By Aija Braslina
RIGA (Reuters) - Latvians are set to vote in favour of dismissing parliament on Saturday in a referendum called to combat the power of oligarch businessmen, leading to an early election and a new government later in the year.
The last election was only in October 2010. Analysts expect any new government to include at least one party from the existing coalition, which broadly favours economic policies of fiscal rigour with an eye to eventual adoption of the euro.
Latvia is emerging from the European Union's worst recession -- its economy fell 18 percent in 2009 due to swingeing budget cuts similar to those now being carried out in embattled euro zone countries. The government wants to adopt the euro in 2014.
"I will vote in favour (of dissolving parliament) in order to dismiss the oligarchs," said information technology worker Kristaps Vaicis.
The referendum, the first of its kind in the Baltic state's history, became necessary after then-President Valdis Zatlers, who has now formed his own political party, called for a referendum to dissolve the parliament over a corruption row.
He was angered by parliament's refusal to allow prosecutors to search the home of a rich businessman, who is also a member of the legislature.
Zatlers said he wanted once and for all to end the political influence of a trio of rich men, known as Latvia's oligarchs.
This parliament and its predecessors have often been a focus of people's discontent and mistrust.
POPULAR EX-PRESIDENT
Political parties are already starting to prepare for the election, which could take place in late September. The potential level of support for Zatlers' party, called the Zatlers Reform Party, is the joker in the pack.
Zatlers, who gained popularity for his move against parliament, could join a new government if he does well in the election. One poll last week said Zatlers could enjoy 33 percent support.
Otherwise, the main contenders are the parties that form the present government, which consists of two centre-right parties, and is led by Prime Minister Valdis Dombrovskis.
At the last election, his Unity bloc came first, even though he had led the country through the difficult budget cuts.
The latest opinion polls, conducted in June, show the Russian minority Harmony Centre party could win the most seats in parliament. It led polls before the last election too, but eventually came second, behind Unity, and went into opposition.
The Unity bloc, which promotes itself as Latvia's saviour from crisis, is running second in opinion polls, while government partner, the Union of Greens and Farmers, is third.
The Union of Greens and Farmers is led by Aivars Lembergs, the powerful mayor of port city Ventspils. He is one of the three businessmen whose influence Zalters wants to eliminate.
(Editing by Alistair Lyon)
