Kalsone says Latvia on track for euro adoption

RIGA - Nordea bank’s chief economist Tonu Palm said that when Latvia adopts the euro, it is another sign of the euro area strengthening and also a very important development for Estonia, reports Public Broadcasting. “When investing in Latvia, the euro will bring more stability there, also currency transfer costs will decrease. The main thing is that the neighbors are doing well. Latvia is nearly the fourth export partner so that if the Latvian economy does well, Estonia benefits and vice versa,” Palm told the national radio.

Director general of the Chamber of Commerce and Industry Mait Palts also said that Latvia adopting the euro is in the interests of Estonia and the whole euro area. “For us certainly the investments security and attractiveness of the region will get a positive push. Latvia has actually been for Estonia constantly in 3-4th place of total volume of exports and imports. Thus handling things with Latvia will become certainly simpler for entrepreneurs,” said Palts.
During a meeting with Latvian Prime Minister Valdis Dombrovskis on Jan. 4, representatives from the Latvian Employers’ Confederation (LEC) once again confirmed their support for Latvia’s eurozone membership. “We have had wide ranging discussions on the implementation of the euro within LEC, and we came to the conclusion that we must be part of a strong nucleus, and this strong nucleus will be eurozone countries,” LEC Director General Liga Mengelsone told members of the press.

LEC President Vitalijs Gavrilovs also said that state and civic leaders must continue to express their support for the euro in order to convince the public about joining the European single currency in 2014. “If we are not involved in these processes, we will all be losers,” Gavrilovs said.
The prime minister also pointed out that the LEC has always supported Latvia’s eurozone membership. “The LEC continues to actively support Latvia’s eurozone ambitions,” Dombrovskis said.
The confederation’s council, assessing the euro adoption’s impact on the Latvia’s economy, explains that Latvia’s compliance with the Maastricht criteria indicates the country’s economic and political readiness for the euro and adds that closer integration in the European Union will ensure sustainable development and a safe future for Latvia’s economy.

Latvia has been fulfilling all Maastricht criteria for four consecutive months; therefore, the country’s request to assess its euro readiness will be submitted in the near future, Euro Project Manager Dace Kalsone told Latvian State Television on Jan. 2, reports LETA. The assessment will be requested in late January or early February. Usually such assessments are carried out every two years. Latvia was evaluated last year. Therefore the country will have to request an extraordinary assessment out of the two-year cycle.

The request is the government’s competence, said Kalsone and added that Saeima continues to work on the euro introduction bill which, however, will not have a direct impact on the request.
Asked if the euro introduction process in Latvia can still be halted after the assessment is requested, Kalsone said that there is no need to halt “a chance to reach Europe’s welfare level.”

The introduction of the euro, according to Kalsone, will be Latvia’s opportunity to reach Europe’s average salaries and pensions. Economically-active residents and travelers will be the first ones to benefit from the adoption of the euro. The state will try to ensure that the transition period not be used to raise prices, emphasized Kalsone.
In December 2012, approximately 540,000 residents said they approve of Latvia’s transition from the lats to the euro, according to a survey carried out by the market, social and media research company TNS Latvia. Public support for the euro has improved over the past few months.
TNS Latvia expert Ilva Pudule explains that the number of euro supporters has increased by 90,000 persons since October.

Euro support has improved among young persons (aged 15 to 24), persons with basic, incomplete secondary or higher education, Rigans, persons living in the vicinity of Riga and in other cities.
The survey was carried out from Nov. 28 to Dec. 17; altogether, 1,024 residents aged 18 to 74 were interviewed.
Latvia is planning to adopt the euro on Jan. 1, 2014.