Too Little Too Late?

Bloomberg reports that Latvian Prime Minister Aigars Kalvitis was on the Latvian Independent Television program 900 Seconds last night. His message, that "new government measures to slow inflation and cut the current account deficit will mean ministries must trim spending and plan for larger surpluses". Ministries, he said, will have to ``tighten their belts'' and the budget surplus will have to be ``much bigger'' than the planned 0.5 percent for next year.

The government is apparently planning to introduce a (another) stabilization plan. At the end of the day, I cannot help having a certain sympathy for the Latvian politicians and bankers concerned. Not that they couldn't have been doing more, but this situation - which is way beyond the "know how" of even the IMF and the EU commission - it seems, certainly can only find them wanting before the challenge. They are, at the end of the day, only human, and they should not be blamed for that fragility.

No one could really have anticipated the extent of the problems Latvia was destined to face back in 1990 when the wall came down and fertility suddenly plummeted. Now we all know better. There will be a lot to be learnt from what happens next, unfortunately the on-cost of the education process will be paid for by the Latvian and other East European peoples, who, lord knows, have already suffered enough.

History is far from kind in this case. In fact it seldom is.