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Sunday, 06.10.2024, 10:23
Latvia reached agreement with international lenders
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The announcement was made tonight by Prime Minister Valdis Dombrovskis, who added that now officially Latvia must consolidate the state budget next year by an additional 150 million-180 million lats, writes LETA.
The lenders also supported the re-channeling of EUR 300 million ( LVL 210 million) that was previously allocated for stabilization of the financial sector to budget deficit needs. This amount money, however, will only be available after the plan for selling "Citadele banka" will be submitted to the European Commission for approval at the end of May, said Dombrovskis.
In the past two years a series of important, yet unpopular decisions were made to stabilize the economy, restore the competitiveness and sustainable growth. Currently, the projected consolidation amount is 150 million-180 million lats, and it can be adjusted depending on the economic situation and the implementation of the state budget. By meeting Maastricht criteria in 2012, Latvia will be able to join the eurozone in 2014, which will foster the economic growth, attract new investments, and increase the welfare of all Latvian residents, emphasized the premier.
Mark Griffith from the IMF confirmed that agreement was finalized, and that the negotiations left a positive impression.
The budget deficit will be reduced to 4.5% of gross domestic product (GDP) this year. In 2012, Latvia will try to reach a 2.5 percent deficit and focus on the fulfillment of Maastricht criteria.
Griffiths emphasized that the additional LVL 150 to 180 million budget consolidation measures will present a challenge for Latvia, however, he Griffiths is sure that the country will be able to handle it.
The head of the European Commission's mission in Latvia, Gabriele Giudice, lauded the agreement and stressed that the Commission recommends Latvia to focus on a 2.5 percent budget deficit.
The lenders also emphasized that Latvia must continue to focus on structural reforms and utilization of European Union funds.
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