Brussels, 22 November 2008
In view of the adverse effects of the global financial turmoil on the economic and financial situation in Latvia, the Council Presidency and the Commission express the European Union's commitment to provide financial support to the country in the context of the market pressures that have recently emerged.
We are in close consultations with the Latvian authorities and the International Monetary Fund to develop a joint response to the growing tensions in Latvia's financial markets. The EU stands ready to participate in a coordinated financing package with the IMF conditional upon a strong commitment by the Latvian authorities to implement a rigorous and credible adjustment programme in order to underpin balance-of-payments sustainability in Latvia.
Under Council Regulation 332/2002, the EU can grant medium-term financial assistance to Member States outside the euro area. This arises from Article 119 of the Treaty, which says assistance can be provided to a member "in difficulties or seriously threatened with difficulties as regards its balance of payments either as a result of an overall disequilibrium in its balance of payments or as a result of the type of currency at its disposal".