This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/world/europe/7911983.stm

The article has changed 4 times. There is an RSS feed of changes available.

Version 2 Version 3
Dombrovskis chosen as Latvian PM Dombrovskis chosen as Latvian PM
(about 5 hours later)
Latvia's president has nominated former finance minister Valdis Dombrovskis as prime minister and asked him to form a new coalition government. Latvian President Valdis Zatlers has nominated former finance minister Valdis Dombrovskis as prime minister and asked him to form a new government.
Valdis Zatlers said he had chosen Mr Dombrovskis because he had sufficient support in parliament and because of his knowledge of finance and economics.
Mr Dombrovskis, who is a member of the European Parliament, is from the main centre-right opposition party, New Era.Mr Dombrovskis, who is a member of the European Parliament, is from the main centre-right opposition party, New Era.
Ivars Godmanis resigned as PM last week amid economic turmoil in the country. After being nominated, Mr Dombrovskis warned that Latvia was "on the verge of bankruptcy" and would need to make budget cuts or risk financial collapse.
Ivars Godmanis resigned as PM last week amid protests at the economic crisis.
Latvia's economy is in recession and is expected to contract by up to 12% in 2009, with unemployment rising by 50%.Latvia's economy is in recession and is expected to contract by up to 12% in 2009, with unemployment rising by 50%.
Mr Dombrovskis will now hold talks with Latvia's political parties on forming a new government. If they are successful, a list of ministers will be submitted to parliament for a confidence vote. Mr Dombrovskis, 37, will now hold talks with Latvia's political parties on forming a new government. If they are successful, a list of ministers will be submitted to parliament for a confidence vote.
"I wish Valdis Dombrovskis luck," Mr Zatlers said on Thursday."I wish Valdis Dombrovskis luck," Mr Zatlers said on Thursday.
Support lost 'Verge of bankruptcy'
Mr Godmanis, a member of the small Latvia's First/Latvia's Way party, resigned on Friday after losing the support of his two main coalition partners - the People's Party and the Union of Greens and Farmers.Mr Godmanis, a member of the small Latvia's First/Latvia's Way party, resigned on Friday after losing the support of his two main coalition partners - the People's Party and the Union of Greens and Farmers.
Latvia has experienced years of boom, but is now in recession Latvia's economic boom turns sourEuroblog: Latvian hard timesLatvia has experienced years of boom, but is now in recession Latvia's economic boom turns sourEuroblog: Latvian hard times
His government had come in for strong criticism over its handling of the economic crisis.His government had come in for strong criticism over its handling of the economic crisis.
It was forced to seek a 7.5bn-euro ($9.6bn; £6.7bn) bail-out from the International Monetary Fund, World Bank and EU in December, after nationalising Latvia's second-biggest bank.It was forced to seek a 7.5bn-euro ($9.6bn; £6.7bn) bail-out from the International Monetary Fund, World Bank and EU in December, after nationalising Latvia's second-biggest bank.
As part of the deal it has had to cut public spending and increase taxes - both unpopular policies.As part of the deal it has had to cut public spending and increase taxes - both unpopular policies.
A protest in the capital, Riga, on 13 January ended in more than 100 arrests and more than 40 injuries.A protest in the capital, Riga, on 13 January ended in more than 100 arrests and more than 40 injuries.
The Baltic nation was once the fastest growing economy in the European Union, but in the last three months of 2008 it was the worst-performing, with gross domestic product (GDP) falling 10.5%.The Baltic nation was once the fastest growing economy in the European Union, but in the last three months of 2008 it was the worst-performing, with gross domestic product (GDP) falling 10.5%.
Correspondents say a major reason for the decline was that locally-owned banks, which make up 40% of its financial system, were taking deposits from abroad and investing them in the property market. After being nominated as prime minister on Thursday, Mr Dombrovskis warned that Latvia was "on the verge of bankruptcy" and would need to make further budget cuts totalling at least 700m lats ($1.27bn; £889m) or else endanger funding from international lenders.
When the property market begin to decline and foreign credit dried up, confidence in Latvian banks evaporated. "The previous government hasn't fulfilled its obligations under the agreement with the IMF," he told reporters in Riga.
"Our primary task at the moment is to prepare budget cuts," he added. "There are no easy decisions here."
But Mr Dombrovskis said he would continue the former government's policy of keeping Latvia's currency, the lat, pegged to the euro.