The adoption of euro in Latvia was a tool that helped the country use the advantages offered Europe’s Single Market to the full extent, says Latvian President Edgars Rinkēvičs, opening the Ten Years of Euro international conference organised by the Bank of Latvia on Friday, the 26th of January.
He said 2024 is a year for celebration and reflection. 20 years ago Latvia became a member of the European Union and NATO. Ten years ago Latvia adopted euro as its currency. The president admits that these were purposeful decisions that were worked on by several generations of politicians, officials, diplomats, contributing to the country’s security and reliability in the eyes of partners and investors.
“Looking back at this time, I would like to say that the entry to Eurozone was a complicated and tense process. Before the adoption of euro, the decision was approved by approximately half of Latvia’s residents. At the very beginning of this path only 30% were on board. In spring 2013 Eurobarometer survey indicated popular support of 43% in Latvia. Now the absolute majority of Latvian residents fully support the country’s membership in Eurozone,” said the president.
Rinkēvičs mentioned discussions were emotional and also rational in the past.
Some associate euro with economic stability, predictability, development and a step closer to tighter integration with the EU. Other people were reluctant to refuse monetary independence and stop using the all too recently recovered national, stable and beautiful currency – the lat.
In 2024 euro is an integral part of Latvia’s economy and our everyday life. Euro adoption promoted Latvia’s competitiveness and contributed to residents’ and businesses’ mobility in the EU. According to Rinkēvičs, it has also strengthened Latvia’s ties with Europe.
In his opening speech, Latvian president thanked everyone who worked hard to ensure euro adoption in the country turned out a success. He also thanked all those who do all they can to maintain euro as a strong and reliable currency. The president wished for euro to continue service for the good of Latvia and Europe.
He also mentioned that for many years there have been many questions about euro’s viability. Fortunately, time and time again euro proved its strength. The president said the story of euro’s ability to adapt is awe-inspiring. In 2014 Latvia became the 18th country to join Eurozone.
“At the time Latvia also became a reliable EU and NATO member state. Consequent decisions promote closer ties with the West, which is also the pillar of our security and defence. We consider it a cornerstone of Ukraine’s fight against aggression as well,” said Rinkēvičs.
He stressed that Latvia adopted euro a mere four years after the global financial crisis. Since then Latvia has accomplished a great deal of progress.
According to the Latvian president, euro has turned out to be a powerful tool that ensures the country’s economic stability and integration in the EU. It also ensures a sense of security and confidence for businesses and residents.
“After adopting euro Latvia had to face several storms. The Covid-19 pandemic created major challenges for businesses and residents alike. The aid provided by the state helped prevent economic decline, or at the very least lower it. After the pandemic our economy was one of the least affected in the EU. It was different that the previous financial crisis, when Latvia’s economy declined the most,” said Rinkēvičs.
The president said the Russian-Ukrainian war has tested Latvia’s resilience. Latvia relied on imports of raw materials and energy from Russia. The war also caused a considerable inflation surge. He also stressed that in a single year’s time the majority of Latvian businesses were able to restructure their supply lines and find new partners. The majority of them are in Europe. Without euro this process would have taken longer to complete.
According to the president, the resilience of Latvia’s economy shows that the country had an easier time than it otherwise would have had without euro. Latvia still has a better credit rating and lower government loan interest rates than countries that are not in Eurozone.
“When Latvia joined Eurozone, then the Council of Europe President Herman Van Rompuy said Eurozone is like a club that opens doors at the entrance, not the exit. Latvia is in this club. We can see there are multiple countries waiting their turn. Bulgaria is one such country. We want to wish them successful euro adoption. Romania and Czechia want to join too, but the process will not be simple. It wasn’t easy for us either. Euro gatekeeper is very serious. It makes sure all economic convergence criteria are completed. When you join, you join the best,” said the Latvian president.
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