All the attention of the financial world has been focused on Greece. This is captured in one alarming statement made by the head of the German debt management agency.
"I think if one of the 16 members would default, it would be a collapse of the whole system," German Finance Agency managing director Carl Heinz Daube told a bond conference in London.
"If a country goes bankrupt, it will be the end (of the euro zone)," he told a panel discussion at a bond conference in London.
You would think that Greece is suffering from an epic economic collapse. In fact their economy has shrunk less than 3%.
Everyone seems to have forgotten about Latvia, despite the fact that its suffering is far worse. The economy has shrunk 24% since the start of the global crisis - a number that rivals America's experience during the Great Depression.
Even that number doesn't fully describe the suffering.
A full 26 percent of the population now lives in poverty, including 51 percent of senior citizens, according to the latest figures from Eurostat. Latvia's unemployment rate is the highest in the European Union....
The government increased taxes and fees, fired public sector employees, and reduced the wages of those remaining by 20 percent. It closed or merged more than 100 schools and cut teachers' salaries by a third. Now, it is shuttering hospitals. Public transportation ticket prices are up. Meanwhile, even those earning close to nothing must pay taxes. If you earn just $50 a month, you still pay $12 in taxes.
The rating agencies are saying that Latvia's economy has bottomed out. Yet the conditions of the people of Latvia are expected to get worse.
Joblessness will likely grow. Wages are still decreasing, as is household consumption....
Moreover, Riga is still facing a budget crisis. "For the budget for next year, we need [to cut] more than 400 million lats [$770 million]. I don't see any substantial position where we can cut this entire amount. It indicates that we will see some further tax increases, probably," Dainis Gaspuitis, an economist at Sweden-based bank SEB's Latvian subsidiary, said in an interview. "Some public employees will see further wage cuts. I don't know how much. There will be further staff cuts in the public sector."
One has to wonder how long the people of Latvia can continue like this without rioting.