Latvian government issues response to Homes Overseas

Country:  Latvia

5 February 2009

The Latvian government has defended its country’s economy, following a recent Homes Overseas story which reported that the country could find itself falling into bankruptcy within the next couple of years.
 
Earlier this week, homesoverseas.co.uk issued a report – Latvian economy in freefall – which suggested that: “The Baltic State of Latvia could go bankrupt within the next two years”, citing data compiled by the Centre for Strategic Research.

However, despite admitting that “Latvia does face harsh economic challenges”, Indra Freiberga, Counsellor of Economic Affairs for the government of Latvia, insists that our claims are wide of the mark.

Freiberga says: “The current global economic situation has an impact on the Latvian economy, however, this is being cushioned by EU structural funds of €4.5bn [£3.93bn], 2007-2013. The European Commission, the IMF, the World Bank, the European Bank for Reconstruction and Development, jointly with several European Union countries, have also agreed to provide support.

“Latvia with financial support totalling £6.6bn, has prepared a very tough programme for recovery, with the exceptionally strong policies needed to address these challenges.”
 
Citing Latvia’s Finance Ministry’s report on economic recovery for 2009-2011, Freiberga reveals that approximately £2.37bn - or 36% of the total amount provided to Latvia - will be used to stabilise the financial sector.

Freiberga continues: “Sustaining the government’s large fiscal adjustment will be critical to the success of the programme, and financial sector reform to strengthen the banking system will also be key.”
 
Freiberga also insists that Latvia still hopes to complete its European transformation by adopting the euro currency in 2012.

Fellow Baltic States Estonia and Lithuania are also facing challenging economic times.