Analytics, EU – Baltic States, Financial Services, Latvia, Loan

Mark Weisbrot.

The IMF has signed 50 such agreements altogether, and 41 of them only made the situation worse in the borrowing country, said Weisbrot, also adding that the IMF had double standards.

When the United States, Europe and Japan are in recession, the IMF urges them to spend more, cut rates and increase budget deficit. But the IMF never pursues the same policy when medium and low-income countries are concerned, Weisbrot points out.

The idea of internal devaluation is brutal, and it will take Latvia years to overcome the losses caused by such devaluation, Weisbrot says. At one moment, society will no longer be able to accept this policy, he warns.

As reported, Latvia is planning to borrow EUR 2.7 billion from the international lenders this year, which is much less than the originally-planned EUR 4 billion, according to the Finance Ministry's report handed in to Saeima Budget and Finance Committee Thursday.

According to the Finance Ministry's report, this year Latvia will borrow EUR 700 million from the European Commission and EUR 500 million from the International Monetary Fund, writes LETA/Nozarelv.

The Nordic countries – Sweden, Denmark, Finland, Norway and Estonia - will give Latvia EUR 1 billion altogether.

Latvia will also receive EUR 200 million from the World Bank, whereas the Czech Republic, Poland and the European Bank for Reconstruction and Development will provide EUR 300 million in total.

In 2011, the European Commission will lend Latvia EUR 200 million, the Nordic countries – EUR 900 million, and the IMF - EUR 400 million.

So far Latvia has received EUR 3.3 billion altogether from the international lenders.