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Latvia: Picking Up the Pieces After an Economic Meltdown -Part 1

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Until recently, Latvia has not seen any anti-government protests and riots since the end of the Soviet Union in 1991. After entering the E.U. in 2004, Latvia posted Europe’s highest growth figures, fueled by access to cheap credit and domestic consumption enabled by a spike in private debt.

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Fueled by unprecedented access to cheap credit, most Latvians took out 30-year loans on their apartments. Fifteen percent of Latvians are now late on their loan payments. The price of a two-bedroom apartment in the district of Kengarags dropped by 50% in the last six months.

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As unemployment reaches 12 percent, Kristine Brinka, the daughter of a local apple farmer, says more Latvians now shop at the Farmer’s Market where she works instead of the more expensive foreign-owned food stores.

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As workers in the private and public sectors experience deep pay cuts, Inese Kinute says that more people shop at her meat section, but they buy cheaper products.

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Most Latvians are ashamed of their political leadership, but are extremely proud of their national hockey team.

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Thousands of Russian-speaking Latvians come out on May 9th every year to celebrate the defeat of the German army by the Soviet Union in 1945. This year drew high numbers, and many Russians expressed fears of being laid off first -- before Latvians -- during an economic crisis.

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Many Latvians view May 9th as the beginning the Soviet occupation in Latvia and oppose these celebrations. A small group of Russian high school students held “anti-Fascist” flags calling Latvians “Nazis.”

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World War II Veteran Nikolai Konstantinov describes his 17 medals. He doesn’t experience ethnic tensions in his daily life, but hears about it every day in the media.

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Local band, Monkey Rocks used to draw over 100 people to the Depo club before the recession. Only 20 fans came out to their recent show in May.

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Valdis Novikovs, 33, used to run a local restaurant before it closed. Now, he and his friend, a former bank worker, sell the remaining assets of bankrupt restaurants and stores.

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Dzintra Vorfolomejeva, 62, has been homeless since 2004 and squatting near her old apartment. Since the recession, she has to spend more time looking for food in garbage containers.

Until recently, Latvia has not seen any anti-government protests and riots since the end of the Soviet Union in 1991. After entering the E.U. in 2004, Latvia posted Europe's highest growth figures, fueled by access to cheap credit and domestic consumption enabled by a spike in private debt.

This year, the Latvian economy took one of the sharpest downturns in the world. The government responded by making deep cuts to public spending, which most Latvians oppose. On January 16, over 10,000 Latvians took to the streets, participating in protests and violent riots that forced the resignation of the governing center-right coalition. As the new governing coalition continues the same agenda, working-class Latvians, farmers and students are expressing outrage through mass protests.

In the meantime, unemployment is close to 12 percent, hospitals and schools are closing and most private and public sector workers are experiencing deep pay cuts. Crime is on the rise, and many women can now name a female friend, who was recently robbed while walking on the streets. To them, some days feel just like 1991 -- the year when Communism collapsed.

Written by: Kristina Rizga / Photography by: Akim Aginsky