Latvia Takes Big Step To Joining Euro
Greece isn't the only euro country struggling to get a handle on its debts; Ireland and Portugal have also been bailed out, Cyprus is in talks for a financial lifeline, and much-bigger Italy and Spain have also faced the gaze of skeptical investors.
Given that seemingly-unappetizing backdrop that's generated a lot of antipathy against the 14-year-old euro within the single currency zone, it may seem somewhat of a surprise to find a country even mulling the possibility of joining. Latvia's neighbor Estonia was the last country to adopt the euro at the start of 2011.
Addressing lawmakers Thursday, Prime Minister Valdis Dombrovskis said introducing the euro was part of Latvia's strategy to cope with the economic crisis.
"From an economic standpoint, right now Latvia is at the crisis' finish line," he said. "Introducing the euro symbolically ends the period of tough economic reforms and secures the state's further development."The prime minister said Latvia will benefit from the euro, arguing that foreigners will consider the country a more attractive proposition to do business and local entrepreneurs will save money on currency transactions. Guntis Snore, who lost his auto repair business and home as a result of Latvia's crisis, is less sure of the benefits but still considers himself a 'euroskeptic.' "I suppose the euro will be good for large exporters, but it'll be bad for small businesses and consumers," he said. "Prices will increase for sure. So I don't see much benefit from it." Doing business has not been a hallmark of the eurozone of late as a number of countries have struggled to convince investors they have a strategy to deal with their debts. Opinion polls in the country of 2 million do show that a majority believes there's no need to rush since Latvia â¿¿ which would be the poorest euro member in terms of GDP per capita â¿¿ may have to contribute to the bailouts that have become such a feature of euro politics over the past few years. A poll by the TNS agency in December showed that 60 percent of Latvians aged 18 to 55 were against adopting the euro.
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