Latvia has confirmed that it will be joining the Eurozone in January 2014 and will be switching from its current currency the Lat to the Euro.
Latvian President Andris Berzins confirmed the move after signing the law to introduce the single currency on Friday. The Cabinet of Ministers adopted a detailed national euro changeover plan in September 2012 and appointed a high-level steering committee to manage the process. The government has launched a controversial multi-million euro advertising blitz aimed at winning over Latvia’s sceptical public, it hasn’t worked. The President has come under fire from his people after a recent poll showed that over 63% of the Latvian population do not want to join the Euro.
Latvia will become the 18th country to join the Euro zone, and the second Baltic state to do so. Lithuania intends to adopt the Euro by January 2015. The ongoing Euro crisis has unsurprisingly made joining the Euro less attractive for some countries, with Poland and the Czech Republic deciding not to enter the monetary union.
The Latvian government has either made a very brave decision or a very foolish one. The Euro crisis is still far from over despite economists saying that the worst is behind it. Unemployment continues to rise across the region and the recent GDP figures were some of the worst since the beginning of the global financial crisis.
Economic output out of the area recorded a drop of 0.6% in the final quarter of 2012, 0.2% than the figure forecast by economists. Germany and France, the Eurozone’s two biggest economies, posted worse than expected GDP data signalling that the debt crisis that has crippled the likes of Greece and Portugal could be spreading into the heart of Europe’s most powerful economies.
Current Euro exchange rates
As of 14:30 am
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8620
The Euro to US Dollar exchange rate is currently trading in the region of 1.3349
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2931
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5737