BRUSSELS (Dow Jones)--A proposed 2010 budget unveiled by the Latvian authorities recently will strengthen the country's fiscal position and help restore international confidence, European Commissioner for Economic and Monetary Affairs Joaquin Almunia said Friday.
Latvia's budget, drafted in response to pressure from the European Commission and the International Monetary Fund, calls for steep spending cuts to help control the country's widening budget deficit.
"The action taken by the government is a key step in the direction of strengthening international confidence in the ability of Latvian authorities to deal with the challenges brought by economic crisis, and to implement the measures agreed with international partners within the program," Almunia said in a statement.
Latvia is enduring one of the steepest economic declines in the European Union. Gross domestic product fell 18.4% in the third quarter and 18.7% in the second.
The commission and the IMF will begin next week reviewing how Latvia is implementing the agreed reforms, Almunia said.
-By Matthew Dalton, Dow Jones Newswires; +32 2 741 14 87; matthew.dalton@dowjones.com
Source:wsj.com
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