By Aija Braslina and Patrick Lannin
RIGA, Oct 2 (Reuters) - Latvia's prime minister has won Saturday's election and can form a majority government, exit polls and partial results showed, which will keep the country following IMF-led austerity steps aiming at eventual euro entry.
A clear win for the coalition would be a triumph for Prime Minister Valdis Dombrovskis and the most reassuring result for investors by decreasing political risk.
Dombrovskis has already taken Latvia through harsh budget cuts and tax rises to fulfil the terms of a 7.5 billion euro ($10.24 billion) bailout agreed with the International Monetary Fund (IMF) and the European Union (EU).
More austerity measures await the nation of 2.2 million people to reduce the budget deficit on the path to euro entry, which under the IMF and EU deal is targeted for 2014.
With votes counted at 573 out of 1,013 polling stations, the Unity party of Dombrovskis was leading at 31 percent, second largest coalition party the Union of Greens and Farmers was at 25 percent and third partner Everything for Latvia/For Fatherland and Freedom was at 7 percent.
Latvian public television LTV said such a result would give the coalition 66 seats in the 100-seat parliament.
Two exit polls after voting ended also predicted a majority for the coalition, which is currently a minority government.
'Voters have quite clearly voted for stability,' Dombrovskis told reporters after the exit poll results.
He repeated he would aim to re-form the current government and that talks with other parties would begin on Sunday.
Despite the budget cuts, Latvians have regarded Dombrovskis as an honest crisis manager of the mess left by other governments. The economy has also begun to show a slow recovery from the 18 percent economic drop of 2009, the worst in the EU.
People have also accepted the budget measures, which has included public sector pay cuts of 50 percent, with forbearance. The only public display of anger was a riot in Riga in January 2009, before Dombrovskis took over power.
An exit poll by news agency LETA and Dienas Mediji predicted 61.7 percent of votes going to the ruling coalition, with Dombrovskis's Unity bloc winning most votes at 33.48 percent.
Another poll by public Latvian Television, news agency BNS and Riga Stradina University said Dombrovskis's Unity bloc would come top with 33.58 percent of the vote, with a combined coalition vote of 55.1 percent.
RUSSIAN PARTY CHALLENGE
The main challenge to Dombrovskis had come from a party with strong support among the large Russian minority, Harmony Centre.
The election results showed it in third place, though few polling stations had been counted in capital city Riga, where many Russian-speakers live and which is a stronghold of support for Harmony Centre.
The exit polls showed Harmony Centre winning second place.
Harmony Centre had hoped that anger over the crisis would win it the largest share of the vote, including from some disillusioned ethnic Latvians and possibly give it a place in government for the first time since the 1991 fall of the Soviet Union.
The IMF and EU programme aimed to reduce the budget deficit, avoiding a devaluation and paving the way for euro adoption in 2014. Domestic critics have said the plan puts too much emphasis on austerity and not enough on economic stimulation.
Nordic states, whose banks such as Swedbank and SEB are heavily exposed to the Baltic region, also provided funds for the bailout.
(Editing by Mark Trevelyan) ($1=.7322 Euro) Keywords: LATVIA ELECTION/ (Riga newsroom, patrick.lannin@reuters.com, patrick.lannin.reuters.com@reuters.net, +46 70 721 1007) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
RIGA, Oct 2 (Reuters) - Latvia's prime minister has won Saturday's election and can form a majority government, exit polls and partial results showed, which will keep the country following IMF-led austerity steps aiming at eventual euro entry.
A clear win for the coalition would be a triumph for Prime Minister Valdis Dombrovskis and the most reassuring result for investors by decreasing political risk.
Dombrovskis has already taken Latvia through harsh budget cuts and tax rises to fulfil the terms of a 7.5 billion euro ($10.24 billion) bailout agreed with the International Monetary Fund (IMF) and the European Union (EU).
More austerity measures await the nation of 2.2 million people to reduce the budget deficit on the path to euro entry, which under the IMF and EU deal is targeted for 2014.
With votes counted at 573 out of 1,013 polling stations, the Unity party of Dombrovskis was leading at 31 percent, second largest coalition party the Union of Greens and Farmers was at 25 percent and third partner Everything for Latvia/For Fatherland and Freedom was at 7 percent.
Latvian public television LTV said such a result would give the coalition 66 seats in the 100-seat parliament.
Two exit polls after voting ended also predicted a majority for the coalition, which is currently a minority government.
'Voters have quite clearly voted for stability,' Dombrovskis told reporters after the exit poll results.
He repeated he would aim to re-form the current government and that talks with other parties would begin on Sunday.
Despite the budget cuts, Latvians have regarded Dombrovskis as an honest crisis manager of the mess left by other governments. The economy has also begun to show a slow recovery from the 18 percent economic drop of 2009, the worst in the EU.
People have also accepted the budget measures, which has included public sector pay cuts of 50 percent, with forbearance. The only public display of anger was a riot in Riga in January 2009, before Dombrovskis took over power.
An exit poll by news agency LETA and Dienas Mediji predicted 61.7 percent of votes going to the ruling coalition, with Dombrovskis's Unity bloc winning most votes at 33.48 percent.
Another poll by public Latvian Television, news agency BNS and Riga Stradina University said Dombrovskis's Unity bloc would come top with 33.58 percent of the vote, with a combined coalition vote of 55.1 percent.
RUSSIAN PARTY CHALLENGE
The main challenge to Dombrovskis had come from a party with strong support among the large Russian minority, Harmony Centre.
The election results showed it in third place, though few polling stations had been counted in capital city Riga, where many Russian-speakers live and which is a stronghold of support for Harmony Centre.
The exit polls showed Harmony Centre winning second place.
Harmony Centre had hoped that anger over the crisis would win it the largest share of the vote, including from some disillusioned ethnic Latvians and possibly give it a place in government for the first time since the 1991 fall of the Soviet Union.
The IMF and EU programme aimed to reduce the budget deficit, avoiding a devaluation and paving the way for euro adoption in 2014. Domestic critics have said the plan puts too much emphasis on austerity and not enough on economic stimulation.
Nordic states, whose banks such as Swedbank and SEB are heavily exposed to the Baltic region, also provided funds for the bailout.
(Editing by Mark Trevelyan) ($1=.7322 Euro) Keywords: LATVIA ELECTION/ (Riga newsroom, patrick.lannin@reuters.com, patrick.lannin.reuters.com@reuters.net, +46 70 721 1007) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.