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Big economic challenges facing Latvia's new leader

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Big economic challenges facing Latvia's new leader

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A former finance minister has been tasked with creating a new ruling coalition to end the country’s recent political turmoil.

President Valdis Zatlers said he nominated Valdis Dombrovskis to be prime minister because of his knowledge of finance and because he would have enough political support in parliament to lead a viable government. Dombrovskis is from the main centre-right opposition party, New Era. The previous four-party coalition of outgoing premier Ivars Godmanis collapsed amid a deepening economic crisis. The new government will have to pass further painful budget cuts as part of a financial rescue deal with the International Monetary Fund. These are likely to be deeply unpopular with a public that last month took its anger over the economic situation onto the streets of the capital, Riga.