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If you want to know what happens when the IMF come in, look at Latvia
November 15, 2010
In December 2008, the Latvian government was forced to seek an IMF bailout when it could not raise short-term funds. The payback, however, was immense. If Ireland needs similar help, stringent cuts across the board would be inevitable.
Last week, the Sunday Tribune spoke to a number of Latvian journalists about that bailout and how it has affected their country over the past two years.
Known as the ‘Baltic Tiger’, Latvia’s economy grew by 50% between 2004 and 2007. Not unlike Ireland, much of the country’s growth was generated by a credit-fuelled property bubble.
Paul Raudseps, economics editor of the Latvian weekly news magazine Ir, recalled: “We had a huge real estate bubble and we were importing more and exporting less. We were borrowing to pay for that deficit and then the global financial crisis hit.”
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