Latvia is going to enter the Eurozone in the near future

13.09.2013

On the 12th day of September 2013 in Riga there was a Euro Conference, where was the discussion between the representatives of the Bank of Latvia, the Ministry of Finance of Latvia, the ECB, and the European about the development of the euro zone. The result of all events is the fact that from 1^st day of January Latvia will be the eighteenth member of the Eurozone. The Bank of Latvia has already notified that the changeover to the euro from the January 1, will take place at the current exchange rate of the lat to the euro which will be indicated by Bank of Latvia, at that each lat is 1.42 euro.

Along with the positive aspects of Latvia's accession to the euro zone, such as: improving conditions for business development, attraction of additional investments, there are also some concerns. First of all, the ECB is picked up on that in the Latvian banking sector involved a large amount of non-resident funds that could harm the stability of financial statements.

Based on: http://www.bank.lv/en/

Expert’s opinion

Euro is a strange currency. There are a lot of peculiarities. Let me draw your attention only on the following aspect: on the one hand, the single currency, and this is an advantage that simplify the calculations between the EU members. There are no problems with the exchange rate differences in calculations. On the other hand, some EU countries do not want to enter the euro zone and at the same time there are some EU countries with the desire to enter the the euro zone, but they have no authorization.

Great Britain and Denmark are the rich monarchy. And to abandon its currency does not want.

Latvia is a small country, though larger than Denmark (of course, without Greenland), but for her the transfer of sovereignty is the decided question.

How this step will affect the clients of Latvian banks? Definitely, bank supervision will increase. Compliance will be stricter during the opening of bank account. Latvian banks are becoming European banks to the full extent. The advantage is that we can expect the increase of reliability of the Latvian financial institutions. But we should remember about the example of Cyprus.

In general, the euro will excite Latvian banks and customers of these banks for a while. The increase of bank fees is quit predictable. In all other respects, everything will remain the same. And the rich donor countries of euro zone will nourish with and support lazy Greece.

Yaroslav Lomakin ( Managing partner of “Honest&Bright” company)