Tuesday 26 September 2017

Stage set for Latvia to roll out the euro in January next year

LATVIA is to adopt the euro, after the EU Commission approved its application to become the 18th country to use the currency. Latvia will roll out the single European currency in January of next year.

LATVIA is to adopt the euro, after the EU Commission approved its application to become the 18th country to use the currency. Latvia will roll out the single European currency in January of next year.

As a full euro member, it will be able to take part in all the key decisions made by the eurogroup of ministers and the board of the ECB. Its currency, the Lat, has already been pegged to the euro for the last eight years.

This means six out of the 12 countries who joined the EU since 2004 will have adopted the euro.

The others are Slovenia in 2007, Cyprus and Malta in 2008, Slovakia in 2009 and Estonia in 2011.

Latvia was one of three non-euro member states (along with Romania and Hungary) to receive an EU-IMF bailout after the 2008 economic crisis, so satisfying the conditions for joining the euro in 2013 is a major achievement.

The "Maastricht criteria" it had to meet included maintaining a rate of inflation that was not more than 1.5pc higher than that of the three best-performing EU countries.

Following painful adjustments Latvia is now forecast to be the fastest-growing economy in the EU this year.

In July, the country will fix the conversion rate between the Latvian currency and the euro.

Later, the governor of Latvia's central bank will become a member of the Governing Council of the ECB, Latvia will become part of the European banking supervisory mechanism and will have to submit its draft budgetary plans for assessment.

Irish Independent

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