By Ralph Atkins in Frankfurt, Joshua Chaffin in Brussels,and Robert Anderson in Stockholm, June 11 2009 03:00

The European Central Bank has acted to head off a financial crisis in the Baltics, providing Sweden’s central bank with a €3bn loan in a confidence-boosting move amid growing fears over Latvia’s economy.

The ECB move signalled the central bank’s willingness to shore up official European help for countries such as Latvia, whose prime minister, Valdis Dombrovskis, voiced optimism that the country would soon receive another tranche of multi-national aid. The ECB’s loan to the Riksbank – a rare instance of aid for a country outside the eurozone – will be used to augment the Swedish central bank’s foreign reserves, increasing its capacity to help Sweden’s private-sector banks, which dominate the Baltic region’s financial sector.

Since the global financial crisis erupted, the ECB has been wary about extending help beyond the borders of the eurozone. Yesterday’s move suggested it was prepared to do that. Jean-Claude Trichet, ECB president, has been careful not to rule out stepping up help to the Baltic region, although such a move could prove controversial within the bank.

The €3bn being lent to the Riksbank is part of a previously undisclosed “swap” agreement, which was struck in December 2007 and allows the Swedish central bank to borrow up to €10bn in exchange for Swedish kronor for up to three months.

Last week, Mr Trichet revealed that it had an agreement allowing the Latvian central bank to obtain liquidity from the ECB, but only against euro-denominated collateral.

The ECB will worry about the financial risks and potential costs involved in stepping up to help for the Baltic countries, as well as the dangers of setting a precedent that might prove awkward in a future crisis in eastern Europe or elsewhere.

The Latvian lat has stabilised this week, boosting sentiment towards other eastern European currencies, after Riga said it had found another 500m lats in budget savings. This has raised hopes the International Monetary Fund will soon approve the next €1.4bn tranche of aid under Latvia’s stabilisation plan.

“This gives us certainty about the next tranche,” said Kristins Strazds, head of trading at SEB bank in Riga. “This should end the devaluation rumours in the short term.” However, Joaquin Almunia, European economic affairs commissioner, stressed in Brussels the need for Latvia to sustain its budget cuts over the long term.

Mr Almunia was speaking after a meeting with Mr Dombrovskis, who expressed confidence that Latvia’s parliament would next week approve the emergency budget cuts. Riga was now turning its attention to medium-term initiatives that would lower the deficit below 3 per cent of gross domestic product, Mr Dombrovskis said.

Earlier, Mr Dombrovskis told the Financial Times that the situation was beginning to stabilise. “It’s important … that people know that we will continue to receive this international loan package.”

http://www.g-20meltdown.org

Come to London’s biggest ever street party!

On Financial Fools Day, The City of London will form the backdrop for the biggest mobilisation of the people since more than a million marched against the illegal invasion and occupation of Iraq. Thousands and tens of thousands
are expected to take to the streets to coincide with the G20 summit of world leaders who are flying into London. The same bastards who got us into this mess are trying to pull the biggest April Fools trick in history – to pretend that the global economic meltdown can be fixed and they are the ones best qualified to do the fixing. To get away with this effrontery, these bankers will do all they can to mask themselves with the charisma of Barack Obama, due to arrive here that morning. We’re not fooled.

We have global economic and environmental meltdown. We have home repossessions and unemployment spiraling out of control. We have unjust wars. And for what? Presidents and premiers are plotting to shore up the tottering capitalist system to ensure business as usual and wealth creation for the few, at the expense of the many. That’s why a lot of angry people, hardworking taxpayers, activists, pensioners, the unemployed, people who’ve lost their homes and savings, small business and shop workers, and all manner of victims of the economic collapse are joining forces in new and powerful coalitions to express their rage. On Financial Fool’s Day, we will take our protest to the belly of the beast: the Bank of England in London’s financial square mile.

April Fools Day is hereby declared a public holiday!

On 1st April at 11 a.m. parades will join up at four railway stations around the edge of the square mile – Liverpool St, London Bridge, Cannon St and Moorgate – and snake their way though the City to converge at the Bank of England for 12 noon.

Each procession will be headed by one of the Four Horsefolk of the Apocalypse, commanding their forces against:
1) Climate chaos (Green horse, Liverpool St); 2) War (Red horse, Moorgate); 3) Job/savings/pensions losses (Silver horse, London Bridge); and 4) Home repossessions (Black horse, Cannon Street).

G20 Meltdown calls for as many people as possible to join us for Banquet at the Bank, bring food, fun and games to share – a very rare delicacy will be served, bankers brains! If you want to Eat the Bankers join the Silver horse in a zombie block!

The Trial of Capitalism, for crimes against the planet – send’em to the gallows, politicians, war criminals and bankers hanging from every lamppost! If you want to press the charges for war crimes join the Red horse!

The Rainforest arrives in the City, Giant anacondas up the pillars, macaws shitting on the statues, polar bears on melting icebergs. Join the Green horse in animal mask or bring greenery for gorilla invasion of the urban jungle!

The World Turns Full Circle, The 360th anniversary of the Diggers, English Revolutionaries for the Earth, a ‘Common Treasury for All’. Join the Black horse with diggers’ spades to celebrate!

Can we overthrow this corrupt and despised government? Yes, we can! Can we live sustainably and avert climate chaos? Yes, we can! Can we defy the database police state and restore our ancient freedoms? Yes, we can! Can we
make capitalism history? Yes, we can!

http://graveyard.at

Economic Meltdown Comic Cover

Jobs with Justice and the Institute for Policy Studies put the Economic Meltdown Explained with solid social democratic solutions.  If only we can could get a radical version from Phoebe Glockner.  Or Alan Moore and Alex Ross. Our two favorite jokes:

“How many stockbrokers does it take to change a lightbulb?

Two. One to remove the lightbulb and drop it –-and the other to sell it before it crashes!”

“What’s the difference between an investment banker and a pigeon?
A pigeon can still make a deposit on a new Ferrari…”