26 February 2013

EP: Latvia set to join the euro - "We want to participate and solve the problems together"

Latvia is coming out of the crisis as one of the EU's fastest growing economies and it wants to use it experience to help find solutions for the whole eurozone once it joins in January 2014. (Includes remarks from MEPs Gauzès and Kariņš, EPP Group.)

Finance minister Andris Vilks and central bank governor Ilmārs Rimšēvičs explained to the EP's economic committee on 26 February why their country was so keen to join the euro. "We do not want to wait for the euro crisis to pass", said Mr Vilks. "We want to participate and solve the problems together."

The country embarked on structural reforms after it experienced one of the sharpest downturns in economic output among European countries in 2008 and 2009. Mr Vilks said continuing the reforms was key to his country's success. "It is important to combine fiscal prudence with growth-friendly reforms. In Latvia, we are doing this", he said.

Mr Rimšēvičs pointed out that Latvia has met all the criteria for euro accession since September 2012. The central bank governor said there was power in numbers: "In 2008-09 Latvia was punished as it stood alone to speculative attacks (on the currency). If we were on a bigger ship, the storm would have passed more easily."

MEPs praised the country for its growth-orientated reforms. Some expressed concerns about the lukewarm public support for the euro but the two Latvian officials argued that more communication and positive news from the eurozone would ensure that public opinion is in favour of the move by the end of the year.

Press release

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Jean-Paul Gauzès MEP, EPP Group Coordinator in the committee, pointed out that Latvia's entry to the eurozone is very good news: "It is a message of hope and trust for this country that has made remarkable efforts to master the crisis, to relaunch growth and fight unemployment, thanks to the citizens that have shown courage and to the clear-sighted reforms led by Valdis Dombrovskis' government".

"Latvia did not 'waste' the financial crisis. Instead, it used the opportunity to implement fundamental reforms in its economy, which are now bearing the fruit of sound economic growth. One of the side effects of reforms is a stable and sustainable macro-economic environment which provides the opportunity to join the eurozone", added Latvian MEP Krišjānis Kariņš.

"Latvia is a perfect example which illustrates how sound state finances lead to stable economic growth. It can be observed that the population is slowly realising that if Latvia wants to become a welfare state, it has to follow the same route to prosperity as the rest of Europe - join the single currency. Adopting the euro is not a goal, it is a means to achieving sustainable economic growth in the long term", he concluded.

EPP press release

 

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