The Latvian President has threatened to dissolve Parliament after violent riots in the capital left 40 people injured.
President Valdis Zatlers said that he would dissolve the legislature by the end of March unless lawmakers agree to reforms to help restore political and economic order.
Currently, the Latvian economy is the lowest in the European Union. In the third quarter of 2008, the country’s GDP fell by 4.6%.
On Tuesday thousands of people took to the streets of Riga in protest against the government's handling of the credit crisis. Clashes with police erupted when the protestors tried to storm the Parliament building.
The riot is thought to be the country's worst in nearly two decades.