RIGA - Latvia's top bankers strengthened calls for embracing the euro as a long-term goal 's a strategy that will help stabilize the economy now undergoing a bitter battle against inflation.
Bank of Latvia President Ilmars Rimsevics said adopting the common currency must be the country's strategic task since a switch from the lat to the euro will bring far more advantages than disadvantages.
Once in the eurozone, prices will become transparent, competition will be boosted and financial markets will expand. The need to maintain accounts in several currencies will no longer be necessary.
"Without the euro we are European periphery, and our investors and potential cooperation partners will view us as such," Rimsevics told a conference.
He expressed hope that Latvia will be able to join the euro zone in 2012-13.
The head of Ekonomistu Savieniba 2010 (Economists Union 2010) pointed out that introducing the euro had been among the state's primary tasks and the first not to be fulfilled.
If Latvia admits that joining the euro zone is a strategic task of the state, it has to know what exactly the stages of the strategy are, Rimsevics said.
Andris Berzins, head of Latvia's Chamber of Commerce and Industry, said that the state should determine its further strategy, as businesses have lots of uncertainties at present.
Latvia had initially planned to introduce the euro in 2008, though this fell by the wayside due to high inflation. The Baltic state now has the highest inflation in Europe at 16.7 percent.
Teodors Tverijons, head of the Latvian Commercial Banks Association, said that banks were not interested in delaying the euro's entry to Latvia.
He said that bank revenues from currency transactions at present amount to 7 percent of total income, so income on foreign exchange is not as essential to banks and therefore not a reason for them to oppose euro introduction.
Tverijons added that banks support introduction of euros, as a wider outlook on the issue is more important. The euro will bring more benefit to bank clients and the economy on the whole, he said.
He stressed that the situation for switching to the euro is becoming more timely as the rate of price growth is falling and wage growth will also slow.
Tverijons said that it is important to work now not to fall back on the other Maastricht criteria and to introduce the euro in 2012 or 2013.
Data from the Financial and Capital Market Commission show that in 2007 the Bank of Latvia's revenues from forex trade amounted to 107.3 million lats, or 6.9 percent of its total revenues.
Fitch Ratings has estimated that Latvia and Lithuania would be able to introduce the common currency in 2013 and Estonia in 2012. All three countries are suffering from runaway inflation, though prices are likely to begin falling in the second half of the year in large part due to falling consumer demand.