The Great Debate UK
The debate for or against a Latvian fixed exchange rate rages on. There are good pieces of analyses on both sides of the debate, there are less good ones, there are mediocre ones – and then there is Jonathan Ford’s “Latvia: let the lat go” from 29 July.
The article does not argue why the lat should be devalued –- fair enough, the arguments have been heard before. Neither does it mention all the potential risks of devaluation such as a currency collapse but I can live with that, too. But an 804-word article that contains no less than 10 – 10! – inaccuracies or outright wrong statements is highly objectionable.
For those who have read Mr. Ford’s article allow me to make comments on these 10 points.
- Alf Vanags is director of the Baltic International Centre for Economic Policy Studies. The opinions expressed are his own. -
On April 28, 1925 the then Chancellor of the Exchequer, Winston Churchill, put Britain back on the gold standard at the pre-World War I parity, a move that was strongly criticized by Maynard Keynes in his pamphlet “The Economic Consequences of Mr. Churchill”.
-Morten Hansen is head of the economics department at the Stockholm School of Economics in Riga. The opinions expressed are his own.-
Latvia, with its 18 percent year-on-year economic decline, ruthless budget cuts to meet the demands stated by the IMF-EU bailout package and recurring rumours of devaluation, may be the most written about country in the world right now, at least on a per capita basis.
The Latvian government and central bank are taking extreme measures to maintain a currency board linking the lat with the single European currency, hoping to steer the former Soviet republic into the safe haven of the euro zone in 2012.
LONDON, April 9 (Reuters) – Ireland’s budget is painful, but insufficient.
Brian Lenihan, the finance minister, is taking an additional 3.25 billion euros out of the economy each year, largely in higher taxes. But that will simply trim the budget deficit to 10.75 percent of national income. The 3 percent eurozone target is a distant dream.