Analytics, Economics, EU – Baltic States, Financial Services, Forum, Latvia

"We had this debate in Latvia, that it's a bad idea to cut expenditure during a crisis, it's a bad idea to raise taxes, so let's wait until the economy stabilizes, let's use the budget deficit as a fiscal stimulus and deal with the debt afterwards," said Dombrovskis.

"But unfortunately this logic doesn't function for one simple reason – financial stability is a precondition for economic growth," he insisted.

According to Dombrovskis, the Latvian experience shows that austerity measures must be implemented quickly, but Greece is trying to delay this adjustment, reports LETA.

"They've been in an international program for more than a year, since May 2010, and we see there's much less confidence about Greece now than more than a year ago," he said.

Nevertheless, he acknowledged that Athens were "doing quite a lot", noting that Greece's austerity measures were "no joke."

"But apparently they are not doing enough to convince markets and to convince pretty much everyone. These delaying tactics are not working," he said.

"It's better to do this adjustment when it's necessary. Also for the public, as they say 'Okay, now we see the light at the end of the tunnel, however bad it is now.'"