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Ceturtdiena 19.10.2017 | Name days: Drosma, Drosmis, Elīna
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Economist: Latvia’s Eurozone joining will create expenses and many benefits

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Uldis Rutkaste

«Latvia is too closely linked to Eurozone to be able to avoid the problems there,»- said Bank of Latvia economist Uldis Rutkaste in an interview to Latvian Radio.

At the same time, the economist notes that by not joining Eurozone Latvia will not be able to use the offered benefits. This is why, according to him, Latvia’s joining of the Eurozone will create expenses, but there will be more benefits.

«It should be said that, of course, people hear and read different news about the problems in the Eurozone. This makes them reluctant towards adopting Euro, and so it is very important to explain the situation,»- says the economist.

Rutkaste believes that the first year with Euro will have equal benefits and expenses in Latvia. He also said there is a possibility for benefits to exceed expenses. Meanwhile, in ten years’ time, Eurozone joining and Euro adoption could bring the country’s budget an additional 900 million EUR. Moreover – according to the calculations of the Bank of Latvia, the value of produced services and goods could reach eight billion EUR in 2020.

«Euro will, mainly, improve the country’s credit ratings. Looking at the experience of other countries, Euro increased the country’s export, increases production output. This means lower capital expenses. It helps to invest more, helps to produce more – economy develops somewhat more rapidly than in a scenario without Euro. If economy grows faster, people feel it with time,»- says the economist.

He adds that a larger GDP value will guarantee more jobs, larger wages in national economy and larger budget income.

«When assessing the perspective of time, Euro will not make everyone rich overnight. Nevertheless, people will feel the difference in their wallets in the next several years,»- says Rutkaste.

Ref: 103.109.109.3417


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