By SARAH DiLORENZO and RAF CASERT
BRUSSELS (AP) â¿¿ The euro may stand for precarious economic rescues for some, but Latvia said Tuesday that it hoped joining the single currency would bring investment and development.
At a meeting in Brussels, European Union finance ministers officially agreed to make the Baltic state the 18th member of the eurozone currency union, at a time when many of its partners are struggling with low growth and high unemployment. Latvia will start using the new currency on Jan. 1, 2014.
"It's very symbolic," said Latvian Finance Minister, Andris Vilks. "We are completing our integration into core Europe."U.S. ratings agency Fitch welcomed the decision, upgrading Latvia's long-term credit rating one notch from BBB to BBB+. Once it has joined the eurozone, Latvia's economy would be the third-smallest of the group, larger only than those of Cyprus and Malta. With annual output of about 22.3 billion euros ($29 billion), it would account for just 0.2 percent of the overall eurozone economy. Latvia's prime minister, Valdis Dombrovskis, added that the moment wasn't just about symbolism: He said the euro would reduce currency conversion costs for the tiny country, attract foreign investment and bring more development. He noted that 70 percent of Latvia's foreign trade is already done in euros. European finance ministers and officials brushed aside concerns that it might be difficult to enlarge the eurozone while the region struggles to support cash-strapped members. "Those countries that take care of their sustainable economic development by avoiding excessive macroeconomic imbalances or unsustainable public finances, they do succeed and benefit from euro membership," said Olli Rehn, the EU's economic and monetary affairs commissioner. Irish Finance Minister Michael Noonan called Latvia's adoption of the euro â¿¿ along with Croatia's recent joining of the EU â¿¿ "absolutely amazing when you pull back from the day-to-day workings of the crisis."