'Baltic sisters' struggle to survive Global recession

Three Baltic sisters - Lithuania, Latvia and Estonia is struggling to survive Global recession.

Dalia Grybauskaite, Lithuania's new president, has admitted the country could be forced to seek help from IMF (International Monetary Fund). The finance ministry was considering 'one more shot" at raising money this year after a €500m bond issue in June.

On Thursday Grybauskaite signed a law which will reduce public sector pay by an average of 5 per cent - the second such cut this year.

Latvia has already received €7.5bn emergency loan from the IMF and European Union in December. But all three Baltic countries are in deep recesion after their over-heated economies fell victim of the Global credit crunch. Each of three countries are avoiding currency devaluation which would close their chances about getting euro.

According to speculation in financial markets all three countries will be forced to devalue to make their economies more competetive. However, Grybauskaite, a former finance minister and EU budget commisioner, ruled out such a move.