Latvia’s government has collapsed after the Prime Minister bowed to growing pressure and resigned. The two biggest groups in the four-party coalition had called for Ivars Godmanis to go as public opinion turned sharply against the administration for its handling of the economic crisis.
The Baltic state fell into crisis right at the start of the world financial downturn. It is the second government to fall victim to the world’s economic troubles after Iceland. The coalition could not decide what to do in the face of financial meltdown. Last year, Latvia needed a 7.5 billion euro handout from the IMF to keep going. Farmers and other groups protested about falling incomes. The President is to start talks on forming a new administration. Some analysts believe there might have to be new elections.