Outsiders are wrestling with Latvia’s problems. The government is one of them
From The Economist print edition, Oct 15th 2009
Alive does not mean well. Unprecedented international efforts have kept Latvia, the European Union’s weakest economy, from disaster. At the height of the financial turmoil last autumn a bank run, currency crisis or similar mishap in Latvia could have caused a devastating collapse of confidence elsewhere. First in line were the other Baltic states, also suffering from popped credit bubbles and pegged currencies. But a failure in Latvia could also have hurt Sweden (where the banks have lent recklessly to the Baltic states) and might have capsized wobbly ex-communist economies farther afield, such as Hungary.
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