Latvia’s prime minister resigned on Friday as the financial and economic turmoil sweeping central and and eastern Europe claimed its first government leader.
Ivars Godmanis quit as the European Union attempted to boost its political support for new member states in eastern Europe with the announcement of a mini-summit on March 1.
The meeting between José Manuel Barroso, the European Commission president, and east European leaders, which will precede a full EU summit, has been arranged after a week of falls in east European currencies, doubts over the access to international credit of the more vulnerable east European countries and uncertainty on possible financial support from western Europe.
Mr Godmanis’s resignation throws the Baltic state into political turmoil less than two months after his unpopular government launched an International Monetary Fund-backed austerity programme.
His removal, following public unrest, may lead to the formation of a broader coalition with a better chance of pushing through the reforms the €7.5bn ($9.6bn, £6.7bn) IMF-led programme requires.
Meanwhile Serbia said it was seeking a big increase in its $520m (€404m, £360m) IMF standby loan to about $2bn, plus €400m from EU sources.
It would join Latvia, Hungary and Ukraine, which already have full-blown IMF programmes.
Romania said this week it might seek IMF support. Those countries, along with Bulgaria, Lithuania and Estonia, are seen in financial markets as vulnerable. But Slovakia, which has joined the eurozone, Poland and the Czech Republic are seen as stronger.
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