Former Prime Minister Andris Šķēle, seen here at a People's Party event last year, could light the fire that burns down Latvia's ruling coalition. The coalition has shown signs of fracturing during this year's drawn-out budget negotitations.

RIGA — Andris Šķēle, one of Latvia’s most controversial politicians, has formally returned to the leadership of the People’s Party and announced his readiness to take up the prime minister’s post.

“I am ready to become Latvia’s prime minister,” Šķēle said in a terse statement through his press secretary after the the People’s Party board decided Monday that it would meet in November to change to elect a new chairman, which ostensibly will be Šķēle.

Although rumors of the three-time former prime minister’s return have been rife for months, the announcement, coming in the throes of Latvia’s biggest economic crisis since independence, created an instant media sensation.

The return of Šķēle, who announced his resignation from active politics in 2002, is designed to galvanize the People’s Party, which has the most seats in the Saeima but has seen its reputation plummet over the past three years. The party suffered a major defeat in municipal elections earlier this year and without an internal overhaul could fail in next year’s national elections.

Love him or hate him

Šķēle is a divisive figure in Latvian politics. Some wasted no time to pour vitriol after Monday’s announcement.

“The use of state power for personal gain, the support of one’s own, and manipulation of the law — those are several phenomena that significantly slowed the development of Latvia for the last ten years while Andris Šķēle and the People’s Party were at the helm,” commented Lolita Čigane, head of the Delna transparency center. Indeed, many critics will scoff at the so-called return, saying the Šķēle never really left active politics and has participated in every major decision over the past seven years.

Regardless, both supporters and detractors are likely to admit that the timing of the announcement is not coincidental. Not only is Latvia in an economic nosedive and begging international lenders for emergency funds, but there has been growing speculation that the days of the current government are numbered. Many observers believe that once the 2010 budget has passed, and the European Union and the International Monetary Fund agree to continue the economic assistance program, the People’s Party will pull out of the coalition led by Prime Minister Valdis Dombrovskis. In all likelihood this will collapse the government, and President Valdis Zatlers will have to shop around for a new prime minister candidate

Will he support the current government or not?

Šķēle, often dubbed an oligarch, still supports the current government.

“Andris Šķēle believes that the People’s Party must continue supporting the current government, which still enjoys the president and parliament’s trust,” the party said in a statement.

But speculation of imminent political instability is intense. Last week Riga Deputy Mayor Ainars Šlesers, another of Latvia’s so-called oligarchs, stated that he too was prepared to become prime minister. With that much smoke around, there is bound to be a fire somewhere.

The question is whether President Zatlers, if he is forced to select a new prime minister, would take the bait. Considering that Šķēle himself was one of the leader architect’s of Zatlers’ election in 2007 – which according to reports took place in Riga’s zoo – few doubt that the president would not hesitate to select Šķēle for the fourth time.