Riga - Latvian President Valdis Zatlers refused to bow to calls that he should launch the process of dissolving the unpopular national parliament Wednesday, instead offering a compromise plan to both government and opposition parties in the troubled Baltic state.

Zatlers has been caught in a constitutional pincer since January 14 when, in the wake of riots in the capital Riga, he gave the coalition government of Ivars Godmanis until March 31 to become more responsive to the people or face the prospect of dissolution.

The January 13 riots erupted after a peaceful rally calling on Zatlers to dissolve parliament turned into the worst civil unrest Latvia has seen since it won its independence from the Soviet Union in 1991.

Speaking at Riga castle Wednesday, Zatlers maintained his position but offered an olive branch to the government, suggesting that if it became more inclusive and recruited some opposition parties to its ranks, it could remove the need for fresh elections.

"The situation in the country is such that both the ruling coalition and the opposition should jointly assume responsibility. There won't be any losers or winners. Victory or defeat of the country, victory or defeat of the nation - these are the stakes," warned Zatlers.

He described his plan as "a compromise with concrete proposals and concrete points."

The president also floated the idea that two expert "forums" to discuss political and economic matters should be established, based on the existing Finnish model.

"We need to be aware that at present there is not only an economic crisis, but also a political crisis," said the president.

Zatlers also outlined four amendments to the Latvian constitution that he wants the existing parliament to pass before his March 31 deadline.

The amendments would make it easier for presidents to dismiss an unpopular or uncooperative parliament without having to call for a national referendum.

Zatlers spoke as the latest Eurobarometer public opinion poll was released showing that Latvians have less faith in their rulers than any other country in the European Union.

Eurobarometer data showed that 91 per cent of Latvians do not trust political parties, 86 per cent do not trust parliament and 79 per cent have no confidence in the government.

Sentiment has turned sharply against the four-party ruling coalition in Latvia on the back of a sharp downturn in the economy. After a decade of breakneck growth, the economy slid into recession during 2008 and is expected to contract by around 5 per cent this year.

Such was the magnitude of the crisis that Latvia was forced to turn to the International Monetary Fund (IMF) in December to arrange a 10-billion-dollar international assistance package including contributions from the EU, World Bank and neighbouring countries. (dpa)