Latvian Finance Minister: A Journey Has Been Completed

Photo: Postimees/Scanpix
7/9/2013 1:32 PM
Category: Economy

Eurozone finance ministers have given the final go-ahead for Latvia's changover to the euro next January.

In an e-mail interview with uudised.err.ee, Latvian Finance Minister Andris Vilks said the country's membership in the Eurozone will complete a journey started in 1991.

"During this time there were ups and downs that allowed us to learn many good lessons and clearly recognize the importance of solid fiscal and structural fundamentals and relentless reforms for achieving and preserving the sustainability of economic convergence," Vilks said.

He said the introduction of the euro will not cause any dramatic changes in macroeconomic indicators, as were seen in accession to the EU in 2004.

"Absolute disappearance of currency risk (in relation to the lats) is one of immediate benefits after the introduction of the euro. Probably it is not topical for an ordinary inhabitant, but this benefit will create a tangible positive influence on the economy of Latvia also in the course of time," Vilks said.

"We are confident and enthusiastic about the future of the Eurozone."

Latvia will become the 18th country to adopt the euro, following on the heels of Estonia in 2011. Lithuania is aiming for 2015.

In April, Latvia's inflation was 1.3 percent - well below the 2.7 percent required by the Maastricht criteria as a prerequisite for joining the euro. The country's public sector deficit was 1.2 percent of GDP last year and is expected to be around the same this year. Public debt was at 40.7 percent of GDP at the end of last year. In April, the annual average long-term interest was at 3.8 percent - also below the 5.5 percent requirement.

Latvian Prime Minister Valdis Dombrovskis's push for joining the euro has come at the price of low popularity. In June, most of the country's population was against joining the euro, according to polls.


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