Memorandum of Understanding between Latvia and EU approved

On Thursday, June 24, the Economic and Financial Committee of the European Union represented by Ministries of Finance and central banks of all EU Member States approved Supplemental Memorandum of Understanding (third addendum to the Memorandum of Understanding) between the European Union and the Republic of Latvia, meaning that this document is supported by all EU Member States. 

Still the Memorandum will be considered by the European Commission and after that signed. The Memorandum will be signed on the Latvian side by the Prime Minister Valdis Dombrovskis, Minister of Finance Einars Repše, Governor of the Bank of Latvia Ilmārs Rimšēvičs, as well as Chairwoman of the Financial and Capital Market Commission Irēna Krūmane, however on the EU side – by the Commissioner for Economic and Monetary Affairs.

The Memorandum of Understanding will continue Latvia’s international loan programme and is the result of the work done by international lenders’ review mission in Latvia in the end of May and beginning of June. 

The Memorandum includes evaluation of current economic situation in Latvia and concludes that the Latvian economy shows signs of recovery. The document fixes an agreement regarding the work to be done to prepare the state budget for 2011 and necessary amount of consolidation, approximately 395-440 million lats. The Memorandum also provides for continuation of tight fiscal policy and structural reforms to return Latvian economy on the growth path, for example, by improving EU funds acquisition and regulation of public procurements, implementing employment measures, as well as combating shadow economy.