Valdis Dombrovskis

Joining the euro in 2014 remains one of Latvia’s strategic goals as it recovers from the economic crisis. Latvia still intends to play its full part as a core member of the European Union, its PM Valdis Dombrovskis writes in an article published in Public Service Review: European Union.

“In 2008, when Latvia became the worst hit victim of the global economic crisis. The Distinguished American economist Paul Krugman famously said that “Latvia is the next Argentina”, meaning, in his opinion, the inevitable default of the small Baltic state,” he says.

Dombrovskis points out that now after three years, Latvia’s economy is back on track and in better shape than many other European Union countries.

Credit ratings of many European countries are downgraded and more countries need financial assistance, while Latvia’s accomplishments in restoring financial stability are praised, he says.

“Currently, Latvia is one of the most rapidly growing economies in the EU. In 2011 GDP grew by more than 5 per cent. Production has already reached the pre-crisis level, while exports exceed it. Gradually development can be felt in a real income growth of the population. Unemployment is decreasing gradually; more than 56,000 employees found jobs last year.”

According to Latvia PM, the main task is to ensure constant growth of Latvia’s competitiveness.

“The business environment has to be improved and the productivity of labour must continue to grow along with the added value they produce. Resources of the EU funds should be used effectively, not only to rehabilitate the infrastructure but also to support business activities. Positive indications have been observed already – Latvia has become the Baltic leader in the World Bank’s Doing Business index by scoring 21st place in 2011.”

Dombrovskis stresses that adoption of the euro in 2014 remains one of Latvia’s strategic goals.

“This choice is obvious since the Latvian lats is already pegged to the euro and we have all the disadvantages of the euro without any of the advantages. We have carefully studied the experience of our neighbour and the newest member of the eurozone, Estonia, and it is clear that the introduction of the euro has served as a positive stimulus for the economy, fortifying the confidence of markets and motivating investors to create more new jobs,” he says.

Ref: 105.105.105.1309