Borg beats bailout drum following belt tightening in Riga

Swedish finance minister Anders Borg on Tuesday urged international lenders to open their coffers to Latvia after the country agreed to slash government spending.

Latvia vowed on Monday to cut its budget by 10 percent in a drive to meet the terms of an international bailout which the recession-hit Baltic state needs to avert an economic meltdown.

“We’ve seen responsible movement now in terms of commitment from Riga,” Borg told several journalists on the sidelines on an EU finance ministers’ meeting in Luxembourg.

“We also need to see other people strengthening their commitment to solve the situation, in particular IMF and the international community.”

Sweden in particular has been following developments in struggling Latvia because Swedish banks are heavily exposed to the country through loans they made before its boom turned to bust.

In December, Latvia won a €7.5 billion ($10.5 billion) bailout from lenders including the International Monetary Fund (IMF) and the European Union, with its economy expected to contract a huge 18 percent this year.

Under the terms of the rescue package Latvia has to do all it can to rein in its deficit — the shortfall between state revenue and spending — and has been paring public services and wages to the bone.

Last week, parliament approved a deficit equivalent to 9.2 percent of Latvia’s gross domestic product, nearly double the 5.0 percent originally agreed with lenders.

Lawmakers are expected to pass the revised budget on June 17.

If Latvia fails to make the promised cuts, it could be forced to do without a tranche of more than €2.0 billion from the international loan package, raising the spectre of debt default and economic meltdown.

Riga has been battling mounting speculation that the crisis could force it to devalue its currency, the lat, which is pegged to the euro.

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Brits in EU risk losing UK bank accounts ‘within weeks’

Some of Britain's biggest banks have begun contacting customers in European Union countries, warning them that their accounts will be closed down within weeks because the cost and complexity of operating without a continuation of pan-European banking rules is too much.

Brits in EU risk losing UK bank accounts 'within weeks'
Lloyds Bank expects to close at least 13,000 accounts. Photo: Lloyds Bank
According to a report in The Times, thousands of Britons who live in Europe face being stripped of their UK bank accounts and credit cards, because of the UK government's failure to agree rules for operating after Brexit. 
Each of the EU's 27 member states has different rules for cross-border bank accounts which will start to apply immediately the UK's transition period ends on 31st December 2020. 
“In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense,” a source at one British bank told the newspaper. “This is passporting — this is the reality of Brexit.”
If a way is not found to continue pan-European banking rules, or passporting, UK banks will br breaking the law if they don't apply for new banking licenses in each European Union Country. 
Lloyds, Britain’s biggest banking group, began writing to customers in August, warning them that their bank accounts would  close down on December 31.
The bank estimates that 13,000 customers, including those based in Holland, Slovakia, Germany, Ireland, Italy and Portugal, would lose their accounts. 
“If customers have regular deposits into, or payments out of, their account, they will need to make other arrangements before their account is closed,” the bank said. 
Barclays and Coutts have also started contacting customers. 
“In light of the UK leaving the EU at the end of 2020, we continue to review the services we offer to customers within the European Economic Area (EEA), and any impacted customers will be contacted directly,” Barclays said in a statement. “The timings for account closure will depend on the type of product that a customer holds, but we will always give notice to customers.”
“In the event that no alternative to the European Economic Area passporting regime for financial services is agreed between the UK and EU, we have taken the difficult decision to withdraw from offering our services to clients who reside in the EEA,” Coutts said.