EU disbursed third instalment of € 0.5 billion Community financial assistance to Latvia

This third disbursement was part of a €7.5 billion multilateral financial assistance package agreed in January 2009. It follows a positive assessment by the Commission of the implementation by the authorities of the economic conditions attached to this disbursement.

>> Press release of 11/3/2010. Commission makes a 0.5 billion disbursement  

Payment in instalments

The EU assistance comprises six instalments. The first instalment of Community assistance of €1 billion was released on 25 February following the entry into force of a Loan Agreement and Memorandum of Understanding (MoU), after consultation with the Economic and Financial Committee. The second instalment of  EUR 1.2 billion was disbursed on 27 July 2009. Today, the third disbursement of EUR 0.5 billion was made.

The remaining instalments are planned for the third quarter of 2010 (up to EUR 200 million), the first quarter of 2011 and the end of 2011 (both up to EUR 100 million).

Memoranda of Understanding with Latvia - previous steps

20 January 2009
The ECOFIN Council approved Community medium-term financial assistance for Latvia totaling up to €3.1 billion under the Balance of Payments (BoP) facility for non-euro area Member States.

26 January 2009
The Memorandum of Understanding (MoU) associated with the Community assistance was signed in Riga by the Prime Minister, the Minister of Finance, the Governor of the Bank of Latvia and the Chairwoman of the Financial and Capital Market Commission.
>> EU provides €3.1 billion Community financial assistance to Latvia

28 January 2009
Commissioner Almunia signed the MoU in Brussels. The MoU details the precise conditionality that will be applied to successive loan disbursements.

27 May to 17 June 2009
The Commission in cooperation with IMF staff  carried out a first review mission.

July 2009
Based on the findings of the review mission, a Compliance Note of the Latvian authorities of 26 June 2009 was evalued. In addition and in consultation with the EFC, the economic policy criteria for the second instalment as laid down in the MoU were evalued and were considered to be broadly fulfilled or not applicable in view of the larger-than-expected deterioration in the economic situation.

13 July 2009
The first Supplemental MoU (SMoU) was signed, including new conditions. In particular, conditions foresee new budget deficit targets for 2009-2012 of no more than 10%, 8.5%, 6% and 3% of GDP, respectively (ESA 95 terms).
>> EU to release second instalment of Community financial assistance to Latvia

27 July 2009
The second disbursement of EUR 1 billion was completed.
>> EU disburse second instalment of € 1.2 billion Community financial assistance to Latvia

13 October 2009
Commissioner Almunia welcomed the preliminary agreement reached by the Latvian government to reduce the 2010 budget deficit.
>> Statement on Latvia by Commissioner Almunia, after meeting with the Latvian government in Riga

22 February 2010
The second SMoU complemented the previous Memoranda of Understanding of 26 January 2009 and 13 July 2009. It paved the way for today's disurbsement of 500 million and spelled out the conditions for subsequent BoP disbursements.