RIGA — In a testament to the hardship many Latvian businesses and families are under due to the economic crisis, the country’s central bank’s statistics on the first quarter of 2010 show 25 percent of all credit repayments are late, many by several months.

More than 50 percent of this unpaid debt is coming from loans for the purchase of consumer goods, many being automobiles and 40 percent is from personal credit/debit cards.

One culprit of the unpaid loans in unemployment. EU data show that unemployment in Latvia was 22.3 percent in March (one month prior to Latvian data), which is flat compared with February’s result. A year ago, in March 2009, unemployment was 14.3 percent, according to EU data. The highest level of joblessness remained in Latgale, at 23.1 percent, while the lowest was in Riga and the surrounding region (13.8 percent).

The Latvian parliament is in the midst of reexamining a bankruptcy reform bill vetoed by President Valdis Zatlers that would make bankruptcies more stream-lined and transparent. Currently, the law of natural persons in case of insolvency does not allow excluding settlement options in cases between creditors and debtors, but the bill allows a specific period after the termination of the solvency for the process of debt relief.

This article is free to view. To read Baltic Reports’ subscription-only articles, click here.