Jurkans in doubt over euro’s future

RIGA - Latvia’s accession to the eurozone is not a matter of economics, but a matter of politics, former Foreign Minister Janis Jurkans said in a discussion organized by the daily Neatkariga Rita Avize earlier this month, reports LETA. Jurkans believes that the fulfillment of the Maastricht criteria will not provide answers to much more important questions, for example regarding the European Union’s political environment and future, if Greece decides to exit the EU. The survivability of the euro is not clear, explains the politician.

Jurkans points out that Latvia did not match any criteria when it joined the EU and NATO. Therefore he is convinced that the country’s accession is a political matter. The question is whether Europe will be integrated with EU countries with common external, security policies and currency or whether it will collapse, since “this process has already started,” claims Jurkans.

The former minister emphasizes that Latvia’s “homework assignments” are currently given by Brussels and those who have lent their money to Latvia. Finance Minister Andris Vilks (Unity), Prime Minister Valdis Dombrovskis (Unity) and Bank of Latvia President Ilmars Rimsevics scrupulously observe each guideline, says Jurkans.
According to Jurkans, Latvian voters will begin thinking about these processes only when they will realize that they are the ones “paying dearly.” In an interview with Rietumu Radio on June 15, Foreign Minister Edgars Rinkevics (Reform Party) countered that the euro remains a strong currency despite all the recent shocks and mistakes made by some eurozone members, and pointed out that approximately 70 percent of Greece’s residents do not support leaving the eurozone.

“We all of course are hearing and seeing the problems the eurozone is currently having. However, we are not hearing as much in regard to what the Greek people think, where a large majority do not wish to leave the eurozone. This is something to think about,” the minister said, adding that the positive aspects of eurozone membership, like the fact that it is easier for money transactions to take place within the eurozone, as currencies do not have to be exchanged.
The minister believes that the main “enemy” for Latvia and Lithuania in implementing the Maastricht Criteria is inflation. As Rinkevics points out, it is not possible to influence the price of fuel, which substantially influences inflation, but which is now falling rapidly, along with other commodities, on world markets.
In order for a country to become a eurozone member, they must complete several criteria - the so-called Maastricht Criteria.

Finance Minister Vilks believes that the election results in Greece is a positive signal for the eurozone. He said that Europe will be closely following Greece, and added that the results of the elections themselves are a positive signal that the euro has become stronger.

He also said that it is also important to understand whether the European Commission and the International Monetary Fund are prepared to restructure Greece’s program, because it is clear that the country is not able to cope.