Confidence in the Latvian economy has taken another hit with the decision by financial services company Standard & Poor’s to cut its rating of the country’s willingness and ability to pay debts.

The company’s London-based ratings service on Oct. 27 also lowered its evaluation of Lithuania but left Estonia’s unchanged, adding that the outlook for all three Baltic countries is negative.

The action by Standard & Poor’s follows similar recent decisions by Fitch Ratings and Moody’s Investors Service.

“Our decision to lower the ratings reflects the increased risks that the Latvian government will have to support domestically owned banks under a worsening credit environment,” Eileen Zhang, a Standard & Poor’s credit analyst, said in a press release. “The uncertainty surrounding these banks’ liquidity needs, refinancing capacity, and worsening credit quality increases the external vulnerabilities of the Latvian economy.”

The ratings service dropped its assessment of Latvia’s long- and short-term foreign and local currency ratings to “BBB/A-3” from “BBB+/A-2.”

Latvia’s government has been struggling with a tightening economy, which has put pressure on the national budget. The Cabinet of Ministers on Oct. 7 signed off on a proposed 2009 budget that foresees nearly LVL 5.8 billion in spending, but revenues of only LVL 5.4 billion. The budget has yet to be approved by the Saeima.

Standard & Poor’s warned that things could get worse if the Latvian government were to take on debt to support one or more banks, if the exchange rate of the lat slips or if the economy contracts faster than expected.

On the other hand, the ratings service said, if demand for Latvian exports were to increase—thereby reducing trade imbalances and taking pressure off banks—Standard & Poor’s could revise its outlook upward.

Standard & Poor’s also cut the City of Rīga’s rating to negative from stable.

Holders of Latvian passports will now find it easier to visit Australia, thanks to the expansion of the visa-free eVisitor program, the Australian Department of Immigration and Citizenship announced Oct. 27.

Under the program, Latvian citizens no longer need a visa, but must register with Australia’s eVisitor program, an online process the Australian government says should take just minutes.

Latvia is one of 11 Eastern European countries whose citizens previously needed visas to visit Australia, but all have been added to the expanded eVisitor program that now includes 35 European nations.

With the eVisitor authorization, Latvian citizens will be able to travel to Australia for tourism or business purposes and stay up to three months at a time. The eVisitor authorization allows multiple visits during a 12-month period. The eVisitor authorization also allows visitors to study in Australia for up to three months.

There is no charge for an eVisitor application, but applicants must be in good health and not have had a criminal conviction with a sentence of 12 months or more. Applications should be made at least two weeks before the proposed date of travel, according to the Department of Immigration and Citizenship.

Further information about the eVisitor program is available by visiting www.immi.gov.au.

The Australian decision follows the announcement earlier this month that Latvia is to join the U.S. Visa Waiver Program.

The mayor of the western Latvian city of Saldus is among nearly 100 people from 76 countries who are observing the U.S. presidential election process firsthand through a program sponsored by the State Department.

Didzis Konuševskis, who also is a board member in the recently formed Civic Union Party (Pilsoniskā savienība), will spend time in Washington, D.C., getting an orientation in the American election process before heading to Minnesota to take a closer look, according to a State Department spokesperson.

He is among fellows chosen to participate in I-VOTE 2008 (International Visitors Observe the Elections). The program runs Oct. 26-Nov. 8 and includes visits to one of five battleground or swing states in this year’s election: Colorado, Florida, Minnesota, Missouri or Ohio.

Konuševskis was invited to participate in the program by the U.S. Embassy in Rīga. The I-VOTE program is aimed at emerging leaders ages 30-50.

After observing the Nov. 4 election, the I-VOTE fellows will meet in Boston for a symposium at Harvard University’s John F. Kennedy School of Government.