News / Europe

Latvia to Get Green Light for Eurozone Membership

Reuters
The European Commission will give Latvia on Wednesday the go-ahead to become the 18th member of the eurozone from the start of next year, European Union officials said on Monday.
 
The EU executive will publish a report on whether the small Baltic state meets all the criteria for membership of the single currency, which include low inflation and long-term interest rates, a stable exchange rate and low public debt and deficit.
 
Latvia, which underwent one of Europe's toughest austerity programs after a 2008-2009 crisis wiped a fifth off its GDP, meets all the requirements, the Commission will say.
 
“The decision on Latvia is positive,” one EU official said.
 
Policymakers hope the accession of Latvia will send a strong signal of confidence to investors that despite three years of a sovereign debt crisis, the eurozone is set to grow, rather than disintegrate.
 
The European Central bank will also publish its view on whether Latvia should be allowed to join, but it is only the Commission that has the right to make a legal recommendation.
 
Latvia's membership will have to get the approval of EU leaders at their summit in late June, and the European Parliament will also have to be consulted, before EU finance ministers make the accession formal in July.
 
Latvia's Baltic neighbor, Lithuania, is likely to become the nexteuro zone member after Latvia from 2015, a senior euro zone policy-maker said earlier in May. The third Baltic country, Estonia, joined the eurozone in 2011.
 
To adopt the single currency, Latvia reduced its budget deficit to below the EU ceiling of 3 percent of gross domestic product last year, cutting it to 1.2 percent.
 
Its public debt is around 41 percent of GDP, well below the EU ceiling of 60 percent and its currency has been pegged to the euro since it joined the European Union in 2004.
 
To keep the fixed peg to the euro throughout its economic crisis, Latvia underwent a painful internal devaluation, slashed public sector wages, cut spending and hiked taxes.
 
Latvia posted the fastest economic growth in the EU with 5.1 percent year-on-year and 1.3 percent quarter-on-quarter in the last three months of 2012 but it is still one of the poorest countries in the EU, along with Bulgaria and Romania.
 
Latvian officials are keen to join the euro because many mortgages are denominated in the single currency which they see as less risky than the lat in the longer term.
 
Latvia also wants to strengthen its links with western Europe and be less dependent on Russia. Trade links with Russia are still strong but relations between the two countries can be complicated.
 
Moscow often accuses Latvia of violating the rights of the large Russian-speaking minority. Riga wants Russia to recognize the 1940 Soviet invasion as occupation.
 
While officials are keen on the euro, polls show much of the population is worried a switch will drive prices higher and the country will lose power to Brussels.

You May Like

Photogallery Pistorius Sentenced, Taken to Prison

Pistorius, convicted of culpable homicide in shooting death of girlfriend Reeva Steenkamp, will likely serve about 10 months of five-year sentence, before completing it under house arrest More

UN to Aid Central Africa in Polio Vaccinations

Synchronized vaccinations will be conducted after Cameroon reports a fifth case of the wild polio virus in its territory More

WHO: Ebola Vaccine Could Be in Use by January

Assistant director says that clinical trials of Ebola vaccines are underway or planned in Europe, United States, Africa More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid