RIGA - The government stated this week its position that stability of the lat is one of its most important tasks for the near future, particularly since the EU will be keeping a close eye on macroeconomic indicators in the run-up to eurozone membership in 2008.
Prime Minister Indulis Emsis said last week after meeting a delegation from the European Bank for Reconstruction and Development that securing a stable lat would become a priority once it was pegged to the euro on Jan. 1 next year.
Emsis has been criticized in recent weeks for the government's decision to increase budget spending for the current fiscal year at a time when annual inflation is running at 7.8 percent and has caused Bank of Latvia officials and economists to sound the alarm.
The prime minister said that the government planned to promote production and exports in order to stabilize the currency and reduce the trade deficit. "For exports to increase, all kind of production must be supported," said Emsis, adding that the government could work toward reducing red tape and investing in infrastructure.
During the meeting with the EBRD delegation, Emsis said that Europe's business giants would probably not enter the small Latvian market, but small and medium enterprises should help the growing economy pick up speed. He said that the EBRD could help the process by continuing to invest in infrastructure projects.
The EBRD has invested over 330 million euros in projects in Latvia.