Swedish banks and Latvia´s crisis

Latvia is in the headlines around the world, after the violence yesterday night. There are of course a number of reasons for the protests (10 ooo peaceful demonstrators before a few hundreds started attacking the parliament).

In a short note on Aftonbladet´s Europablogg, I adress one factor. The irresponsible way Swedish banks has acted the last years, lending money in Latvia without any reasonable caution.631414_skyscraper_-_solar_stone_riga_city_3

When the financial crisis hit, the Swedish government was eager to minimize the losses of the banks. Anders Borg´s Ministry of Finance did what it could to convince Latvia not to devaluate its currency. Instead, Sweden and the IMF pressed Latvia to implement drastic reductions in teacher´s and nurses´salaries.

General mistrust of the present government and corruption charges are other factors behind the protests. But the Swedish government should take its responsibility for this crisis very seriously indeed.

Other blogs on this issue: From Latvia with love, The Congress BlogAll about Latvia, Lettland, Veiko Spolitis

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5 Responses to Swedish banks and Latvia´s crisis

  1. Mark T. Market says:

    I recently featured Taleb speaking out in frustration against the economic and banking establishment, also joined by his mentor: Benoit Mandelbrot. Their statements about rapid crashes has striking correspondence with Jared Diamond’s observations about societal collapse.

  2. […] wrote about Latvia and the Swedish banks in one of my first posts here. Since then, there has been a lot of discussion on the IMF program for Latvia and the social […]

  3. […] earlier posts on Latvia are here, here, here, here, and […]

  4. Arita says:

    Not only teachers and nurses’ salaries were cut. I am a lecturer at Riga Technical University and my monthly salary is 5 Ls (about $ 10). It used to be 180 Ls. I teach at faculty of computer sciece and my collegues also receive 5-10 Ls. The administration has forced us to sign agreements with 0,03 of work-load, so if full time salary is 500 Ls, then 0,03 load is just a few dollars. And I was asked to take an unpaid holiday for 4 months. In other words, we have been working for free for 2 years now.

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