Riga - The chairman of one of Latvia's leading drinks manufacturers said Thursday that a combination of increased duty on alcohol and the Baltic country's bleak economic outlook could drive drinkers to produce their own moonshine in illegal stills.

Vilnius - Lithuania looks set join Baltic neighbours Estonia and Latvia in recession soon, after figures released by the Lithuanian statistics office Tuesday said GDP fell by 1.5 per cent in the last quarter of 2008 compared to growth of 2.9 per cent in the third quarter.

Estimated average growth for the whole of 2008 was 3.2 per cent.

"Today's GDP figures confirmed our expectation that the economic development in Lithuania is lagging behind the other two Baltic countries, which are already in recession," commented Danske Bank analyst Violeta Klyviene.

Riga - The prime ministers of Baltic neighbours Latvia and Lithuania said Monday they would send a joint letter to the European Commission calling on the EU to prioritise the construction of an energy link between the Baltic states and Sweden.

Riga  - During national crises, nations often turn to the things they hold dearest, including their national flag.

That is case in Latvia where, despite major problems such as a collapsing economy, riots in the capital city and a constitutional face-off between parliament and president, part of the Latvian government is turning its attention to whether the national flag is the right colour.

The Baltic state's foreign ministry has noticed that several different shades of red are being used on flags that are commercially available.

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).