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And then there were 18: Latvia joins the Euro today

There was some surprise about the timing of Latvia’s request to join the Euro, but its government thinks it will help to attract investors.

A man buys souvenirs at a Christmas market in Riga on Friday.
A man buys souvenirs at a Christmas market in Riga on Friday.
Image: AP Photo/Roman Koksarov

LATVIA WILL TODAY become the eighteenth country and the second Baltic state to join the eurozone as it switches to the European Union’s single currency.

There was some surprise at the timing of Latvia’s request to join the euro almost one year ago which came amid turbulent times for the single currency as it fought the debt crisis that almost threatened its very existence.

However Latvia’s government believes that joining the euro will help attract investors to the eastern European country which was hit badly by the recession.

The majority of Latvians agree – but only just. Recent polls show that more than 50 per cent of Latvians are concerned about the country joining the euro, with survey finding that a mere 13 per cent fully supported the change.

However a majority of Latvians support the overall goal of economic and monetary union within the EU.

The biggest concern has been about prices being increased during the changeover, with the government ordering shops to display prices in both currencies until at least June.

The EU said in June that Latvia met all of the necessary criteria – including general budget deficit, debt levels, inflation and interest rates – to join the euro.

Latvia received a bailout of €7.5 billion from the IMF-EU in order to avoid bankrupcty and, like Irland, has had to implement a range of harsh austerity measures in return. Caretaker Prime Minister Valdis Dombrovskis has said that introducing the euro is part of Latvia’s strategy to cope with the economic crisis.

The government did not hold a referendum on the issue, arguing that Latvians agreed to euro membership when they voted to join the EU in 2004.

The last country to join the euro was Estonia at the start of 2011.

imageNewly minted Latvian euro coins on display in Riga at the weekend. (AP Photo/Roman Koksarov)

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