Latvia needs real help, urges Soros

Of all the members of the recession-hit EuroZone, the pint-sized economy of Latvia has fared the worst. Once fast-growing, it contracted a whopping 18% in the first three months of 2009. Although it received a $7.5billion loan aimed at stabilising its economy, it struggles with serious problems in the private sector. Now it’s found a friend in George Soros, globally respected hedge-fund guru. Lenders, led by the EU and Sweden, have imposed tough conditions on their loan, demanding Latvia cut its spending by almost $1billion a year between now and 2012. These conditions are very stringent and not necessarily rooted in reality, claims Soros, pointing out that public spending is already under control and shock therapy might kill the patient. We doubt Euro bureaucrats will pause to think about it, though.