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Latvia enters 2014 as 18th member of the euro currency union

RIGA, Latvia - Latvia celebrated the new year as the 18th member of the eurozone, which for all its dents and bruises still represents stability and security to the Baltic country's leaders.

The euro became Latvia's official currency after midnight local time Tuesday (2200 GMT Monday) as New Year's rockets exploded in the skies over the capital, Riga.

Acting Prime Minister Valdis Dombrovskis withdrew the first euro note from a bank machine in a ceremony in Riga after Latvian TV showed pre-recorded greetings from European leaders welcoming his country to the eurozone.

"It's a big opportunity for Latvia's economic development becoming a member of the world's second biggest currency," Dombrovskis said.

After joining NATO and the European Union in 2004, entering the eurozone was seen as a natural step for Latvia's political leadership, deepening the Western integration they have sought since Latvia and its Baltic neighbours, Estonia and Lithuania, broke away from the Soviet Union in the early 1990s.

"Joining the euro marks the completion of Latvia's journey back to the political and economic heart of our continent, and that is something for all of us to celebrate," said Olli Rehn, the EU commissioner in charge of economic and monetary affairs.

However, many Latvians are skeptical about the euro. Opinion polls show about half opposed to the currency switch, though support has risen somewhat this year.

Some are reluctant to give up Latvia's own currency, the lat, a powerful symbol of independence.

There's also concern about the eurozone's financial woes in recent years and resentment toward the austerity measures imposed by the government partly to fulfil the bloc's stringent membership criteria.

Estonia joined the eurozone in 2011 and Lithuania aims to become a member in 2015. That would complete the Baltic countries' efforts to link up economically, politically and militarily with the West while moving away from Russia's sphere of influence.

European leaders hailed Latvia's entry as a boost for the currency bloc, even though the relatively poor country of only 2 million people is a tiny part of the eurozone economy.

Some experts have expressed concern about Latvia's reputation as a haven for suspicious money from the East, just nine months after the eurozone had to rescue Cyprus, a similarly tiny member state that also specialized in attracting huge deposits from Russia.


AP writer Karl Ritter in Stockholm contributed to this report.

The Canadian Press

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