Inara Blumberga is at the centre of an unprecedented economic gamble. The librarian from the Latvian beach resort of Jurmula faces a big cut in her salary as the Baltic nation embarks on a risky plan to pull itself out of an economic crisis harsher than any other country in Europe is suffering.

With the backing of the International Monetary Fund and the European Union, Riga is hoping that if it can impose enough pain on the domestic economy, it will be able to maintain its exchange rate peg to the euro. That would allow it entry into the single currency zone within the next four years.