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Latvia joins the crisis-hit euro zone

Tuesday, July 09, 2013 - 02:02

July 9 - Tiny Baltic country Latvia will become the euro zone's newest member, starting to use the euro from January 1, 2014. While the move may not be that popular among Latvians, it highlights the country's recovery from years of financial hardship. As Joanna Partridge reports, as it takes on its eighteenth member, the euro zone is keen to show it's not disintegrating.

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Joining a club in crisis. Latvia has become the euro zone's 18th member. The tiny Baltic country will start using the currency on the first of January 2014. Latvia's Finance Minister believes membership has benefits. SOUNDBITE: Andris Vilks, Latvian Finance Minister, saying (English): "In spite of today's somehow maybe not so good environment in the euro zone anyway, we are going forward. Because you know how important is this goal. It's a very important anchor for very small and open economies, especially when neighbours are already having the euro. I mean Finland, Estonia and Lithuania have joined, so we are very, very confident in the euro." Not all Latvians feel the same. Polls show around 40% of the country's population of 2 million don't want to change currencies. Many value their independence 20 years after the fall of the Soviet Union. The country is also recovering from financial hardship better than many of its new partners. It has stronger economic growth and lower debts. Taking on a new member gives the euro zone a chance to show the bloc isn't disintegrating, despite its current struggles. Jeroen Dijsselbloem is Eurogroup President. SOUNDBITE: EUROGROUP PRESIDENT, JEROEN DIJSSELBLOEM, SAYING (English): "Except for a few countries, all the EU members will eventually also introduce the euro. This is part of the treaty. And on your question whether Latvia is out of the crisis, I think we've shown a lot of progress on different issues, a lot more stability in the financial market and regaining of trust in the euro. Yet, we have still a lot of work to do, on the banking union, on structural reforms, getting out of the crisis is not something that can be done within a couple of months." A year ago the very survival of the euro zone was in doubt. Its future now seems slightly more secure. But it's still lacking the fiscal policies which underpin a currency. And critics say it's taking too long to introduce much-needed reforms.

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Latvia joins the crisis-hit euro zone

Tuesday, July 09, 2013 - 02:02