The Latvian cabinet approvedamendments increasing the government deficit this year by $90million, BNS reported August 24. That will bring the deficit upto 20 percent of the country’s GDP, the news service said. Asa result, Latvia will not be able to do much to contain the bankingcrisis sparked by the failure earlier this year of the country’sBaltija bank. Meanwhile, in response to the financial panic inMoscow, Latvia’s Parex Bank has decided to temporarily suspendinterbank loans to Russian financial institutions, BNS reportedAugust 24. Meanwhile, the German Investment and Development Companyannounced that it would invest just over $1 million to help shoreup the troubled Latvian banking system.
Kuchma Criticizes Predecessor’s Mistakes in Economic Policy.