Several thousand people protested on Thursday against harsh Latvian budget cuts needed to win more international loans, and the president said politicians in the ex-Soviet nation had to learn from past economic mistakes. The president and prime minister also said they apologised to people for the pain they were facing due to 500 million lats ($999.6 million) of cuts this year, including reductions in state salaries of 20 percent and in pensions of 10 percent.
-- EU Commission sees loan decision soon, backs currency peg
The demonstration was peaceful and attended by mostly middle-aged and elderly people, reflecting the fact teachers and pensioners have been hard hit by the cuts, which the government says are needed to save the country from bankruptcy. Some carried placards reading "Do not steal from poor pensioners" or "Happy teachers equals a good education".
"We also cannot save the state at the expense of pensioners, teachers, medical workers, policemen and cultural workers," union federation leader Peteris Krigers told the crowd. Finance Minister Einars Repse showed up at the meeting and entered the crowd to a mixture of cheers and boos, but he left the gathering when the crowd refused to let him speak.
The protest was an expression of anger at the cuts which Latvians seem to view with a mixture of resignation and shock. "I found out on the television my salary will be 130 lats ($260) a month, 130 lats, and the minimum subsistence level is 170, I don't understand how to live," said Inta Lindemane, 50, a teacher in a local authority kindergarten.
She said this meant her salary would be just a third of what it was before. Teachers say the budget cuts are falling most heavily on them with cumulative wage cuts of 40 or 50 percent. All of Latvia's efforts are aimed at unlocking further loans from a 7.5 billion euro rescue agreed with the International Monetary Fund (IMF) and European Union (EU) last year.
But the government has been criticised for taking too long in finding the cuts and for suddenly announcing the 500 million lat reduction figure after local elections. "We not only all have to admit but also take responsibility for the fact our decisions have often been mistaken, our actions have been mistaken ...," President Valdis Zatlers told parliament on its last day before a scheduled summer break. "We have managed our state badly," added Zatlers, who has been in office since mid-2007. Latvia's very existence was at stake, he said, urging parliament to start work immediately on next year's budget.
"We have to apologise to all of them (Latvians) personally," he said. In a statement released late on Wednesday, Prime Minister Valdis Dombrovskis also said he was sorry for the "situation and for the trials we will all have to face". On Wednesday, the health minister quit as he refused to carry out health sector reductions.
European Economic and Monetary Affairs Commissioner Joaquin Almunia told Latvian radio that the Baltic state can soon expect a decision from the EU on releasing a further 1.2 billion euros. Almunia said he hoped the decision from the EU would be positive and that it "will be agreed in the coming couple of weeks, before the end of June".
He said the loan for the Baltic state would be discussed at an EU summit, which takes place on Thursday and Friday, and then by finance ministers of member states. He reiterated that the Commission supported Latvia's desire to retain its currency peg to the euro. "I think this is the best option and that any other option brings very negative consequences," Almunia said.
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