RIGA - Finance Minister Oskars Spurdzins and EU Commissioner for Economic and Monetary Affairs Joaquin Almunia agreed during their meeting in Brussels last week to set up a working group tasked with preparing the introduction of the euro in Latvia.
Spurdzins said the task force would include representatives of the Finance Ministry and the EU directorate general for economic and financial affairs. The task force will be formed, because besides having to meet the Maastricht criteria, Latvia will also have to complete a large amount of technical work.
The minister said he had discussed Latvia's planned adoption of the euro with Alumnia, adding that, while Latvia is developing successfully, it is still falling short of all Maastricht criteria 's e.g., to maintain a low rate of inflation.
The commissioner also reportedly stated that, in assessing Latvia's readiness for the single currency, the European Commission, the executive arm of the EU, would only take into account the country's compliance with Maastricht, and that the issue of letting Latvia launch the euro would not be political.
Many top Latvian politicians have hinted that Brussels could turn a blind eye to the country's high inflation and allow the country to join the eurozone.
Latvia is planning to introduce the common currency in 2008, though few analysts believe this is possible. Average annual inflation is around 7 percent, and even the most optimistic scenario for 2006 has the consumer price index increasing by at least 5 percent.
Under the Maastricht criteria, a candidate-country's inflation must be no higher than 1.5 percentage points over the average inflation rate in the three members of the euro zone with the lowest inflation, or approximately 2.5 percent.