Swedish banks warned on Latvian economy

Swedish banks warned on Latvian economy
Sweden’s finance minister Anders Borg is reported to have held secret talks with Swedbank and SEB, expressing his concern over Latvia's struggling financial situation.

The two banks have interests in the Baltic country and a financial collapse could lead to a ’nightmare scenario’ writes newspaper Svenska Dagbladet.

The news comes as Borg addressed EU finance ministers at an informal meeting in Gothenburg this week. He warned Latvia to get its finances in order if the country is to rely on continued international support.

”Political problems in Latvia seem partly to be making a comeback,” Borg said. ”It’s important that the government fulfils the international agreements they have agreed upon.”

In December 2008, the EU International Monetary Fund put together a rescue package for Latvia to the tune of 80 billion Swedish crowns.

Borg questioned the country’s budget decisions and stressed the need for the country to take action.

”The patience of international organisations is very limited,” Borg added. ”They don’t have much room to manoeuvre.”

Borg will attend the annual meeting of the International Monetary Fund in Istanbul next week.

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