"We have decided to start official talks with the European Commission and the IMF about funding to stabilise the economy," Prime Minister Ivars Godmanis told reporters.
The Baltic country has seen a sharp economic slowdown this year, reports euobserver.com, with a contraction of 4.3 percent in the third quarter, breaking its previous record of being one of the fastest growing economies in the EU.The financial crisis has made it hard for Latvia to obtain funds in its attempts to counterbalance its large current account deficit. The government has been forced to take over the country's second largest bank of Parex and offer millions of euro as guarantees to its creditors.
When Latvia gets its IMF assistance it will be the second European Union country to do so with Hungary getting a $USA15.5 billion credit earlier this month. Now the guessing game is who will be next. Talks are under way between the IMF and the governments of Pakistan and Turkey and the speculation is that the other Baltic States and also Romania and Bulgaria will so0n be in the queue.