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RIGA, Latvia (AP) — Latvia's government teetered on the verge of collapse Wednesday after the largest party pulled out of the center-right coalition over disputes about how to handle the country's recession — the deepest in the European Union

The right-wing People's Party announced that it was recalling its five ministers from the government and moving into the parliamentary opposition after Prime Minister Valdis Dombrovskis refused to back the party's economic rescue plan.

Dombrovskis, a member of the center-right New Era, said the plan was "populist" and earlier on Wednesday called on the People's Party to act "responsibly" while Latvia, a country of 2.3 million, struggles to overcome the worst economic crisis since it broke away from the Soviet Union in 1991.

Laila Dimrote, a spokeswoman for New Era, said the government would continue with a minority in Parliament.

"This is not a big deal. Latvia has had many minority governments in the past, and often this is the case prior to elections," she said.

Dimrote said it was not clear how the government would divide the five vacant ministries, including the crucial Foreign Ministry, and that over the next few days the coalition would try to gauge the level of cooperation it could count on from the opposition.

Latvia's economy has undergone the steepest fall in the 27-member EU — gross domestic product fell 18 percent last year — and barely averted bankruptcy in 2008 after a group of international lenders led by the International Monetary Fund and the EU approved a €7.5 billion ($10.2 billion) bailout plan for the Baltic state.

In its most recent review of the plan, IMF officials praised Latvia's government for efforts in cutting budget expenditures and implementing painful reforms.

The political instability is not expected to affect the IMF plan since there is a consensus among Latvian leaders that without it the country would be forced to make even more painful cuts.

Latvia's government will now control up to 47 seats in the 100-member Parliament, and opposition parties said they would be willing to cooperate on certain issues. Lawmakers are unwilling to topple the government given that only six months remain until parliamentary elections.