Estonia to lend money to Latvia to help it fight the economic crisis

BBN Estonian Business News Channel
Toomas Hõbemägi
December 12, 2008

Estonia is participating in a joint effort to lend money to Latvia earmarked to help the country to overcome the current liquidity crisis.
Estonian Prime Minister Andrus Ansip was yesterday in Brussels at a meeting of heads of government of EU member states which included a meeting dedicated to helping Latvia.
Estonia is member of a group of Nordic and Baltic area countries that according to unconfirmed information includes Finland, Sweden, Norway, Denmark, Lithuania, Poland and Germany that have decided to lend Latvia money to ease pressures on the country’s finances.
“Latvia has put together a very comprehensive programme for overcoming the crisis. It is unique that this package was developed in cooperation with IMF, EU and a group of Nordic and Baltic countries,” said PM Ansip.
One option is that Estonia would use some of its reserves as a loan given to the Latvian state. However, the government has not yet decided how much money Estonia could lend Latvia.
Latvia has agreed to cut next year’s budget by EEK 13 billion. The country’s estimates that it may need to borrow up to EUR 5 billion of which about half could be provided by Nordic countries.