Is Latvia Having Second Thoughts on the Euro?

While a good part of the so-called “Old Europe” blames the single European currency for being primirily responsible of the financial crisis we live in (you read it right: they blame the Euro much more than their own unsustainable and suicidal budget policies…), there is still someone getting oh-so-excited about becoming a new member of the Euro area.

If one was to rely on papers, in fact, January 1st 2014 should mark the grand debut of Latvia in the Euro-club; a debut many have been longing since the time of EU membership but that nowadays seems not to make everyone exceptionally enthusiastic anymore.

Valdis Dombrovskis: “Latvia Will Join the Euro-zone”

Among the field of the Euro lovers, the most enthusiastic seems to be the Latvian prime minister Valdis Dombrovskis.

“We still plan to join the eurozone in 2014 because since September we meet (almost) all the criteria set for it” – this is what PM Dombrovskis said only last Thursday during his visit to Bucharest for the European People’s Party congress.

During a very interesting interview given to Valentina Pop from EUObserver .com, the Latvian prime minister also discussed some important aspects of the financial crisis blaming in an unusual direct way – especially as this happened during an international meeting as Bucharest one – his colleague from the South of Europe.

“We were badly hit by the crisis” he explained talking about Latvia and adding also how his government “implemented harsh austerity and now we are the fastest growing economy among the 27 members of the EU – last year by 5.5 percent, this year by 5.9.”

“When a country loses control over its budget and the trust of financial markets, there is no other way. You first see what you need to do to restore financial stability, because it is a precondition for economic growth.”

And now? Mr. Dombrovskis has no doubts: “”What we need I think is smart solidarity, not throwing money unconditionally at bad balance sheets of banks or governments” he said.

Gunars Kutris calls is a fraud. “Nobody ever spoke about Euro”

On a complete opposite tune compared to the Latvian Prime Minister we find Mr. Gunar Kutris, the Latvian Constitutional Court Chairman.

According to Mr.Kutris, the only way Latvia could enter the Eurozone would be if the country would call its population to vote for a referendum on the issue as “taking into account all legal aspects, the nation deserves to vote on Euro adoption”.

According to Mr. Kutris Latvian population has never been questioned about joining the Euro and the possibility of switching from the national currency to the European one was never properly discussed while preparing the country to its entrance in the European Union.

Against him, immediately, Mr. Andris Piebalgs – European Development Commissioner – who might well not be the most objective person to talk about EU issues but who also said that “when joining EU, Latvia assumed liabilities on joining the Eurozone. The only thing we did not specify was the when, not the if.”

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2 thoughts on “Is Latvia Having Second Thoughts on the Euro?

  1. Pingback: President Ilves on Latvia and the Euro: "They Should Join" | Estonian Free Press

  2. This article ignores the main issue facing Latvia: the purpose of the government austerity program is to give billions of euros to a Russian offshore bank. Why would any Latvian citizen want to pay extra taxes for this purpose?!?! I recommend watching the Latvian Financial Crisis video on Youtube.

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