Latvians shell-shocked, resigned to economic pain

By Balazs Koranyi and Jorgen Johansson

RIGA, June 17 (Reuters) - Schoolteacher Daila Klinstone has seen half her income disappear in Latvia's budget cuts. But she is more shell-shocked than angry and says she will not take to the streets in protest.

Teachers, hospital workers and pensioners are taking the heaviest blows in Latvia's battle to avert national bankruptcy. The health minister has quit rather than impose the latest cuts - the 'easy path' according to Prime Minister Valdis Dombrovskis [ID:nLH629470].

"I have three children... all of whom I have to support on my salary that'll be 124 lats ($245.9)," said Klinstone, a 47-year-old physics and chemistry teacher in Riga.

"I have no idea how we'll survive."

"I could protest but we are educated, cultured people with a code of ethics, we don't march on the streets."

Parliament passed spending cuts worth 500 million lats on Tuesday, 4 percent of GDP, through measures including a 20 percent reduction in public sector wages and a 10 percent drop in pensions.

Teachers were among the hardest hit. Their cut follows a 20 percent salary reduction approved earlier.

The government said it had no choice in the matter.

It had to act to avoid currency devaluation and secure international loans for an economy that is expected to contract by 20 percent this year.

Unions plan a protest on Thursday, but analysts said the demonstration was unlikely to precipitate change.

"It's just an opportunity to let off steam and let people say they are unhappy and angry, very angry, Janis Ikstens, a professor of political science at the University of Latvia said.

"There's no point in overthrowing or pushing out the government because then what's next? What can you do differently? You would still have to pass all those painful decisions," Ikstens said.

Dace Priede, a 21-year old student agreed: "I think people know that protests never change anything in this country, but I think there will be big protests anyway."

Riga's streets were calm on Wednesday and few if any expected a repeat of January riots, the country's worst violence since gaining independence from the Soviet Union.

Anger and helplessness prevailed.