The small Baltic nation of Latvia has been given approval from its European partners to become the 18th member of the eurozone from 2014.
The ECOFIN council which is composed of the Economics and Finance Ministers of the European Union’s 28 member states has given nod to the country’s euro membership. It had been a long journey for the former Soviet state since it entered the EU in 2004.
Why Latvia intends to join Eurozone?
Latvia is hopeful that entering the eurozone will bring with it the country a number of benefits like lowere interest rates, lower currency conversion costs and increased foreign investment.
What are the challenges ahead for Latvia for joining Eurozone?
Latvia came out from a crisis in 2008-09 to become the EU’s fastest-growing economy, having recorded GDP growth of more than 5% consecutively in both 2011 and 2012. However, Latvian leadership has a major challenge of convincing the people of the benefits of joining the eurozone. There is a widespread skepticism and distrust in the public on the positives of Euro as their new currency as they have witnessed the crisis of Greece and Cyprus and not long ago the Euro was also on the verge of disintegrating.