Riga - Latvian Prime Minister Valdis Dombrovskis said
Wednesday negotiations with the International Monetary Fund (IMF)
over a 200-million-euro (280-million-dollar) loan payment were
proving 'difficult.'
Speaking on Latvian public radio, Dombrovskis struck a much more
cautious note than he did on Monday, when he had said he was
optimistic about receiving the cash.
'Discussions with the lenders are difficult and the conditions
which the IMF proposes are also quite tough,' Dombrovskis said. He
refused to reveal details, but said the IMF was making new demands.
Representatives of the European Commission and the IMF are in
Latvia to assess wide-ranging fiscal and structural reforms
introduced by his coalition government.
The European Commission has already promised a 1.2-billion-euro
payment will be made by the end of July, but the IMF has yet to
decide whether it will release a scheduled 200-million-euro payment.
A previous payment of the same amount was withheld after the IMF
decided reforms were not happening fast enough.
Both payments form part of a 7.5-billion-euro (10-billion-dollar)
aid package from international lenders agreed in late 2008.
However, Latvia's economic outlook has deteriorated significantly
since the deal was signed by Dombrovskis' predecessor, Ivars
Godmanis.
The economy is expected to contract by at least 18 per cent in
2009 and unemployment has risen to around 15 per cent.
In an effort to balance the books to satisfy lenders, Dombrovskis
has introduced hard-hitting austerity measures, including tax hikes
and big public sector wage and spending cuts.
On Monday the cabinet announced plans to sack around a third of
staff working at government ministries.
USA
Your Talkback on this Story