The parlous situation in the Baltic States will be weighing on the euro somewhat given the exposure of European banks to the region.
Latvia 5-year credit default swaps have risen over 45 bps today while Lithuania credit default swaps are up over 30 bps.
Earlier today the Latvian State Treasury intervened to support the country’s currency, buying Lats against the euro.
Eu’s Almunia feels Latvia’s new proposals for its 2009 budget are a step in the right direction, but the country needs to do more to contain the increase in the budget deficit.
