Latvia. In 1996, L. became a year of some stabilization
after the turbulent 1995, with its banking crisis, GDP fall
and prolonged government formation following an election
that produced a very fragmented result.
Countryaah.com, President Guntis Ulmanis was re-elected in June for a
second and final three-year term. He is reasonably generally
considered to have held his office well and to be a
stabilizing factor in the otherwise often chaotic Latvian
The six-party government under Prime Minister Andris
Skele survived and got a lot done, despite the occasional
difficult internal teardown. Particularly, it stormed within
the Democratic Party Husbonden (Democratic Party Saimnieks,
DPS), the largest party in parliament. A power struggle in
the party summit meant that the real couple Aivars Kreituss
and Ilga Kreituse left the party and in connection with this
were dismissed from their positions as finance minister and
president of saeiman. New President became Alfred's Cepanis.
Party leader Ziedonis Cevers also left the government. He
thus appeared to be Prime Minister Skele who wanted to
abolish his Vice Prime Minister post in his quest to make
the government apparatus more efficient.
The economy stabilized somewhat during the year. The
inflation rate continued to decline, as did the interest
rates on the government debt. But growth was insignificant.
The trade balance remains negative, poverty is widespread
and social unrest and impatience are significant. One step
that can be significant in attracting foreign investment is
the decision on a balanced state budget for 1997. At the end
of the year, successes were noted in the fight against the
extensive smuggling traffic with not least alcohol.
In foreign policy, the approach to the EU continued. The
dispute with Estonia over the fishing limits in the Gulf of
Riga was resolved, following Swedish mediation. On the other
hand, the contradictions with Lithuania regarding the
boundary between the economic zones of both countries in the
Baltic Sea, with their oil deposits, remain. Negotiations
with the Russian Federation on a border treaty are on a low.
In September 1988, the Club for the Protection of
Latvia's Environment (VAK) organized an environmental
demonstration that gathered 45,000 people standing hand in
hand along the Baltic coast in protest of the uncontrolled
pollution from the Jurmala paper mill west of Riga. The
following month, the Communist Party of Latvia replaced its
leadership, incorporating politicians with greater popular
support and supporters of reform. The national flag was
allowed and Latvian made into national language.
In October, about 150,000 people celebrated the formation
of the Latvian People's Front (LTF), which consisted of both
social groups, newly arrived politicians and communists. The
following month, hundreds of thousands of litters marked the
country's independence day for the first time since the
Soviet occupation. The LTF gained a strong influence on the
local government and the Moscow authorities.
One year later, the LTF Congress adopted economic and
political independence. Despite Moscow's opposition to
Latvia's detachment, LTF's policy received widespread
popular support. The front worked for change with peaceful
means, through public demonstrations, free elections and
parliamentary resolutions. The support also came from the
Russian population and from other nationalities. Latvia now
went into operation following the 1938 Constitution, which
had been in effect until the Soviet occupation in 1940.
On May 4, 1990, a declaration of reinstatement of
independence was issued, and at the same time it was decided
that the country should be provisionally governed by the
1922 Constitution. In September 1991, the new Soviet Council
of State formally recognized its independence from the
Baltic States. At the same time, they were immediately
recognized diplomatically by several states and admitted to
the UN at a session of the General Assembly that month. The
three Baltic States began negotiations with the EU on trade
relations and financial assistance. In February 92, an
agreement between Latvia and Russia on the withdrawal of
Soviet troops from Latvian territory was signed.