OREANDA-NEWS. On 07 May 2009 was announced, that Valdis Dombrovskis, Prime Minister of the Republic of Latvia, during his one-day working visit to Germany, met representatives of the German banking sector.

The highly recognised the commitments and accomplishments of Dombrovskis’ Government during its almost one hundred days in Office in relation to the review of the budget expenditures, initiation of structural reforms and stabilisation of the banking sector in Latvia, incl. Parex bank. The German side reaffirmed that its banking sector is interested in the Latvian and Baltic market in the long term but in view of the current economic situation any investment considered thoroughly by taking into account involvement of the respective country and financial sector in providing funding for joint projects.

The German financial experts strongly disagreed with the option of devaluating the Latvian national currency and the Latvian Prime Minister shared this point of view by noting that this variant is not even considered or admitted as possible.

During this meeting the representatives of the German banking sector recognised Latvia’s investment environment and the market in general by particularly stressing that Latvia can boast highly qualified labour resources. There are anticipation that despite the current economic crisis Latvia could be one the first countries to overcome the problems in view of the active measures undertaken by its Government and Latvia’s specific geographical location between Russia and the European Union.

The German side maintained – provided the current structural reforms are implemented according to the plan, the international assessment of the Latvian financial market would be soon improved.

The sides also exchanged information concerning the financial situation in Latvia and Germany. Prime Minister Valdis Dombrovskis informed the representatives of German banks and financial institutions about Latvia’s cooperation with the International Monetary Fund and the European Commission in order to receive an international loan. The Head of the Latvian Government pointed out to the fact that the current negotiations envisage a 7% budget deficit which would be a good basis for further drafting of the budget amendments. The Prime Minister informed about the projected structural reforms in health care and education, the situation in Parex bank by emphasising that the agreement concluded with the EBRD is a significant step towards stabilisation of bank’s activities and the whole financial sector of Latvia.

Prime Minister Valdis Dombrovskis also presented the proposed scenarios for budget expenditure cuts and specific budget items related to sensitive social issues which will not be subjected to any reduction. The German side showed interest not only about the financial situation in Latvia but also about the social situation.

The German side was represented by the Association of German Banks, Deutsche Bank, Landesbank Berlin AG, Alianz SE, Global Banking, German Reconstruction Bank KfW, Commerzbank AG, UniCredit Group HypoVereins Bank, German Savings Bank Association, German Post Company, German Stock Exchange and representatives of the Humboldt University of Berlin.