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Monday 21.08.2017 | Name days: Linda, Janīna
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Vilks: sanctions against Russia may force Latvia to return to austerity measures

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUWhile the European Union and other sides have introduced actual sanctions against Russia, Latvia still hesitates to take any action. This is because Latvia’s economy would not be able to maintain its 4% growth rate if sanctions against Russia are introduced.

Russia remains Latvia’s largest cooperation partner, says Finance Minister Andris Vilks.

It was previously estimated that Latvia would remain the most rapidly growing economy in the European Union. The previous growth rate was estimated at 4.3%. Now the outlook is 4%. Instability in the region may impact growth rates even more.

‘The development of the situation with EU and Russia remains unclear. It is uncertain whether or not there will be waves of sanctions. Large sanctions against Russia would make it impossible for Latvia to grow 4%. Russia is Latvia’s largest cooperation partner. Sanctions would impact this dramatically,’ – said the minister in his interview to Latvijas Radio.

Vilks also mentioned Latvia’s readiness to return to austerity measures: ‘If there was no Russian factor, we would not speak of austerity. We would discuss topics like effective state and business management. This would allow us to allocate more finances to support other sectors. The Russian factor does not allow us to do this at the moment.’

‘We know what austerity means. If the situation was to escalate or become more intense in the region, it is clear we will have to return to austerity measures,’ – said Vilks.

The minister noted that is the situation escalates, austerity will be more important that the risk of ‘provoking the European Commission with a growing budget deficit, which would mean a stop for the use of EU funds.’

As previously reported, EU Foreign Ministers plan to gather on May 12th to discuss the situation in Ukraine, as well as consider the possible reaction of the EU to recent developments there.

‘Preparations in regard to restrictive measures [against Russia], as you may know already, will continue,’ – said EU High Representative for Foreign Affairs Catherine Ashton Press Secretary Maja Kocijancic.

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  1. mike walsh says:

    You can’t beat pragmatism, a rare commodity in the parliaments of the European Union. Then again, the income of politicians will be unaffected. Except of course for those who hold shares in the armaments and related industries. Now they could be in on a killing.

    Thumb up 0 Thumb down 0

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