Draghi praises Latvia’s spending restraint and competitive wages

Tim Wallace
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PUSHING down wages and keeping pressure on government spending have helped keep Latvia’s economy competitive, European Central Bank boss Mario Draghi said yesterday.

He welcomed Latvia into the Eurozone ahead of its conversion to the currency next year. And the central banker said the country is a model for others looking to devalue internally in the face of a tough economic environment.

“I know the authorities here are aware of the key challenges of maintaining convergence,” he said in Riga. “This implies the authorities need to continue with sound fiscal policies, and to ensure that labour cost developments remain conducive to competitiveness.”