Latvian PM Quits over Economic Crisis

by Jordan Yerman | February 20, 2009 at 07:52 am

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Having survived an earlier no-confidence vote, Latvian Prime Minister Ivars Godmanis has resigned over the ongoing economic crisis and its effect on Latvia. His coalition government will disband, and a new coalition- or new government must now be formed.

The credit crunch killed Latvia's growth spurt, and the year ahead is expected to be bleak.

Earlier the two largest parties in the ruling centre-right coalition had demanded the PM's resignation.

International lenders, including the IMF, World Bank and EU, have pledged 7.5bn euros (£6.6bn; $9.5bn) to shore up Latvia's struggling economy.

Protesters demanding the government's resignation clashed with police in the capital Riga on 13 January.

"It is possible they will be able to work out a new coalition but I think what it really means is new elections," said Lars Christensen, head of emerging markets research at Danske Bank.