Political Unrest Grows As the Economy Falters
Prime Minister Kalvitis resigned in Dec. 2007, following a series of widespread protests over his attempts to fire anti corruption investigator Aleksejs Loskutovs.
A series of riots sparked by political grievances and a worsening economy broke out in the capital, Riga, during Jan. 2009. Dozens were injured and more than 100 people were arrested in the violence.
Prime Minister Ivars Godmanis resigned in Feb. 2009, when the Latvian economy began to shrink at an alarming rate, a result of the global financial crisis. His government had become unpopular in 2008, when it was forced to increase taxes and cut public spending after the country's banking system collapsed. Valdis Dombrovskis of the center-right New Era party took over as prime minister in March, leading a six-party coalition government.
Latvia sunk deeper into a financial morass in 2009, with soaring unemployment that reached 22.3% in November—the highest rate in the EU—and heavy debt that prompted the government to implement steep budget cuts and turn to the IMF and the EU for a bailout. Dombrovskis lost his majority in parliament in March 2010 when his largest coalition partner bolted from the government in protest of the austerity measures. He resumed a majority after his coalition won 58.6% of the vote in October 2010 elections. His Unity party took 33 out of 100 seats, and his coalition partner, the Greens and Farmers Union, earned 22 seats.
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