honestly admits to be unable to manage these reforms, his resignation is sensible and acceptable.”

Dombrovskis also said he is awaiting the People’s Party’s recommendation on who should replace Eglītis.

After a meeting with the prime minister, President Valdis Zatlers told a press briefing that Latvia needs a health minister who is confident in their abilities.

“And this minister must be found as soon as possible,” Zatlers said. “I would even say today, so he could start work tomorrow.”

Political instability and internal conflict have contributed to Latvia dropping to 54th place in the Global Peace Index compiled by the Australia-based Institute for Economics and Peace.

Last year Latvia improved its ranking to the 39th most peaceful nation in the world, up from 47th in 2007. However, economic and political events late last year—which spilled over into a large Jan. 13 demonstration that ended with some protesters rioting—contributed to the country’s slip in the ranking, according to the institute.

The third annual ranking, now listing 144 countries, was released June 2 in London and Washington, D.C.

The Baltic nation is not alone in becoming less peaceful, according to the institute, which reported that the worldwide change “appears to reflect the intensification of violent conflict in some countries and the effects of both the rapidly rising food and fuel prices early in 2008 and the dramatic global economic downturn in the final quarter of the year.”

No. 1 on the Global Peace Index is New Zealand, which swapped positions with last year’s most peaceful nation, Iceland, which now is No. 4. Iraq remains the least peaceful nation, the same spot it has held in all three years of the index.

Within the Central and Eastern European region, Latvia is in the middle of the pack at 11th. Slovenia, which ranks ninth overall, is listed as the most peaceful in the region. Russia, close to the bottom of the world rankings at 136th, is last in the region.

The index gives each country an overall score from 1, indicating most peaceful, to 5, meaning least peaceful. Latvia’s score in this year’s index is 1.773, the same as Egypt.

Estonia, with a score of 1.661, ranks 38th, down from 35th last year. Lithuania, with a score of 1.687, slipped from 41st last year to 43rd this year, the same ranking it had in the first Global Peace Index.

Further information on the Global Peace Index is available by visiting www.visionofhumanity.org.