RIGA — Prime Minister Valdis Dombrovskis has come out in defense of the memorandum the government signed with the International Monetary Fund in order to dispel the “systematic lies” spread about the document — a clear jab at the People’s Party.

The Wednesday statement came a day after the People’s Party lashed out at the memorandum, which essentially outlines the IMF-approved economic revival program, and announced it had refused to sign onto it despite being the senior ruling coalition member.

By doing so, the People’s Party, whose approval rating is extremely low, has drawn a line in the sand and is trying to distance itself from the increasingly unpopular center-right government.

The People’s Party said in a statement that it couldn’t support a document that essentially “puts the brakes on” any economic development in the following years. The party said the government’s task should be reinvigorating domestic production and not making maximum reduction in expenditures and raising taxes.

Still, party leaders said they would not prevent the government from signing the memorandum with the IMF.

Some analysts slammed the People’s Party for erratic behavior, since if it was truly dissatisfied with the memorandum it should have either prevented the government from signing it or left the ruling coalition. The People’s Party’s refusal to ink the memorandum is no less odd since it agreed to the previous document with the IMF and other international lenders in July this year.

Yet with it extremely low rating, the People’s Party feels it must show its opposition to IMF-mandated reforms and cutbacks that many Latvians feel are the cause for the current hardships. Without a clear demarcation, the People’s Party risks being associated with the current government in the minds of voters – a situation that could seal the party’s fate in national elections next October.

For his part, Dombrovskis said that “in order to prevent the further spread of spurious information,” he wanted to point out the key components of the memorandum, including size of the budget deficit, tax reform, and pension payments.

Observers are uncertain whether the current government — clearly split between New Era and People’s Party — will be able to last until the next elections. Instinctively the People’s Party would prefer to quit the coalition and move into the opposition, but party leaders apparently feel that the loss of power and ministerial posts would harm the party’s chances at re-election more than sticking with the unpopular Dombrovskis government.