Wednesday, June 3, 2009

I know we are distracted....

...but there are other nasty things happening in the world. Like in Latvia for example...

From today's Telegraph:

The central bank has been burning reserves to defend the lat in Europe’s Exchange Rate Mechanism, but markets doubt whether Latvia has the political will to carry through draconian cuts in spending – or whether such a policy even makes sense at this stage.

Tremors hit bank shares in Stockholm and triggered a sharp fall in Sweden’s krona. Swedbank, SEB and other Swedish banks have $75bn of exposure to the Baltic states, and face cliff-edge losses if the pegs snap.

“Latvia may be a small country but it has vast repercussions for the region,” said Bartosz Pawlowski, of BNP Paribas. “If the currency breaks in Latvia, it is likely to break in Estonia and Lithuania as well, and perhaps Bulgaria, with effects on other countries like Romania.”


  1. You mean ...

    ... the Eurovision Song Contest for next year might be put in jeopardy ???

    Oh noes !

  2. Apparently the ECB refused to let Latvia devalue when it got its loan from the IMF, who wanted a devaluation as a condition of the loan.

  3. Latvia should default IMO.

  4. I hope nothing terrible happens in Bulgaria. You have to love a country where for one lev you can get a hundred stotinkis.

    "Comrade, can you spare a stotinki ?"