Changeover to euro running smoothly in Latvia

Ministry of Finances, 01.01.2014

As of today, 1 January 2014, Latvia has successfully joined the European Economic and Monetary Union or the euro area, and euro has become the national currency of Latvia. The preparation for this moment that started 10 years ago is a success – the first 14 euro hours in Latvia went according to plan.

“The New Year’s night and Latvia’s accession to euro area has probably been the most carefully planned event in the history of Latvia. Preparations for this moment started almost 10 years ago, right after the EU membership referendum and accession to the Union. We have successfully reached the objective of ensuring that the changeover is simple, safe and convenient for the Latvian population”, says Sanita Bajāre, State Secretary of the Ministry of Finance. “Let me, therefore, thank all those who spent the New Year’s night working – bank employees, policemen, public servants, mass media and all those who made sure that transition a success.”

The banking sector transition to euro went as planned. Transactions by means of payment cards have not been disrupted. Cash machines were successfully switched from lats to euros at midnight and shortly after midnight all Latvians could withdraw their first euro banknotes. Internet banks resumed operation on the morning of January 1 and people are very actively using the services to check their account balance and manage other financial operations. Inter-bank payments will resume from 2 January, the first workday of 2014. However, most financial institutions have made sure that intra-bank payments are possible already now. Latvia has not only joined the Eurozone, it has also become a part of the Single Euro Payments Area (SEPA). This means more convenient, cheaper and quicker bank transactions across the euro area for everyone in Latvia.

Businesses that work round the clock, such as retail outlets, hotels, restaurants, petrol stations and other commercial entities working, have confirmed that reprogramming of cash registers and POS terminals has been successful. Payments in lats ended at midnight and very shortly after the start of the New Year businesses started to accept card and cash payments in euros. Other commercial entities, such as shopping malls, markets and service companies are, as usual, closed on 1 January. Their cash registers were re-programmed on the last working day of 2013, after the last client was serviced, or will be re-programmed tomorrow before they restart their operation in 2014.

Population of Latvia has been actively preparing for the introduction of euro and depositing cash in bank accounts. At the end of 2013, 630.8 million lats of cash were still in circulation, which is half of the amount at the beginning of the year – 1.2 billion lats. Latvian Central Bank has provided 283.2 million euros requested by commercial banks in November and December. This sum has been delivered further to commercial entities that needed it for cash transactions taking place in the first days of the 2014. 400 million euro-coins of different denominations have been minted since July and 110 million different denomination banknotes have been delivered to Latvia to ensure smooth transition to euro.

Last night, from midnight till 2 o’clock, the toll-free 8000 3000 euro hotline has received 320 calls. People mostly ask about the changeover process, design of euro-coins and banknotes, official exchange rate and the length of the period for parallel use of both currencies. Less than 10 calls were received during the night, whereas after 11 o’clock the number of calls reached up to 90 per hour.

According to the State Police changeover has happened without any euro-related incidents. State Police will continue active monitoring of the situation throughout the January, as it did in December. Inhabitants are encouraged to get acquainted with euro-coins and banknotes, and remain alert when shopping. Commercial banks will stop accepting lats after 6 months following the introduction of euro, whereas Latvian Post Office will stop accepting lats after 3 months. Latvian Central Bank will continue changing lats to euros without any time limitations. However, people are advised to make bigger purchases or transactions by means of wire transfer.

As planned, public services will fully resume operation as usual on the first workday of 2014 – 2 January. Most of public sector IT systems – 106 in total – were switched to euros as early as mid-December. The Single Municipal Information System, binding together the data of 110 counties and 9 largest cities of Latvia and actively used by more than 30 000 inhabitants, is already ready for the euro. 113 legal acts, 603 Cabinet of Ministers regulations and 1 432 municipal regulations have entered into force on 1 January 2014. These legal acts were drafted already in 2013 in order to ensure a smooth transition to euro this year.

Additional information

Euro are accession is an opportunity for Latvia to attract more investment in order to strengthen economic development and benefit the society in other ways. The single European currency – the euro – is used by 320 million Europeans in 17 countries. By joining them, Latvia reinforces its belonging to the European family of nation states and its identity. Latvia will also be an equal decision making partner about the future of the euro area.

The euro will bring several immediate benefits to the population: there will not be any currency exchange costs for euro area travellers, money transfers in Europe will be a lot cheaper and faster.

According to the most recent European Commission Eurobarometer survey, in December 2013 the euro was supported by 53% of Latvians. Experience from other countries that have recently adopted the euro indicates that support for the euro tends to increase after introduction of the new currency, because people start to experience the benefits which come along with euro.

In order to make the transition to euro more convenient for the society, Latvia will continue parallel price reflection in lats and euros until 30 June 2014. Price monitoring will be carried out for the whole of 2014.

Latvia operates a toll-free hotline 8000 3000 where the general public and entrepreneurs can quickly receive answers to euro-related questions. The hotline worked 24/7 in December 31 and January 1, and will be available also during the first part of 2014.

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