Banks, EU – Baltic States, Financial Services, Latvia

Mats Staffansson.

Staffansson says the banks worked transparently and did not break law. Their task was to make profit and they observed market regulations. It can be concluded that the regulations were far from being perfect, the ambassador says, reminding that Latvian economy was overheated and both local and international experts warned about possible consequences of unbalanced economy, writes LETA.

Staffansson comments that the previous governments and parliaments of Latvia did not listen to the warnings. Politicians did not pass appropriate legislation when it was needed and took mistaken decision, for example, did not impose tax on real estate, which resulted in steep hike of prices for property. Politicians, who saw this happening and did not prevent it are to blame for the current situation, Staffansson believes.

The ambassador says events in Latvia have not provoked much discussion in Sweden and have not affected the Nordic country considerably. He points out that Sweden simply feels solidarity with the Baltic States and understands their problems.

Over the past few months, in talks with the ambassador, heads of Swedish banks have admitted that although now the banks are suffering losses, it does not affect their stability as beforehand the profit figures were very high and banks were prepared for the "bad loans".

Staffansson positively assesses the decisions made by Valdis Domrbvoskis' (New Era) government and the reforms underway. He comments that Dombrovskis and Finance Minister Einars Repse are brave to take such unpopular decisions.

The Swedish ambassador expresses confidence that in the nearest future the International Monetary Fund will grant the next tranche of the international loan to Latvia.