OREANDA-NEWS. On 18 May 2009 was announced, that during a working visit to Sweden, Valdis Dombrovskis, Prime Minister of the Republic of Latvia, met Frederik Reinfeldt, Prime Minister of Sweden. After the meeting the Swedish Prime Minister emphasised that in the long term Latvia has very good prospects for the recover of its economy and for overcoming the crisis. Frederik Reinfeldt noted that Sweden follows the developments in Latvia with great interest and understands the complicated situation, as well as supports the measures undertaken by the Latvian Government in order to stabilise the economic situation.

The Swedish side expressed its commitment, in view of the current situation in Latvia, to get more engaged in the internal discussion in the EU in order to protect Latvia’s position. The Prime Minister of Sweden also offered bilateral technical assistance in relation to the international loan.

When addressing operation of Swedish banks in Latvia and further policy with regard to these financial institutions, Frederik Reinfeldt stressed that it is important to promote actual bilateral cooperation by supporting projects developed at new level of quality. „It is important to fund business activities aimed at providing value-added products rather than to further finance consumption and foster the real estate bubble”, the Swedish Prime Minister said. In order to discuss such projects, Prime Minister Valdis Dombrovskis is accompanied by a working group of the Latvian Employers’ Confederation.

The sides also addressed a number of issues related to the soon-coming Swedish EU Presidency – the EU strategy for the Baltic Sea region, interconnection of the Baltic energy market, Treaty on the Eastern Partnership, Lisbon Treaty, enlargement of the EU and strengthening of ties between the EU and the United States of America.

Valdis Dombrovskis noted that concerning the Baltic Sea region strategy Latvia is particularly interested in increasing the competitiveness of the eastern coast of the Baltic Sea by ensuring balanced development and establishing single operator of the Baltic electricity transmission network. The Prime Minister remarked that funding sources of each project should be considered separately.

Prime Minister Valdis Dombrovskis emphasised that harmonisation of the electricity market is one of Latvia’s priorities by forming a common system of the Baltic electricity operators. It is also important to further develop the interconnection between the Baltic electricity market and the existing EU electricity market. Valdis Dombrovskis noted that the Prime Ministers of the Baltic States have already signed a joint declaration on the formation of the common Baltic energy market

In June the European Council could adopt conclusions on the implementation of the plan of the Baltic energy market interconnection by a reference to the High Level Working Group involved in the development of the above plan; further development of the plan will be a responsibility of the operators. The Swedish side noted that after approval of the plan the High Level Working Group should participate in the development of the action plan of the EU strategy for the Baltic Sea region.

With regard to the implementation of the Eastern Partnership, the Swedish side encouraged to plan practical steps aimed at ensuring actual cooperation among the Partnership’s countries. The priority areas are harmonisation of matters related to market regulation between the countries of the Eastern partnership and the European Union. Prime Minister Valdis Dombrovskis noted that Latvia could offer its expertise and reform experience to the Partnership’s countries. Latvia could also share its experience with regard to environmental policies, environmental and energy reforms. Both sides also emphasised the importance of mobility and secure border control in the framework of the Eastern partnership.

The Swedish Prime Minister mentioned further progress of the Lisbon Treaty as one of the main challenges for Sweden’s EU Presidency. In order to manage this process, Sweden will strictly observe the effective EU procedures.

Both sides also addressed the issue of climate change and respective plans of the Swedish EU Presidency. With regard to discussion on this issue the Latvian Prime Minister urged to envisage an option of voluntary participation of the developing countries in view of their difficulties to undertake new financial obligations.

After the meeting Valdis Dombrovskis expressed his gratitude for intense bilateral cooperation and dialogue in the frameworks of Baltic, EU and other organisations. The Latvian Prime Minister stressed that Latvia is interested in strengthening financial and economic cooperation by raising it at a new level and encouraging Swedish financial institutions to develop their activities in Latvia and to fund business activities producing value-added products.

During the press conference Swedish mass media showed interest in activities of Swedish banks in Latvia. Prime Minister Valdis Dombrovskis emphasised that Latvia closely supervises the methods and approaches used by Swedish banks in order to recover their credits. At the same time Valdis Dombrovskis stressed once again that information about involvement of the police in investigation bank operations is false.

Mass media also asked about the stability of the Latvian national currency. Valdis Dombrovskis emphasised that the recovery process of the Latvian economy is based on the stability of the Latvian lat and any discussions on devaluation are unreasonable.

Prime Minister Valdis Dombrovskis informed that he has initiated a high level working group which will discuss short-term, medium-term and long-term development objectives of Latvia in order to successfully overcome the current economic situation and to fundamentally revise the structure and competitiveness of the national economy. Participants of this working group will include representatives from Sweden – former head of Riksbank, current Advisor to the East Capital investment group Bengt Dennis, Governor of Stockholm County Per Unckel, and Christian H.M. Ketels, Researcher of the Stockholm School of Economics and the Strategy and Competitiveness Institute of Harvard University.