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RIGA, Latvia (AP) â¿¿ Unemployment, recession, debt, crisis and bailouts: These have been the sort of words that have been associated with the euro currency over the past few years.
So it may come as a bit of a surprise to hear that a relatively poor country on the edge of the European Union is hurtling toward full membership within the year.
Latvia is the country in question and its lawmakers passed legislation Thursday that brought membership one step nearer in spite of widespread worries among the population.
Latvia, which became independent from the former Soviet Union in 1991, intends to send a formal request to the European Union next month asking permission to adopt the euro â¿¿ a request that, if approved, would make it the 18th EU country to use the common currency that over the past few years has been ravaged by a debt crisis that at times has threatened its very existence.
Latvia's center-right government believes that becoming a member of the euro bloc will attract investors to the small, open economy that at the start of the global financial crisis, between the years 2008 to 2010, saw economic activity collapse by nearly 25 percent.
The country had to borrow â¿¬7.5 billion ($10.2 billion) in bailout funds from lenders such as the EU and International Monetary Fund in order to avoid bankruptcy. In return, the country had to enact painful austerity measures.
Greece has been the most notable casualty of Europe's debt crisis, and its government has had to negotiate two massive international bailouts in order to stave off bankruptcy. In return it's had to enact steep salary and pension cuts as well as tax increases â¿¿ a combination that's contributed to a five-year recession and sky-high unemployment of around 25 percent.