The conservative People’s Party (Tautas partija), which for months has been critical of Prime Minister Valdis Dombrovskis, has quit Latvia’s coalition government and recalled its ministers. The move comes just days after the government marked a full year in power.

The party announced its decision March 17 after failing to get Dombrovskis to agree to a program of no new taxes, government reform and budgetary belt-tightening. The government, the People’s Party announced on its Web site, is following a course that “apparently will be directed to increasing taxes, maintenance of an ineffective state apparatus and postponement of unpopular decisions until after the elections.”

Latvia’s parliamentary elections are set for October. Dombrovskis’ party, New Era (Jaunais laiks), recently joined with two other parties in the centre-right coalition Unity (Vienotība) to campaign together in the elections.

Just before the decision to withdraw from the coalition, Dombrovskis had urged the People’s Party to refrain from ultimatums and to give the full coalition time to consider the party’s suggestions.

“If a year ago you agreed to stay in the government,” Dombrovskis wrote in a letter to the party, “knowing that you too will have joint responsibility for the situation in the state, then I ask the People’s Party even now to work together until the Saeima elections, as we pledged when forming the government.”

Since becoming prime minister, Dombrovskis has steered the government through massive budget cuts, unpopular tax hikes and acceptance of large loans from foreign lenders. The People’s Party has several times criticized the government’s actions.

The People’s Party had asked Dombrovskis to support four measures:

• To hold off on tax increases for this year and 2011.
• By May 1 to propose to the parliament government reforms to reduce the number of ministries and to turn over some state functions to the private sector. The Latvian government has 14 ministries, but the People’s Party wants the number cut to eight or nine. Turning some functions over to the private sector, according to the party, could save the government LVL 100 million a year.
• To begin work on the 2011 budget by June 1 and to present it to the Saeima not later than Sept. 1—before the October election.
• By July 1 to come to an agreement with the government’s social partners—employers and workers—about actions and responsibilities that would lead to renewing the nation’s economic growth.

Although it has quit the coalition, the People’s Party will not ask the Dombrovskis government to step down, according to media reports. However, without the People’s Party’s backing, the government controls just 47 of the 100 seats in the Saeima.

President Valdis Zatlers said he regrets the People’s Party’s decision to quit the coalition, and criticized it for wasting time in the name of short-term political interests, according to a spokesperson. Zatlers said he continues to support the Dombrovskis government.

Ministers recalled by the People’s Party include Foreign Minister Māris Riekstiņš, Justice Minister Mareks Segliņš, Culture Minister Ints Dālderis, Health Minister Baiba Rozentāle, and Regional Development and Local Government Affairs Minister Edgars Zalāns.

Parties remaining in the government coalition are New Era, Civil Union (Pilsoniskā savienība), the Union of Greens and Farmers (Zaļo un Zemnieku savienība), and For Fatherland and Freedom (Tēvzemei un Brīvībai / LNNK).