Consumer interest groups and business associations also need to be proactive in updating and disseminating information on the availability of financing options such as guarantees, special schemes, and other forms of alternative financing. There are many micro enterprises that still rely on personal loans to finance business operations due to the lack of information and awareness on the existence of such financing options in the market. As a result, these enterprises are required to pay high interest rates to settle personal debts taken, while more cost-effective financing facilities remain underutilised. Business associations should strengthen their role by deepening understanding on the underlying causes before raising issues on access to funding. More often than not, the issues raised by business associations are channeled in the form of general complaints that have yet to be studied thoroughly or specifically. This compounds the difficulty of resolving the issues given 2/4  BIS central bankers' speeches  the lack of supporting details. In addition, business associations can act as an important point of reference in advising members on matters concerning efficiency and competitiveness, the use of technology and the adoption of electronic payments to achieve greater security and cost efficiencies. For consumers, priority should be placed on taking charge of their financial futures and ensuring that the financing options available are utilised responsibly. This can be achieved by conducting due diligence and research on the features of a potential financial product, which will lead to better understanding to facilitate informed decision-making.

But this frontloading approach also proved effective from a political perspective. By acting with speed and determination, the Latvian government was able to capture the sense of urgency prevailing among the population and mobilise it to support adjustment. This way, most of the required painful budgetary decisions could be passed before the so-called “adjustment fatigue” kicked in. The bottom line is this: when adjustment is inevitable, it is better to take the medicine right away than to let the fever rise for months. This is undoubtedly an important factor that explains the different trajectories of the Baltics and certain southern European countries. But fiscal consolidation alone would not have allowed the Baltics to exit the crisis so swiftly. The ECB has long argued that the potential trade-off between fiscal discipline and growth can be mitigated if consolidation is accompanied by growth-enhancing structural reforms. The case of the Baltics confirms this. From a political economy perspective, the Latvian experience also shows that a critical mass of structural reforms is helpful to overcome vested interests. Education, health care, central administration: hardly any public sector category was spared by the reforms. Combined with targeted social safety net measures, this comprehensive approach helped the government to foster public acceptance of change. At the same time, the quality and long-term sustainability of the reforms may – at least initially – have suffered from this approach. Structural reforms are not just about across-theboard cuts but are much more complex and multifaceted.