|Author (Person)||Giuli, Marco|
|Series Title||Social Europe|
Analysis report about Latvia's accession to the Eurozone.
Latvia decided on the 4 March 2013 to apply to join the eurozone in 2014 by signing the formal application which was handed over to the EU institutions the day after.
On the 7 June 2013, the European Commission gave Latvia the go-ahead to become the 18th member of the Eurozone at the beginning of 2014
Latvia pegged its currency to the euro after joining the European Union in 2004. It and Lithuania, which pegged in 2002, stuck with the links through two years of turmoil after 2008 which saw their economies shrink by up to a fifth.
Latvia's Financial and Capital Market Commission on the 18 June 2013 said it had imposed a fine of 100,000 lats (€142,543) - the maximum fine under Latvian law - on a bank involved in laundering over €170 million stolen from the Russian government.
Latvia will join the EMU at the beginning of 2014. At the same time, the country is adopting a regime of tax exemptions which favours non-residents. This has led many to believe that Latvia is choosing the same disruptive business model that was at the root of the Cypriot crisis. This article intends to figure out whether the conditions which nearly led Cyprus to collapse could be repeated in Latvia. It makes the point that, regardless of the growing similarities between the two countries, Latvia’s accession to the EMU should pose bigger questions related to some structural weaknesses in the eurozone governance’s architecture in the making.
|Subject Categories||Economic and Financial Affairs|
|Countries / Regions||Latvia|