Bailing Out Latvia [Economix]
Though the dust-up is over fiscal policy, the elephant in the room is whether Latvia can maintain its peg to the euro, a[n IMF-driven] stance that helped create the terrible imbalances that are now the source of so much woe. Essentially, the peg allowed Latvians to consume at outrageous levels, creating a current account deficit that the country is now trying to close by successive rounds of brutal wage and budget cuts.
