EU – Baltic States, Financial Services, Latvia, Loan

Eduard Janota.

The loan, which has a seven year term and a 4.814% interest rate, was to have arrived in Latvian state accounts in two EUR 100 million (LVL 70 million) installments last year and this year. However, although the money was already available in summer 2009, a credit agreement has still not been concluded, writes LETA.

According to Biznes&Baltija, after yesterday's debate in the Czech parliament, there are now doubts as to whether these funds will be given to Latvia at all.

Janota expressed doubt that Latvia would be able to return the loan; moreover, an agreement over the loan has yet to be signed. "Who wishes to be the first to lend money to Latvia and cry about it later?" said the influential Czech politician, adding that of the seven countries who promised money (Norway, Sweden, Denmark, Finland, the Czech Republic, Poland, and Estonia), none have yet transferred any funds to Riga.

The Czech finance minister also claimed that the credit would be used for state purposes and pensioners, and not for important business projects as the Czechs had been hoping.

Janota also related that he had discussed the situation with his Polish counterpart Jan Vincent-Rostowski, who had indicated that the possibility was being considered of including penalties in the agreement with Latvia.

The Czech government could make their final decision in the next 14-20 days.