It Is a High Price For a Help

At the end of the last year International Monetary Fund (IMF) approved a 1.68 billion euro rescue loan for Latvia. Representative of IMF says that this was one of the largest loans ever offered by the Fund. Czech Republic, Poland and Estonia contributed 400 million euros to the bailout. The loan will cost 3, 000 euro for every Latvian.

Latvia had to take the loan as they haven’t saved money for hard times – all budgets were without any reserves and fact that all around the world companies had troubles with managing short term financial problems somehow influenced country too.

Already at the end of the last year Latvia got from the IMF the first part of the loan – 589,60 milliards euro.
Latvia got the first 1 milliard euro from European Commision, they have confirmed that the total amount of loan will be 3,1 milliards euro.

The largest amount of rescue loan will be invested stabilizing finance sector:
36% -- goes to finance sector stabilization (in March government decided to give 232,5 millions euro to help “Parex” bank to pay their credit)
35% -- will go to cover government budget deficit
21% -- is for to refinancing the government debt
8% -- covering government budget loans

This doesn't seem as as a good rescue plan for country; the government is being criticized for not being able to set priorities for national economy. Experts say government should invest money in developing manufacturing industry, not in saving banks.

European Commission is carefully following Latvian government actions and also currently advice them on budget savings/changes.