Financial Services, Latvia, Legislation, Loan

"Sanctions, per say, no, and one of the reasons is that Latvia is a graduated country. Years ago, Latvia crossed a development threshold and decided that they no longer needed to have a close financial relationship with WB, so our ability to sanction is very limited and we don’t see it as our role," Packard explained.

The economist reminded that with the nature of this type of lending, WB disburses directly into a social account.

"But we finance the budget and it is similar to the way that money from other partner agencies is used so we don’t monitor each euro, how it is spent, but we do monitor the outcomes," he stated, adding that in this process WB has an excellent partner – the State Audit Office.

Packard also reminded that a second loan is currently under negotiation (in the amount of LVL 100 million).

"If we felt like the government had not achieved some of the benchmarks that we have set out, it’s not a case of getting up from the table and walking away it is a case of asking questions about what is the problem, and in partnership with the State Audit Agency, determine where the obstacles are," said Packard.