Latvian policymakers on March 13 said a billion-euro fund was being made available to assist businesses through the COVID-19 coronavirus crisis.
The billion-euro figure is the amount that could potentially be used as “financial instruments” for businesses via the state-owned ALTUM development bank.
Prime Minister Krišjānis Kariņš, flanked by Finance Minister Janis Reirs and central bank governor Martiņš Kazāks, stressed that the money would not take the form of grants but of “financial instruments”.
Reirs said that at the start of the coronavirus crisis Latvia finds itself in a good financial position, contrasting it with the situation at the start of the financial crisis a decade ago.
“In the post crisis period we followed a prudent fiscal policy… This is not a structural problem or structural crisis in the country – this situation is completely different,” Reirs stressed.
The financial instruments would take various forms, from tax holidays to paying for sick leave and import and export guarantees, Reirs said, adding that discussions were already under way with the European Union on other business support measures.
Kazaks said “Support from the financial sector will also be possible,” and all three stressed that Latvia would continue to observe EU and ECB rules on deficits and the forms of support that a state can offer with in the European Union, though there would be inevitable costs to the state budget.