The European Commission loaned Latvia almost 700 million dollars today, releasing the third tranche of its contribution to the international bail-out that was agreed for the Baltic country in December 2008, according to dpa. As its economy collapsed in the wake of the international financial crisis, and after years of double-digit growth that led to spectacular overheating of its economy, Latvia obtained a 7.5-billion-euro (10 billion dollars) loan package. The EU, the International Monetary Fund (IMF) and other international financial institutions such as the World Bank were the main contributors. The commission - the EU's executive - said it decided to give the country 500 million euro after it signed a memorandum with EU and IMF officials on February 22, pledging to implement fresh budget cuts and structural reforms. "I am glad Latvia has complied with the policy conditions for the third EU disbursement," the bloc's economy commissioner Olli Rehn said in a statement. Among other commitments, Riga's government has pledged to cut its budget deficit from over 8 per cent of gross domestic product (GDP) in 2009 to less than 3 per cent in 2012, bringing it into line with EU budgetary guidelines. According to the latest figures published by Eurostat, the EU's statistical office, the Latvian economy contracted 17.9 per cent year-on-year in the last quarter of 2009.
