Press Release: Commission recommends 2012 for correction of the excessive deficit in Latvia and decides to release second loan instalment

On 2 July, 2009, the European Commission recommended, in the context of the excessive deficit procedure, that the Council sets a deadline of 2012 for Latvia to reduce its budget deficit below 3% of GDP. The deadline is consistent with Latvia's ongoing process of economic and budgetary adjustment and its medium-term euro adoption aim, which is the anchor of its strategy. Separately, the Commission also decided to release the €1.2 billion second instalment of the European Union loan to Latvia to support the adjustment programme. The European Union, including several Member States individually, is providing significant support to the adjustment process through financial assistance of around € 5.3 billion, part of a wider package to which the IMF also pledged around € 1.7 bln. The second instalment of the EU loan will be disbursed within the month of July after the signature of a Supplemental Memorandum of Understanding and after raising the money in the financial markets.