Latvia Still Pushing To Change Terms Of IMF Bailout - PM

RIGA, Latvia (AFP)--Latvia is still trying to renegotiate the terms of an international package intended to rescue its rapidly sinking economy, Prime Minister Valdis Dombrovskis said Thursday.

Dombrovskis told reporters that in particular Latvia wanted approval to use some of the funding earmarked for Latvia's banks to bridge the Baltic state's yawning budget deficit.

"Let me make something clear, we're not asking for any additional money," he said, explaining that the government simply wanted to shift some of the funds from the banking sector stabilization pot in the total EUR7.5-billion bailout.

Latvia secured the bailout from the International Monetary Fund, European Union and other lenders, including leading regional investor Sweden, in December as the country's economic crisis deepened.

Latvia, a former Soviet-ruled republic which joined the E.U. in 2004, had boasted double-digit economic growth in recent years but is now in the grip of the bloc's sharpest recession.

Output in this country of 2.3 million people fell 4.6% in 2008 compared with the previous year. It is expected to drop by 16.5% this year on the same basis.

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May 14, 2009 09:38 ET (13:38 GMT)


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