Latvia’s government wants to introduce the euro despite a majority of Latvians opposing entry into the eurozone.
There will be no referendum on the decision, which is expected to be approved by the European Union this summer.
Latvia’s Baltic neighbour Estonia already adopted the EU single currency back in 2011. Foreign direct investment doubled and interest rates dropped.
Its western neighbour Lithuania plans to join the eurozone in 2015, and the single currency debate is also heating up in Poland.
Latvia fulfills all the criteria necessary to join the euro under the Maastricht Treaty: its budget deficit was 1.5 percent of GDP last year, debt burden is well below the 60 percent ceiling, prices are stable and long-term interest rates are low.
So far, 17 out of the EU’s 27 member states have adopted the euro. Joining the single currency is a logical step forward for Latvia which already has its currency, the Lats, pegged to the euro.
Latvia would be the poorest member of the single-currency area, but it is also the European Union’s fastest-growing state and is expected to get the thumbs up from EU finance ministers.
In that event, Latvia could switch to the euro as early as next January.
Euronews spoke to the Latvian Central Bank Governor Ilmars Rimsevics. To listen to the complete interview (in English), please click on the link below