LV: Latvia receives another EUR 200mn tranche from EC.

By bne IntelliNews October 21, 2010
Latvia received another EUR 200mn tranche of the international support loan from EC, State Treasury reports. This makes total amount transferred by EC EUR 700mn (all of the funding planned this year). Total amount of international loan to Latvia stands at EUR 4.4bn, out of which EUR 2.9bn is granted by EC and EUR 1.1bn by IMF. As commented by EC representatives, Latvia is on the right course of budget consolidation in 2010, but it has to continue fiscal corrections and should not ignore the risks of rising imports and inflation. Meanwhile, head of the Bank of Latvia Ilamrs Rimsevics believes that at least another LVL 400mn-large budget consolidation is needed to ensure sustainable economic and financial stability. He stressed that this needs to be reached by the means of cutting expenses and not tax hikes. Rimsevics argued that Latvia's competitiveness recovered and tax hikes might lead to a long period of stagnation.

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