Ex-European parliament member says Latvia will face 'Perfect Storm' in economy in 2021

Latvia may expect the last year of stability before the 'perfect storm" that will lead to catastrophic consequences in the economy, Miroslavs Mitrofanovs, a former member of the European Parliament, told Sputnik.

In 2004, Latvia became a member of the European Union and has since remained one of the poorest countries within the bloc.

"In material terms, 2020 may be the last stable year. We discussed a couple of months ago the approach of the "perfect storm" in 2021 - the coincidence of several negative phenomena that reinforce each other and lead to catastrophic consequences. As for Latvia, [it will lead to] the budget crisis and the need for new significant loans," Mitrofanovs said on Tuesday.

According to the former EU official, these negative factors include the decrease in financial aid provided by the EU, the impact of Brexit that will not be postponed after the Conservatives' victory in the recent elections in the UK and the transfer of two major ports, the Ventspils port and the port of Riga, under the direct control of the Latvian government after the US introduced sanctions against a Latvian oligarch, Aivars Lembergs, who was the mayor of Ventspils.

On December 9, the US Department of the Treasury imposed sanctions on 17 individuals and 29 companies from Serbia, Latvia, Cambodia and Venezuela under the Magnitsky Act, among them Lembergs. The Latvian politician then announced stepping down as the board member of the Ventspils free port. Next day, Latvian Prime Minister Arturs Krisjanis Karins announced that control over the ports of Riga and Ventspils would be taken over by the government in order to keep them functioning amid the US sanctions.