EU bails out Eastern Europe
Photo: European Commission
EU leaders pledged a 125 billion euro bailout for eastern Europe and the International Monetary Fund after rejecting American calls to put more taxpayer cash into their own faltering economies. And this infusion of cash could not have come at a better time as previously-annouced aid packages were quickly eaten up by countries on the verge of economic ruin.
At a two-day summit in Brussels, the EU leaders agreed to double the loans available to eastern Europe to 50 billion euros and add 75 billion euros to the IMF's lending capacity.
The increased loans to eastern Europe come after the initial 25 billion euro in aid was rapidly depleted by 10 billion euros after Hungary and Latvia tapped into the fund to save their struggling economies. With Romania also potentially needing the fund, there was concern that there would not be enough aid and widespread economic turmoil would result.
Latvia's Prime Minister, Valdis Dombrovskis attended the recent EU summit, despite having been selected as Latvia's leader only three weeks ago.
He said he is hopeful that the EU bailout can lift struggling eastern European economies, but Latvia has made contingency plans to at least weather a few more months of the financial storm.
"We have money in the treasury until the end of June in case we do not continue to receive the next transfers of international loans"
Listen to a report from Vanessa Mock:
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by Students
23.03.2009
Latvia
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