Door Natalija Gnezdova en Jean Counet (English)
The collapse of Latvia
Latvia is one the countries which suffered from the world economic crisis the most in Europe. Its economy was internally overheated by easy possibility to borrow money, overpaid labor force and incredibly overrated real estate prices. So when the world crisis touched Latvia, it was already on its slippery slope down in the spiral of losing its ability to repay debts, productions, competitiveness and attractiveness for investors.
Door Natalija Gnezdova en Jean Counet (English)
Budget cuts for European help: thousands unemployed
In 6 months time the country, which had highest GDP growth in Europe in last years, almost went bankrupt. Europe couldn't let the devaluation of the Latvian national currency happen - it is seen as a worst case scenario for Europe and specially for Swedish owned Latvian banks. Additionally it could cause national currency devaluation of neighbor countries, Lithuania and Estonia. So Europe came to help saving and supporting the crashing economy with billions of loans. Of course, on certain conditions: mostly cutting national budget. Craving for European help, Latvia signed the agreement and started to cut its budget, on account of pensions, education financing, social programs and trying to cut its governmental programs and institutions.
Thousands of people were losing their jobs overnight with no alternatives to follow. For example thousands of teachers were fired this August, just a month before the new school year began. The best alternative of some were going to be cleaners or night guards in their own schools. Those are dozens, the rest are still unemployed.
At the same time in the private sector started feel the crisis. A lack of any financial support from the side of government, increasing taxes and unwillingness of banks to give new loans caused bankruptcies
In a years' time most export production came to a halt. People lost their jobs. According to official data from November 2009 the unemployment rate is 14%, but the unofficial statistics say that this number is at least 25% and by the end of 2009 will be close to 200,000 people. Municipalities have trouble due to lacking money for social benefits. The number of unemployed grew too rapid and was not predicted to be so high in any forecast.
Lots of people having trouble to find work at home tried to move to the UK or Norway or other countries, where it was possible to earn good money doing 'dirty' seasonal jobs. But the economies of those countries are in decline as well, so chances to find good job in the UK are close to zero. Lots of people are coming back home, having lost their jobs in building or production. Airport Riga announced incredible growth of passengers in recent months, mostly with one-way tickets.
Nowhere to go
And then there is a scary part of an underdeveloped social welfare system. In Latvia, if you lose your job, you get unemployment benefit only for 9 months, after that you are on your own. No support program will give you money. In the best case if you can prove you have no income and can't pay the bills, you can get some of your bills covered and work for it for free on public work like cleaning the yards. It is estimated that by the end of 2009, more than 80,000 unemployed will have run out of their unemployment benefit. And there is no work or any prospect of finding work and nowhere to go.
Crime rates are climbing very sharply in Latvia. Organized crime starts to be as well developed as it was in 1990s after the collapse of the Soviet Union. Additionally, there are more and more news about crimes committed by Eastern Europeans in Western Europe. Easy locks and a general trust in people are very helpfull for traveling thieves. With no other perspective, Western Europe will feel the desperation of its Eastern part very soon in its own crime records.
As the crisis came so unexpectedly, and the possibilities to borrow money to buy flats, cars, houses were so easily available for almost a decade, every fourth person in Latvia has some financial obligations from credit institutions. With no way to repay the loans, banks have no mercy and take away people?s property, which worth is decimated in a year time.
According to Latvian legislation, if somebody's debt for communal payments equals 300 LVL (450 EUR), which is less than 3 months of regular payments, the case goes to court. The court can take away the property and sell it for debts. People are thrown on the street without any further consideration. So in 6-12 months time you can go from losing your job to becoming an official homeless.
Protests: what will it change?
However, though unemployment rates are incredibly high and possibilities to find work close to zero, still people didn't go for demonstrations or fight for their rights on the streets. There are several reasons for that:
First of all, any protests or demonstration in Latvia should be approved by local municipality, which will then give the order for police to guard it. Any unauthorized gatherings are prohibited and will be prosecuted by police. So in Latvia it is not possible to protest without proper organization and preparation, which requires money and organizers at least.
Another reason is people's mentality. Nobody will go to demonstrations or protests untill the moment they have absolutely nothing to lose, because they fear to be involved in something what might look bad later. Latvians are not used to take initiative and always need a leader to mobilize them and tell them what to do. As most of the leaders to follow are in the government, there is no one who tells people to get out on the streets and fight for their future. The ones who do that are too weak and have too limited resources to mobilize people.
The last, but most important reason of the lack of protests: what will it change? There is a disbelief that those actions will change anything. Latvia had never experienced socialism, no protests ever lead to change of anything in the political and social arena. Though protests against property nationalization or for minority rights do happen regularly, it never in any way influenced government policy, work or decisions.
Fear of chaos
There are constant rumors circulating that unauthorized protests will start very soon all around the country, as people came close to the final desperation point of 'nothing else to lose' and 'nowhere else to go'. As situation gets worse and worse, the country is expected to go into chaos sooner or later. And then it will be hard to protect it, as 2000 police units were fired this year due to the budget cut. In my home time Daugavpils, people are talking about creating special teams from the population to guard peace in neighborhoods when the fights start. Authorities deny any possibility of massive protests and punish strictly the ones who even attempt to do it in any way.
It is hard to predict when the real massive protests start, but most likely after new cuts of budget for 2010 will be announced.
December and January are expected to be very chaotic, as down point of human's patience is almost reached and desperation is the word that describes general mood in Latvia at the moment.