Analytics, Economics, Estonia, EU – Baltic States, Financial Services

Andris Vilks.

Latvia has also set itself a goal of stabilizing the economy so that on January 1, 2014 it would be able to join the eurozone and continue its economic development within the common currency market, emphasizes Ministry of Finance.

"The introduction of euro in Estonia is an important event to the whole Baltic region. It will provide a good basis for the long-term economic development, and also stimulate Latvia to balance its expenditures with revenue in order to join the eurozone in the near future. At the moment it is necessary to remember that it is only possible to join the eurozone if certain criteria are met, and Latvia is on its way to accomplish it by 2014. Therefore clear progress towards balanced budget, price stability and reasonable state borrowing is a prerequisite for long-term stability and the development of Latvian economy," said Vilks.

According to Vilks, Estonia's experience will be useful to Latvia in two ways. First of all, clear and long-term goals and consistent movement towards them shows that macroeconomic stability and eurozone entry can be achieved even at a time when other countries are recovering from the economic crisis. Estonia in this case is a good example to follow.

Secondly, Latvia will also be able to make use of Estonia's practical experience of the introduction of the euro.

Latvia's National Euro Changeover Plan has also been developed and approved by the government, in which the main principle of the introduction of the euro that the introduction of the euro must be organized in such a way that everyday lives of Latvian residents remain unaffected.

Central Bank of Estonia has announced that no deadline will be set for the exchange of euros for kroons, therefore residents do not need to worry about it.

The exchange of euros for kroons according to the official exchange rates is provided by all banks in Estonia from December 1, 2010 until June 30, 2011. Afterwards banks will still continue exchange euros for kroons at specific branch offices, while the Central Bank of Estonia will exchange euros for kroons regardless of the amount and date, therefore Latvian residents who will not manage to exchange their kroons will still be able to exchange them for euros during their next trip to Estonia.