"Latvia is now a strong candidate for the first round of enlargement. If it continues preparing in a serious way and continues to be honest in negotiations, there is no reason not to conclude negotiations in 2002 and have accession in time for European Parliamentary elections in 2004," he said.
But he also highlighted areas of concern.
"We must concentrate on weaknesses which might still exist, not only for Latvia. I encourage governments to increase their efforts in strengthening administrative capacity, judicial capacity and the fight against corruption.
"It is also time to involve public opinion, more than in the past. The best way to guarantee political support is direct contact with people by the country's political, cultural and economic leaders."
The status of Latvia's non-citizens is a "difficult question," he said.
"I have asked the European Commission's legal services department to analyze what their status will be and have received very mixed answers. They won't enjoy all the rights of citizens, but the idea of basic rights is important.
"This is a very complex legal issue and we are absolutely prepared to publish the results of our analysis. Politically, Latvia must not change its present legislation but is invited to continue. The EU is in favor of social inclusion and integration. Measures so far are sufficient."
Non-citizens - Soviet-era settlers and their descendants who have not been naturalized - currently number more than 500,000, or nearly a quarter of the population.
In addition to meeting President Vaira Vike-Freiberga, Prime Minister Andris Berzins and Foreign Minister Indulis Berzins, Verheugen took a trip around western Latvia, taking in not only picturesque towns such as Kandava, but also the area around the former Soviet naval base at Liepaja, which is experiencing severe economic problems.
Back in Riga he emphasized the need to support less developed regions and said EU funding would have a positive impact on the countryside.
"Even in agriculture it cannot be the objective of the EU to repeat mistakes made in other countries. We need to guarantee that people in rural areas can stay and earn a decent living, not necessarily in agriculture, but agricultural policy must take into account that it is wrong to force people to leave those areas and move to the metropolises."
With unemployment levels at around 20 percent of the work force in some regions, Verheugen's comments were welcomed by Janis Rozentals, co-chairman of the Latvian Farmers' Federation, which represents nearly 2,000 farmers. But he said the EU's SAPARD program for rural development, which takes effect this year, was insufficient.
"Latvia totally lacks a rural development program or assistance for people suffering the effects of globalization and the movement to the EU. The EU and the World Trade Organization have exposed Latvia to competition without providing alternatives for those who cannot compete.
"Conditions are good for very strong farms, but large numbers, who are trying to earn a living, have problems complying with the requirements of today's commercial agriculture and would be better off working in other sectors.
"SAPARD is a good start, but for the size of the population, it is very small. The part to be spent on rural development or diversification is very limited. Most will go to a few very big farmers."
Giving a lecture at Riga's Graduate Law School, Verheugen became briefly involved in the war of words surrounding a controversial book of essays published recently by the Vieda publishing house. Four people, apparently students at the Latvian Academy of Culture, handed him a letter signed by Vieda's director, Aivars Garda and a number of MPs. According to the Baltic News Service the letter called on the EU to help remove members of the Russian-speaking minority from Latvia. "Accession to the EU is only possible after repatriation of colonists. The EU should actively support and promote this."
Verheugen declined to comment on the letter.
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