After the recent economic global meltdown Latvia, like so many of her European counter parts needed substantial international financial borrowing. A figure of 7.5 billion euro was promised in December 2008 from the European Commission, International Monetary Fund, World Bank, European Bank for Reconstruction and Development and a number of European Union member states. The loan was to be spread out in annual staggered payments, the last of which becoming available at the end of this year.
Recently Latvia’s Prime Minister, Valdis Dombrovskis, announced his plans to fund repayments, which are due to start in 2012, by issuing Eurobonds. Lending was originally decided upon to stabilise Latvia’s financial system giving the country a chance to increase competitiveness and enhance economic growth. Today Latvia’s economic recovery has exceeded expectations to such a degree that the full extent of this year’s allotment of international European lending may not be required.
