1st of January - Eurozone joined Latvia!
  • Are prices expected to rise due to the euro changeover?

Experience in other countries indicates that, as a result of the changeover, prices increased by no more than 0.2-0.3%. In none of the five new EU member states where the euro has been introduced any significant increase in prices has taken place.

It is estimated that the euro cash changeover effect on the overall rate of inflation in Estonia was 0.3, Slovakia - 0.25 and Malta - 0.2 percentage points. So, objectively, the overall impact was minimal. A much greater price increase may be caused by administered price increases, as well as spring frost or rainy autumn, affecting agriculture and increasing food prices.

The introduction of the euro in Latvia will have no significant impact on prices, because price monitoring is supervised by the Ministry of Economy, merchants are involved in a fair price exchange contract, merchants and service providers will have to specify the prices in lats and the euro for 3 months before and 6 months after the euro introduction.

It is also important to involve the public in the fair goods and services pricing campaign and abstaining from using the services of unfair providers.

  • Who will control whether the lats changeover to euro is not used for the purposes of personal gain?

The implementation of the laws will be overseen by the Consumer Rights Protection Centre, Financial and Capital Market Commission, the Bank of Latvia,the Ministry of Transport and the tax administration.

The participation of the public in the campaign of Fair Trade and Services Pricing is very important, refraining from using services of dishonest merchants.

Guidance for more information: The law on the introduction of the euro

  • Since Estonia adopted the euro prices have risen sharply, while wages have failed to keep pace. Will the same thing happen in Latvia? What is the bank's inflationary expectation after euro adoption?

Nominal wages grew by 17% since the 4th quarter of 2010 in Estonia and price level increased by 10%. Previous research shows that the impact of euro adoption on inflation is 0.2-0.3%. In case of Estonia price increase was caused by processes and price rise on the global market – food and fuel.

  • Are Latvia fearful of the 'distortionary effect' on prices where, The vast majority (2/3rds) of the Latvian population, when polled, were strongly against euro adoption. Why their voices were not heard? Historically, cheaper goods grow more in price?

Referendum on the euro in Latvia was made together with the voting of 20 September 2003 on Latvia’s accession to the European Union (hereinafter - the EU). Therefore, repeated voting is not possible because in such case the state contravenes the international commitments, i.e. the law for the accession to the EU, which, similarly as for the majority of EU countries, prescribes that the common currency should be introduced when the country fulfils the economic and legal criteria of the eurozone or the so-called Maastricht criteria.