Latvia: Euro zone Saviour?

With several countries in the European Union going down, there’s still one within the area who wishes to join the Euro zone – Latvia. Really? Then could Latvia be the Eurozone’s saviour?


Latvian Leadership. Valdis Dombrovskis, Latvia’s prime minister, has boasted that Latvia is now one of the fastest growing economies in the EU and has met all five financial criterias (debt, inflation, deficit, long-term interest rates, and a stable currency to the euro) for a Eurozone applicant.

True enough, Latvia’s desire is strengthening at a time when another member being Cyprus is badly struggling. As the Leader, Dombrovskis sees the Euro zone as an opportunity; and encouraged by Estonia’s progress which explains his long fervor.

However, the strongest point of contention for Latvia’s ambition should be that “since Latvian monetary policy is decided in Frankfurt, they might as well join”. As Dombrovskis stated, “it’s better to be inside participating since what happens to the euro happens to us”.

Latvian or any leadership should just understand that there may be some similarities in countries and specially in organizations, but they are run by distinct personalities – so be prepared.

People’s Pulse. According to opinion polls, majority of Latvians do not share Dombrovskis’ excitement, and the question for a referendum was even brought up. The worry is normal considering what happened to Greece.

However, according to the prime minister, five of the “new” Euro zone members just pushed the idea and did not have a referendum as well. Besides, finance minister Andris Vilks has been explaining to the public the pros and cons of the euro.

The question is: how are those five new Euro zone members “actually” doing? More so, how’s their five financial criterias now? What about their overall employment and citizen satisfaction ratings? These are just a few things concerned Leaders should find out before getting totally immersed.

Euro zone Members. One main concern of the Euro zone in Latvia is its large offshore banking sector, that it may not be doing enough to prevent banks from becoming a pipeline for money-laundering.

Well, totally stopping money-launderers would be tough though the key lies in the monitoring of not just banks but officials, whether public or private. Policies, transparency? Only if officials themselves are closely watched.

German Chancellor Angela Merkel and other European leaders has time and again pronounced their commitment to solving the region’s crisis; but to date, it’s just been a drag. And Russia? Oh, still remains to be seen.

In the end, Latvia could indeed be the saviour of the Euro zone. See, the region is hard pressed while Latvia comes in with hope, ideas and a surging economy that is willing to mesh with all their troubles. And its entry, would only encourage the international community, that the Euro zone may be down but not out.

What’s your take?

One thought on “Latvia: Euro zone Saviour?

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