Heard the one about the freezing economy?

RIGA, LATVIA – A viewer who happens to be a banker has texted a joke to me here in freezing Latvia – the former “Baltic Tiger” which has lost its roar.

“What is the capital of Latvia?” the joke goes. The answer? “About two dollars.”

I’m not sure the joke would go down well with the fisherman I met yesterday morning, out on the river ice in the capital, Riga. He had bored a hole with a stick and was dangling a fishing line through it. Beside him, what looked like a perch was flapping its tail up and down in its last gasps of breath.

The fisherman was sacked from a printworks last year, in a country where the unemployment rate could hit 25 per cent. And he was fishing in the shadow of the gleaming tower of Swedbank which dominates Riga’s skyline.

The building stands as a monument to the reckless lending spree, which turned Latvia’s polite former Communists into mad capitalists living on the never never, transforming a once dour city into a shopping mall almost as glitzy as those of Terminal 5 at Heathrow. Until the credit crunch hit and the music stopped.

Watch the video report from Latvia and Hungary

“I fish because there’s no work”, the fisherman, whose name was Sergei, told me. “I don’t want to sit at home, stuck between four walls with nothing to do.”

Earlier I put it to Latvia’s incoming prime minister that he was in charge of a “basket case”, and he barely lifted an eyebrow.

“Certainly the challenges are huge,” he put it diplomatically, claiming the projected 12 per cent shrink in the size of the Latvian economy in 2009 – the biggest collapse in Europe – could be an underestimate.

Valdis Dombrovskis (for that is his name) looks and sounds like a rather dull technocrat – but dull is the “new black” in the world of global finance. Forget “greed is good“; dull is what we need a lot more of. If only the bankers had been more dull, Latvia wouldn’t have been in such a mess in the first place.

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