Key developments and challenges

The EU/IMF programme was successfully concluded at the end of 2011. This paves the way for compliance with key Maastricht criteria for public finances, and the government remains committed to euro adoption in 2014.

The authorities have delivered a strong policy performance. As a result, Latvia has regained its investment grade sovereign credit rating and managed to return to international capital markets with substantial issues at manageable yields.

The restructuring of the financial sector has progressed well. This applies particularly with regard to the successor institution to Parex, formerly the second largest bank in the country. The restructuring of Mortgage and Land Bank (MLB) is also under way.