Latvia's austerity programme in vain

The financial crisis prompted Latvia to implement a stringent austerity programme in a bid to avoid state bankruptcy. But the results are disappointing, writes the national-conservative daily Neatkarīgā rīta avīze: "Latvia has been perfectly obedient, taken out loans and renounced its sovereign right to devalue the national currency to overcome the crisis sooner. Instead a so-called internal devaluation took place [with wage reductions] that went on for two years. With this policy the Latvian government has allowed its population to be used as guinea pigs for a new branch of science: experimental economics. ... If we now take a look at the developments in Greece we see that the course of unflinching obedience adopted by [Prime Minister] Dombrovski has not been rewarded. If we had all gone on strike and ignored the demands of the IMF, half our debts would have been pardoned in the end."

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