OREANDA-NEWS. October 01, 2012. While attending the opening of the United Nations General Assembly on September 26 in New York, Latvian President Andris Berzins met with the President of the Confederation of Switzerland, Eveline Widmer-Schlump. The two presidents exchanged views about economic issues in Europe, as well as various aspects of the bilateral relationship which exists between Latvia and Switzerland.
 
President Berzins called on Swiss investors to seek out investment opportunities in Latvia, as well as to activate economic co-operation between the two countries.
 
The President also informed his Swiss colleague about Latvia’s goal of joining the Organisation for Economic Co-operation and Development, of which Switzerland is already a member. He asked for Switzerland’s support for Latvia’s bid to join the OECD, too. Mr Berzins said that this would make Latvia even more attractive to investors, also making it easier to access lending markets so as to finance projects that are of importance to the Latvian economy.
 
Another link between the two countries is the Swiss Financial Instrument. In June of this year, a five-year financing period in this Latvian-Swiss partnership programme came to an end after financing for 12 projects with a total sum of approximately LVL 33 million, or 100% of the sum that was granted to Latvia.
 
President Widmer-Schlump asked about Latvia’s achievements in overcoming the country’s economic crisis and about its future goals. President Berzins replied that Latvia is maintaining the goal of joining the euro zone and is working on satisfying the criteria that must be fulfilled if the euro is to be introduced on January 1, 2014.

The President said that despite upheaval in the euro zone that has been caused by the debt crisis which exists in several member states, the euro would mean greater security, trust and financial advantage for Latvia, because the euro would ensure lower borrowing costs, not least in terms of Latvia’s servicing of its debt. Mr Berzins added that this is particularly important given that Latvia will have to begin to repay the debt which it accumulated during the crisis in 2014 and 2015.

The total debt is equal to LVL 2.3 billion, and if Latvia is to do this, it will have to refinance the debt or borrow money from the international financial markets. According to the Bank of Latvia, if Latvia manages to reduce its budget deficit and introduce the euro, interest rates on national debt might be at a level of 2-2.5%, while without the euro they would be at a level of 5.5-6%.