Latvia and the European Union: A primer

In a few years, Latvians from outside Europe visiting their ancestral homeland may be surprised that they’ll be paying for souvenirs with euros rather than with the good, old lat.

While Latvians in Canada and the United States have followed with great interest the pending enlargement of the NATO defense alliance, they may have pushed to the back of their minds an equally important debate: whether Latvia should join the European Union.

For those who may have only scanned the headlines of the past several months, here is a primer on European Union expansion, a process that promises to create the largest economic market in the world by eventually adding 13 new countries—including Latvia—to its current roster of 15.

The idea for the modern European Union was born in the context of a Europe still struggling to determine what its future would be like after the end of World War II. British political leader Winston Churchill first suggested formation of a “United States of Europe” in 1946. Four years later, France proposed a federation of European countries. By 1951, six Western European nations had formed the European Coal and Steel Community, the first step in moving Europe toward the ideal of reducing barriers to free trade.

In the early years, efforts at closer cooperation in politics and military defense failed, but succeeded in the economic arena. In 1958, the European Economic Community treaty went into effect, aimed at allowing the free movement of trade across the borders of the countries of the “common market.” The six original members of the EEC—Belgium, France, Germany, Italy, Luxembourg and the Netherlands—have been joined by nine other nations.

The modern European Union came about in 1993 with the adoption of the Treaty of Maastricht, which reorganized and expanded the responsibilities of the member states. Among the most visible changes was the adoption of the euro as the common currency of the EU, agreement on a joint security policy and coordination on issues such as immigration and fighting drug trafficking.

The EU today remains an often confusing array of treaties and institutions. At its head is what the EU refers to as its “institutional triangle” consisting of the European Commission, the European Parliament and the Council of the European Union. Beyond the “triangle” are two dozen other institutions and agencies.

The European Commission may be viewed as the EU’s executive branch. It proposes legislation to the parliament and to the council and administers the decisions of those institutions. The 20-member commission also is the body that often speaks for the EU in international questions.

The European Parliament is elected every five years by the voters of the EU’s member countries. The parliament has 626 members. It and the Council of Europe make laws that govern the EU and also determine its budget. The parliament also oversees the work of the European Commission.

The Council of the European Union, according to EU literature, is the union’s chief decision-making body. It shares lawmaking and budgetary authority with the parliament. Council members are ministers from each of the member countries. The council’s presidency changes every half year. Currently, the presidency is held by Denmark. In January, Greece will take over.

Although full of promise, the EU over the years has had plenty of detractors as well as its share of problems, such as trade disputes with the United States, the growth of a transnational bureaucracy, and enough political scandal to keep things interesting.

Regardless, it’s an economic force to reckoned with—and the government of Latvia is among those that want in.

Already in August 1991, after the Soviet Union crumbled and Latvia regained its independence, leaders began looking west with a dream of “returning” to Europe. Latvia applied to join the EU in 1995, becoming one of 13 Eastern and Central European nations eager for membership in the club.

To join the EU, the candidate countries have to complete 31 “chapters” of accession negotiations. The negotiations are essentially a give-and-take process during which the candidate countries listen to recommendations for fixing things that aren’t up to the snuff of EU standards, known as the acquis.

Five years ago, when the European Commission adopted its Agenda 2000, it seemed doubtful that Latvia and Lithuania could join the EU any time soon. Estonia, where economic and political reforms had moved at a quicker pace, was included in a list of six countries that could be in a first wave of enlargement. Accession negotations with those countries started in 1998. But the following year another six, including Latvia and Lithuania, began talks.

For Latvians eager to see their country join the European Union, the month of October has been a critical time.

Originally, 13 countries were considered for enlargement. Meeting in Brussels on Oct. 9, the European Commission said 10 nations—including the Baltics—are ready for the last leg of negotiations that should lead to them becoming members in 2004. Bulgaria and Romania were told they would have to wait until 2007, while Turkey must continue working on reforms with no clear date for membership.

Then, on Oct. 19, Irish voters ratified the EU’s Treaty of Nice. Last year, Ireland rejected the treaty. If it had done so again, enlargement of the union would have been thrown into question.

Now all that remains is for Latvia and other candidates to keep plugging away at government and economic reforms so that they can join the EU by 2004.

In its latest report on Latvia’s progress toward membership, the EU noted:

  • Continued problems with the nation’s judicial system.
  • Latvia’s problem with corruption “remains a cause for serious concern.”
  • Integration of non-citizens should be accelerated.
  • Improvements to the functioning of the labor market would be welcomed, particularly in areas such as aiding disadvantaged workers and education.

Of course, even if the Latvian government accomplishes all that is left in addressing the EU’s concerns, nothing is guaranteed. One major hurdle remains: public opinion. Referendums are to be conducted in each candidate country to determine if voters want to join the EU.

A referendum on joining the EU is not a sure bet for supporters. In 1994, voters in Norway turned thumbs down on membership.

In Latvia, the margin of potential victory has been shrinking. The latest Eurobarometer poll conducted in March and April by the EU found that just 52 percent of Latvian voters would support a referendum on EU membership. Although that’s enough to get by, it’s a significant drop of 7 percentage points from the last survey in the autumn of 2001.

It’s also the lowest level of support found in all the candidate countries.

By comparison, in Estonia 59 percent of voters said they would support an EU referendum, while in Lithuania support reached 75 percent. In Romania, which now has to wait until at least 2007 for membership, support was at an astounding 96 percent.

Andris Straumanis is a special correspondent for and a co-founder of Latvians Online. From 2000–2012 he was editor of the website.

From horse race to horse-trading

The Saeima (parliament) elections are over. Now a new government is formed. Right? In Latvia it is never quite that easy.

According to the Latvian constitution, after an election the president can invite anyone he or she feels is capable of forming a government to do so. By convention the president would look first to the largest parties represented in the Saeima or to any major coalitions that are being formed, but there are no prescriptions for who should be asked.

And in any case the final decision is not up to the president. Ultimately, a government can only be formed if that particular coalition and its candidates for prime minister and the cabinet have the support of the Saeima.

So, horse-trading is the order of the day, not unusual in European coalition-building politics, but in Latvia still with its own unusual features. In the 8th Saeima elections Einars Repše and his New Era Party (Jaunais laiks) won the largest number of seats. He is expected to head a coalition government as prime minister. This outcome appeared relatively predictable in the beginning, but has increasingly become bogged down in battles over appointments of ministers from among the potential coalition members. Repše, once hoping for an clear majority for his party to avoid coalition weakness, is now ironically embroiled in it.

The likely coalition parties are the First Party of Latvia (Latvijas Pirmā partija), For Fatherland and Freedom /Latvian National Independence Movement (TB/LNNK) and the Greens and Farmers Union (Zaļo un zemnieku savienība). All these parties have broadly similar views on a range of economic, foreign and domestic issues, but that does not make the dealing easier. In fact, each party has to work hard to maintain its own distinct identity and appeal to its current and potential electors. And in the face of this ideals of good government and orderly coalition building recede into the background. At the time of writing, the Greens and Farmers Union seemed to be presenting the most difficult demands: promised the agriculture and environment ministries, it is holding out for at least one more high-ranking ministry, but that’s opposed by other coalition members.

It is comical, or perhaps tragic, that all the smaller coalition members have been trying to avoid several ministries, including social welfare, local government, social integration and regional development—all potentially difficult appointments for any incumbent.

The other curious aspect of this process is that Repše pointedly has not been talking with the other large centre-right party in the Saeima, Andris Šķēle’s People’s Party (Tautas partija). Repše has been critical of the People’s Party’s performance in the past, and of Šķēle in particular once his own administrations ran into the familiar problems of corruption and poor management.

Moreover, there is some wariness of creating a “grand coalition” government where too many of the largest parties are in power. Such arrangements seem to guarantee peace for a time but ultimately lead to great voter frustration as policy directions are always compromises.

But above all, the People’s Party in its stated policies is also very close to New Era, and the issue of maintaining a distinction between it and any other party is very much in New Era’s mind. So it’s “no” to the People’s Party.

Perhaps the most striking aspect of all this to an outside observer is not the horse-dealing but the rather leisurely way in which it all takes place. No outcome should be expected until the Saeima meets in early November, and even then it is not certain there will be a decisive outcome. Talks behind the scenes go on all the time but publicly there are only occasional meetings and announcements, and very often news of government formation is relegated to the back pages. No one is in a hurry, and to have a country drift without a clear government (the outgoing government of Prime Minister Andris Bērziņš is in caretaker mode) does not seem to faze anyone.

While the makeup of the new government is difficult to predict, it is useful to remember that a New Era-led coalition could still fail to materialise. In that case New Era and probably the First Party of Latvia would go into opposition, while a government could be formed by a coaltion of the People’s Party, the Greens and Farmers Union, and For Human Rights in a United Latvia (Par cilvēka tiesībām vienotā Latvijā, or PCTVL). PCTVL is the other big winner in the 8th Saeima and has declared its willingness to work with any party except the nationalist TB/LNNK. PCTVL has been in coalition government in the Rīga City Council and in several other local governments, thus patiently building its local reputation, and has had the advantage of always being the most vocal opposition voice to national centre-right governments.

A “grand coalition,” where Repše has to join with Šķēle, also cannot be entirely discounted.

Of course, there’s always the potential for a surprise.

Although perhaps unlikely to apply in this case, the Latvian parliamentary system is one where you do not have to be a member of the Saeima in order to be a minister—even a prime minister. This provision was used when the Latvia’s Way coalition after the 6th Saeima election could not agree on a candidate for prime minister from among its ranks. Instead, it picked well-known businessman Šķēle, who at the time was not a member of the Saeima and who had no political party base. Šķēle made the most of his opportunity and eventually formed the People’s Party, which is still well represented in the new Saeima.

This time around, could a potential stand-off be avoided by designating an outside candidate for prime minister? While it would be hard for Repše to stand aside, stranger outcomes have been known.

An election postmortem

The 8th Saeima elections of Oct. 5 produced a largely predictable result, justifying the claims of political pollsters in Latvia. Despite the predictability, the new Saeima lineup now portends significant changes to the balance of power in Latvia and the nature of future governments.

The highlights:

  • New Era (Jaunais laiks) – the newly formed party of the former Bank of Latvia governor, Einars Repše,  will be the largest party with 26 seats in the 100-seat Saeima.
  • As in previous elections, several sitting parties were not able to get past the threshold of 5 percent of the vote and so will not be represented in the new parliament, most significantly Latvia’s Way and the Social Democrats.
  • For Human Rights in a United Latvia (Par cilvēka tiesībām vienotā Latvijā, or PCTVL) increased its representation strongly and now holds 24 seats.
  • The other largest party in the previous Saeima, the People’s Party (Tautas partija) was returned with only a slight drop in numbers.
  • Meanwhile, the nationalist For Fatherland and Freedom /Latvian National Independence Movement (TB/LNNK) suffered a loss in support, dropping to seven from 17 seats.
  • One of Latvia’s oldest political parties, the Farmers’ Union, has returned, this time in coalition with the Greens.

The biggest winner of the election was Repše’s New Era party with 26 seats, well short of a majority but an outstanding result for a newly formed party. Campaigning on the basis of honest government, combating corruption, entering European institutions and ensuring the integrity of Latvian independence, this party will now have to govern in a coalition to realise its aims.

Almost equally impressive were the gains made by the PCTVL coalition, ensuring a Moscow-oriented opposition remains strong in the Saeima. The gains of PCTVL came in part from the demise of the Social Democrats.

Another big winner that must be noted is the People’s Party, which largely held its own in these elections, losing only three seats from its 1999 result, and avoiding the fate of other previously governing parties of declining dramatically at subsequent elections.

The coalition of the Greens and Farmers Union—a highly unusual and perhaps unique coalition 00 performed strongly to win 12 seats. The Farmers Union is one of Latvian’s oldest traditional parties, now recovered from its years in the wilderness, but how it performs in tandem with the Greens remains to be seen.

Finally, one other new party gained representation, the First Party of Latvia (Latvijas Pirmā partija). Latvian elections always throw up at least one curiosity and this is it. Dubbed the “religious party” and having on its list some prominent clergy, it also has a number of other decidedly less spiritual politicians, including some familiar managerial and bureaucratic faces from previous parties no longer represented in the Saeima. They may be hardest to predict of all.

The story of the big losers is equally interesting. Latvia’s Way, the party that has formed part of every government in post-independence Latvia, and which has provided most of the prime ministers and ministers, fell agonisingly short of the benchmark with just 4.88 percent of the vote. Long criticised for the bureaucratic, apparatchik and professional politician manner in which it performed, it nevertheless also had some of Latvia’s best-known and respected politicians. Its failure also means the absence of one of the strongest voices for integration with European institutions such as the European Union and NATO. It remains to be seen if New Era and the People’s Party can push these policies, to which they say they committed to as well.

Other big losers were the Social Democrats. Not for the first time in their colourful history they split before the elections, this time into three separate lists, splintering the vote so that the largest—the traditional Latvian Social Democratic Labour Party (LSDSP)—gained just over 4 percent. Splits in the Social Democrats centred on ideological issues and on what relationship should hold with the Moscow-oriented PCTVL. On the Rīga City Council, the LSDSP and PCTVL are in a controversial coalition, but those not trusting this coalition of convenience split from the party.

Also among the significant losers must be counted TB/LNNK, which lost 10 seats and now precariously holds only seven. TB/LNNK was overtaken by the success of New Era, which is less overtly nationalistic in its program but which clearly attracted a large number of former TB/LNNK voters. For example, while a majority of voters outside Latvia previously strongly supported TB/LNNK, this time a majority of them voted for New Era. TB/LNNK had also had its own internal problems, not least being unable to prevail with its harder line nationalist policy on issues such as language policy and citizenship rights. Some if its coalitions in local governments also have not performed well.

By contrast, both PCTVL and the People’s Party had concentrated a great deal on performing at the local government level. This is now a significant feature in Latvian politics, and will reward careful monitoring. The PCTVL, while widely regarded as a former communist and Moscow-leaning party, has often performed credibly at the local government level and knows the value of competent politicians being visible locally. Equally, the People’s Party contested and won a number of local councils, with an emphasis on developing local economic enterprises.

Finally, one of the significant losers was the small but widely publicised Freedom Party (Brīvības partija), modelling itself on Joerg Haiders’s rightwing party in Austria with an overtly racist campaign, including claiming that entry to Europe will mean flooding the country with black immigrants. They gained only 0.2 percent of the vote.

So, what do we have?

  • A highly popular but relatively politically inexperienced new party, New Era, most likely forming the basis for a centre-right coalition government.
  • A very experienced and confident opposition in PCTVL, therefore maintaining a nationality-based politics as the continuing mode of Latvian politics, rather than a more standard left-right political spectrum.
  • Another more experienced centre party—the People’s Party—capable of being effective critics if New Era should stumble.
  • The disappearance of the highly experienced Latvia’s Way, and another split in the Social Democrats.
  • And the Farmers Union is back, this time with the Greens.

And last, for those of you who have followed the labyrinth of the Latvian election system and the election results, there is still one even more complex aspect of Latvian politics: how governments are formed. But more about that later.