Lost In The Latvian Translation?

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According to reports in the Baltic Course newspaper, Latvian Finance Minister Einars Repse (of the New Era party) is not against the strikes and rallies that are being organised in response to the proposed state budget cuts, he is, however, opposed to any violent protests and subsequent civil unrest.

Rallies and strikes are a good thing, but disturbances will not solve anything,” Repse pointed out after a meeting with Latvian Free Trade Unions Association representatives today. As the finance minister explains, he realizes that “people are really concerned and desperate”, however, damaging government buildings will not contribute to improving the situation in any way as repairing the buildings would have to be paid for with state budget money anyway.

I’m sure he can’t have quite put it like this – if he did then a Finance Minister actually supporting strikes against his own measures would be a first, I think (what is happening in Latvia is surreal, but not this surreal, surely) – and that the question is a translation one, but still. It does illustrate the difficult position local politicians are being put in when it comes to defending the EU Commission and IMF inspired measures in the face of their own voters – as I already forecast it would be in my post The Long And Difficult Road To Wage Cuts As An Alternative To Devaluation back in January. More to the point is this, which is real enough:

Working pensioners’ pensions will be slashed 70%, all other pensioners will see their pensions shrink by 10%. Also maternity and child care benefits will be cut by 10%.

Now, I know the aim is to bring prices down, but how can a country which is effectively dying for lack of children (post coming on this later) be actually cutting child allowances. Frankly I find this even harder to believe than the idea of a Finance Minister supporting strikes against his own policies. It is nevertheless true. Everything, I see, is possibile in Latvia, except, of course, devaluation.

This entry was posted in A Fistful Of Euros, Economics and demography by Edward Hugh. Bookmark the permalink.

About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

6 thoughts on “Lost In The Latvian Translation?”

  1. Pingback: The currency of Latvian pain « Democracy and Social Europe

  2. Since there is no solution to the contagion problem, the only way is to follow the sadistic reforms.

    At the present stance reforms maybe sound terrible but are in reality not so painful. Working pensioners are a typical heritage from Soviet era. No Western European country allows the pensioners to work after reaching the pension age. In Germany workers in public sector are fired automatically when reaching 65. Working pensioners in Latvia have even sickness benefit insurance, therefore social guaranties considerably exceed Soviet time ones.

    The tricky issue is, however, how to manage the next decrease in January 2010, and the next in January 2011, reducing the budget in 2011 compared with 2008 for 40%. The exit strategy of EUR adoption will be missed because Latvia will loss every amount of its viability and sustainability.

  3. You may think the Latvian cuts to child support is surreal, but Hungary’s Bajnai government is attempting to do the same thing. They are currently being blocked by the President.

  4. In the Middle East, rulers pressed by the IMF used to cut bread subsidies. My suspicion is that, at least to some degree, rulers knew that the result would be riots that would demonstrate to the IMF the limits of policy change, and present the real threat of a popular revolution. I don’t know if this was the Latvian minister idea, but certainly some unrest could help the government in its negotiations with external bodies.

    Thanks for this great blog.

  5. Pingback: The currency of Latvian pain | Democracy and Social Europe

  6. Pingback: The currency of Latvian pain | European Alternatives

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