The European Commission, the IMF, the World Bank and the Swedish representatives have held joint discussions with the Latvian authorities
The discussions covered the implementation of the policy programme under the €7.5 billion multilateral assistance package. The Latvian authorities and the joint mission, which took place in Riga from 25 May until 7 June, agreed that the 2010 budget deficit target of 8.5% of GDP is within reach. There was also agreement that a further LVL 395 to 440 million net consolidation will be needed to reach the 2011 budget deficit target of no more than 6% of GDP (in ESA95 terms).
The mission concluded that although continued consolidation effort is necessary to put Latvia's public finances on a sound footing, meet the Maastricht criteria for euro adoption and create the stability necessary for economic recovery, Latvia's economic environment is beginning to improve. The economy is showing signs of stabilisation and is expected to start expanding already this year.
The EU's mission staff will now report to Brussels on their positive assessment of the programme implementation. Once this has been endorsed by the Commission and the EU Member States have been consulted, a Supplemental Memorandum of Understanding (SMoU) including the new measures agreed should be in place by July 2010.