Latvia close to eurozone membership, Danske Bank says

Latvia Riga.JPG

Latvia is very close to meeting requirements for adopting the euro in 2014 and becoming the currency union’s 18th member, a senior analyst at Danske Bank said yesterday (17 December). The European Commission told EURACTIV that if Latvia wished to adopt the euro in 2014, it should make an assessment request now.

The Bloomberg news agency quoted Violeta Klyviene, a senior analyst at Danske Bank A/S, saying that Latvia was very close to meeting the requirements for adopting the euro.

Klyviene said the country’s inflation, debt and budget deficit already met membership criteria, leaving only requirements on long-term interest rates that are “more a formality than a real obstacle”.

Simon O’Connor, the spokesperson for EU Economic and Monetary Affairs Commissioner Olli Rehn, told EURACTIV that the most recent assessment of Latvia's progress towards eurozone membership is set out in the last convergence report, published at the end of May 2012.

The report, he said, concluded that none of the eight countries surveyed – Bulgaria, the Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden – fulfils all conditions for adopting the euro. Latvia did not fulfil the criterion on price stability and the criterion on public finances, the spokesperson said.

Although there is no obligation to publish another report in 2013 (these reports are in principle published every two years), Latvia can request that the Commission to undertake an extraordinary assessment outside of the two-year cycle, if it feels it meets the convergence criteria, O’Connor said. He added that Latvia would need to make such a request if it wished to adopt the euro in 2014.

Of the 10 countries that joined the EU in 2004, Slovenia was the first to adopt the euro in 2007, followed by Cyprus and Malta in 2008, Slovakia in 2009 and Estonia in 2011.

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