Riga - Latvian President Valdis Zatlers refused to bow to calls that he should launch the process of dissolving the unpopular national parliament Wednesday, instead offering a compromise plan to both government and opposition parties in the troubled Baltic state.

Zatlers has been caught in a constitutional pincer since January 14 when, in the wake of riots in the capital Riga, he gave the coalition government of Ivars Godmanis until March 31 to become more responsive to the people or face the prospect of dissolution.

Riga  - The Latvian government breathed a collective sigh of relief Tuesday when European Union finance ministers meeting in Brussels approved payment of the EU's 3.1-billion-euro (4-billion- dollar) slice of a 7.5-billion-euro (9.7-billion-dollar) economic assistance package brokered by the International Monetary Fund (IMF).

Riga- The medium-term prospects for the economies of Latvia, Lithuania and Estonia are the worst in the European Union, according to a European Commission report released Monday.

Formerly known as the "Baltic Tigers" for their dynamic rates of GDP growth and ability to attract investment, all three countries are now little more than mewling pussycats if the downbeat EC economic survey is to be believed.

Latvia looks in the worst shape of the 27 EU member states with GDP set to contract 6.9 per cent in 2009 and a further 2.4 per cent in 2010.

Riga - Latvian central bank governor Ilmars Rimsevics said Thursday the riots that erupted in the capital Riga earlier in the week could have serious economic consequences for the Baltic nation unless care was taken.

"At the moment the country needs a government that can deliver on the commitments for solving the crisis that Latvia has made to the European Commission and the International Monetary Fund (IMF).

Riga- Workers were busy replacing paving stones into the cobbled streets of Riga's Old Town Wednesday morning hours after they were used to smash the windows of the Latvian parliament building.

A political demonstration Tuesday night degenerated into the worst civil unrest the Baltic state has seen for years.

Speaking on Latvian television Wednesday morning, Prime Minister Ivars Godmanis warned that the 106 people arrested "will not go unpunished," and defended police tactics in bringing the riot under control.

Riga - Workers were busy replacing paving stones into the cobbled streets of Riga's Old Town Wednesday morning hours after they were used to smash the windows of the Latvian parliament building.

A political demonstration Tuesday night degenerated into the worst civil unrest the Baltic state has seen for years.

Speaking on Latvian television Wednesday morning, Prime Minister Ivars Godmanis warned that the 106 people arrested "will not go unpunished," and defended police tactics in bringing the riot under control.

Next time, Godmanis warned, the police response would be even tougher.

He also said political protests might be banned from the Old Town in future.