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Protests rock Latvia

Mark Mardell | 10:45 UK time, Tuesday, 3 February 2009

RIGA, Latvia

Since dawn the tractors have been circling their prey. Like some heavy prehistoric beasts, tractors with their scoops raised surround the ministry of agriculture. The farmers are angry and are demanding the resignation of the minister and higher prices for milk. Tractors blocking entrance to Latvian agriculture ministry

They are not alone in either their anger or the demand for more money and for political heads to roll. Just about every interest group blames the government for making the economic crisis worse. There is a vote of confidence in parliament tomorrow and it's touch and go if they can survive.

The head of the Latvian Employers' Federation, Elina Egle, has suggested there should be a business strike if things don't improve: factories should close their gates and bosses should withhold taxes. She tells me the government won't talk and won't listen and the business community has lost faith in them. But she doesn't have much time for the opposition either, saying that they haven't thought through their plans. If I may mix my ornithological metaphors, just about everyone thinks the politicians stuck their heads in the sand for too long before pulling them out and running around like headless chickens.

Ms Egle thinks Latvia should have joined the euro in the good times, and should use it now unilaterally. As we leave her office she and our fixer exchange what has become a common Latvian salutation "Be strong!" There is no faith that politicans will be strong for them.

Half the population lives in the capital Riga, where the up-market shopping centres are testimony to the boom years. After Latvia joined the European Union many people took out huge loans to pay for new cars, to do up their houses and buy the luxury goods they had been denied. Scandinavian banks were vying with each other for business, eager to give the biggest and cheapest loans. All the time the government was building up a huge debt. As Latvians travelled to Ireland, Britain and Scandinavia to find work, wages went up to attract them back.

Those good years took Latvia to a great height, and now it has crashed to the ground with a sickening thud. Surveys suggest that it is suffering more than any other European economy. The IMF has given huge loans and the government is trying to make massive cuts to balance the books. Wages of civil servants are to be cut by a third, some schools and hospitals are closing, VAT has been put up to 21% and more cutbacks are certain. This in part led to the . Some see it as a very worrying moment. Latvia is used to changes of government and lively street protests, but free Latvia is not used to political violence. Ivars Laizans with daughter

Ivars Laizans was there before the demo turned nasty. He's a 36-year-old policeman but he wasn't one of the cops in full riot gear. He was there as a steward on the march, part of the protest. It's an understatement to say he's fed up. I met him in the apartment on the edge of Riga that he shares with his wife and two children. He tells me at least he's lucky that he inherited the flat from his mum, so he avoided taking out a massive loan.

He sits at the kitchen table and helps his four-year-old daughter Laima with a painting. Even she is a victim of the crisis. The police no longer get the perk of a free nursery place. He says his colleagues just don't know what will happen next.

"I used to get my salary and know where I was. Then they cut my bonus, then they cut the perks, and now they're cutting the salary itself. All the time the cost of living is going up Free kindergarten has gone, free medicines have gone. Everything costs money these days.. I don't know whether I will have a job in the future: people come to work not knowing if they will be fired the next day. The government doesn't even seem to think they need the police anymore."

He thinks the government has to resign. "There's never any discussion about what they are going to do. They just go ahead and do it. No one believes them any more. They say one thing one day, and then do something else the day after. It's not just me saying this. It's what the whole country thinks."

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