The Latvian parliament voted for the creation of a new government on January 23, after over three months of a political deadlock that saw several attempts at building a multi-party coalition trip over conflicting party interests.

As a five-party affair, the new government appears fractious as well, however, consisting of the same parties that could not agree a common platform since the elections that took place on October 6. 

The new government is led by 54-year old Krisjans Karins, a US-born former economy minister and also an incumbent member of the European Parliament.

Karins’ own Unity Party will govern in coalition with the New Conservative Party, the populist KPV, the National Alliance, and liberal For Development/For! The coalition has a majority of 61 seats in the 100-seat parliament. The pro-Russian Harmony party and the Union of Greens and Farmers have been left out.

Karins said his government would put cleaning up the country’s financial sector top of his priority list. That is sorely needed in Latvia, where the governor of the central bank is awaiting trial on charges of corruption and where the third largest bank ABLV shut shop a year ago following US charges of money laundering and financing the North Korea regime. 

Before his cabinet was confirmed, Karins also talked about tackling corruption, reforming education, and improving healthcare.

Karins also confirmed Latvia would “continue its Euro-Atlantic course”. The Baltic state is an EU and Nato member state and has traditionally sought tighter cooperation and integration in both organizations, especially after Russia’s takeover of Crimea in 2014.

Karins’ New Unity will manage the ministries of foreign affairs and finance. The New Conservatives have been put in charge of justice, education, and transport. KPV will be responsible for economy, home affairs, and welfare. 

For Development/For! took over the ministries of defence, environment, and health. The National Alliance will be in charge of culture and agriculture.

Karins is taking over a booming economy. The Latvian GDP grew seasonally adjusted 5.3% y/y in the third quarter, data from the Central Statistical Bureau (CSB) showed on November 30. Household consumption and investment drove economic expansion.