Latvian PM confirms government has decided to cut spending by 500 mln lats

The Latvian Prime Minister Valdis Dombrovskis has come out and confirmed that Latvia’s government has agreed to cut 500 million lats from its 2009 budget by paring back social spending and other measures.

Dombrovskis said he sees a “good chance” of getting further loans from the IMF and European Union as a result of the cuts, aimed at getting Latvia’s budget deficit down to 3% of GDP.

The news has given the euro a decent boost, EUR/USD presently back up at 1.3930.