RIGA - Finance Minister Oskars Spurdzins said that, despite the jump in prices since the start of the year, Latvia would be able to rein in inflation in order to meet the Maastricht criteria and adopt the euro.
"We are working to stop and reduce inflation. We all have to work together on this, because if we let the public consumption loose, this will have an avalanche-like effect," Spurdzins told the Baltic News Service.
He explained there were objective factors that led to the steep price-rise this year – irrational EU membership fears, growing electricity and fuel prices.
Right after Latvia's accession to the EU, the Baltic state saw a record-high inflation of 6.2 percent in May. In June it came down a notch to 6.1 percent.
What's more, next year the consumer price index was likely to be influenced by an 18 percent value-added-tax levied on heat supplies, the minister said.
"Anyway, next year or the year after the next we should look as good as possible in order to join the [euro] system. Otherwise it will be bad for us. We should not give up on the idea, just shrugging helplessly," said Spurdzins.
He said the Bank of Latvia plan for the country's accession to the euro zone, slightly delayed compared to Estonia and Lithuania, was reasonable, and that Latvia should not rush with the switch.
Latvia plans to peg the lat to the euro in 2005 and to replace it with the euro in 2008.