Sunday

21st Apr 2019

Latvia aiming to join eurozone in 2014

After being one of the first EU countries in need of a bail-out in 2008, Latvia is slowly recovering and aiming to join the eurozone on 1 January 2014, despite current problems in the single currency area, the country's newly elected president told this website.

"Personally I'm very optimistic we'll join the euro on 1 January 2014. It's our goal and we are working hard to implement this process", Andris Berzins said while on his first courtesy visit to Brussels earlier this week.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

He added that the accession of his country to the single currency area would be "of course dependent of the eurozone stability, which I hope will come by the end of the year".

The remarkable turn of Latvia's economy, now having a growth rate of five percent after an 18 percent contraction in 2009, is mainly due to a harsh austerity program accompanying a €7.5 billion EU-IMF bail-out agreed in December 2008.

Unemployment, however, was the price to pay, with Latvia having 16.2 percent in the first quarter of 2011, the second-highest rate in the EU after Spain. But EU statistics also show that unemployment is decreasing rapidly compared to last year, when the rate was almost 20 percent.

Berzins, a member of the Union of Greens and Farmers party, says that people living in the countryside are the most affected and that is why his message to the EU is not to cut back on farm subsidies in the next seven-year budget.

"For Latvia the Common Agricultural Policy (CAP) is very important. Particularly the direct payments per hectare, to keep employment in the rural areas", he said.

A country of 2.2 million people, Latvia still relies heavily on agriculture, with almost 50 percent of the population residing in rural areas. "And our countryside regions are the most affected by the budget consolidation process. We still have the situation that people are leaving Latvia to find better place, we have to stop that and bring them back", the president said.

As for the situation in Greece, Berzins, a former privatisation manager, said that "it would be more than useful to get answers how it happened, why they were able to go so deep and not stopped earlier. It means the European Central Bank didn't act in the best way, allowing such a high debt for Greece".

In his view, creating more control mechanisms in the eurozone is necessary to prevent another Greek scenario from happening again.

"Eurozone leaders have announced they will be very strict in this consolidation process, but it's not the easiest and it takes time step by step in reducing this big debt burden. Latvia managed in relatively short time, but the situation is still complicated and we have to find ways for future growth in our country", he noted.

As for neighbouring Estonia, who became a member of the eurozone at the beginning of this year, Berzins said that it is "too early" to say if that move had a positive impact on trade relations with Latvia.

"I hope this is a very positive example for all three Baltic states and that is an explanation why we are ready to follow. We were together, we are together and we remain the closest economic partners", he stressed.

Recently-elected Latvian President Andris Berzins spoke to the EUobserver during his first visit to Brussels.
Latvian turmoil will not affect government, MEPs say

The Latvian government will not be affected by the decision of the country's president to dissolve the parliament for having refused to allow a corruption probe into the dealings of one of its members, two MEPs told this website.

Greece wants EU to use old Latvia fund for bail-out

Greek leader George Papandreou and Socialist parties across Europe have called on the EU to re-deploy for Greece an existing European bail-out fund originally established to rescue Latvia, Hungary and Romania.

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Counter BalanceSign the petition to help reform the EU’s Bank
  2. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  3. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  4. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  5. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  6. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  7. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  8. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  9. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  10. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  11. Nordic Council of MinistersNordic commitment to driving global gender equality
  12. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan

Latest News

  1. Romania drafts EU code on NGO migrant rescues
  2. Bulgaria, Hungary, and Malta shamed on press unfreedom
  3. EU drafts $20bn US sanctions list in aviation dispute
  4. Brunei defends stoning to death of gay men in EU letter
  5. US Democrats side with Ireland on Brexit
  6. Wifi or 5G to connect EU cars? MEPs weigh in
  7. How Brexit may harm the new EU parliament
  8. EU parliament backs whistleblower law

Join EUobserver

Support quality EU news

Join us