Latvia's president named Indulis Emsis prime minister on Friday, handing the compromise candidate the task of forming a new right-wing majority coalition and keeping preparations on track to join the EU in May.
"I have decided to nominate Indulis Emsis," President Vaira Vike-Freiberga told a news conference. "Emsis has all the right governmental principles, fighting corruption and working transparently," she added.
The government led by Einars Repse resigned two weeks ago after losing its majority a week earlier, when a junior coalition partner quit over a spat between Repse and his deputy prime minister which ended with Repse sacking his deputy.
Emsis, a deputy leader of the small Union of Farmers and Greens, will probably try to form a broad majority coalition to ensure stability in the run-up to EU and Nato entry this spring.
Vike-Freiberga had urged a quick end to the crisis to avoid a lengthy political limbo in the former Soviet republic of 2.3 million people.
But coalition talks hit a dead end because of continued squabbling among the leaders of the larger right-wing parties, giving Vike-Freiberga no option but to pick a compromise candidate from one of the smaller parties in parliament.
Politicians expect Emsis to ask all five right-wing parties to join a new majority coalition, but it looks unlikely that the parties of Repse and his former deputy will work together again.
Latvians have lived through years of political turmoil since regaining independence from Soviet rule in 1991. The Baltic state has seen 10 cabinets all fail to last a full term.
New Era won elections in late 2002 on a promise to stamp out corruption and mismanagement, and Repse remained popular among Latvians for his no-nonsense approach. But his strongman leadership style angered his coalition partners, who almost managed to oust him last September.
Party sources told Reuters they eye a coalition with the Union of Farmers and Greens, Repse's pro-business New Era, the conservative People's Party and the For Fatherland and Freedom Party, which would have 66 members in the 100-seat parliament.