1st of January - Eurozone joined Latvia!

Latvia and EMU

Latvia as one of new European Union (EU) Member States can choose most appropriate tome schedule for the euro changeover. Joining the euro-area is done in three stages, and the readiness for membership in the Economic and Monetary Policy (EMU) depends on compliance with criteria the in the Maastricht Treaty signed on 1992.

For Latvia membership in the EMU will mean:

  • Single currency with other EMU Member States - the euro;
  • Common monetary policy in all the EMU Member States implemented by the European Central Bank (ECB) together with national central banks;
  • Coordination of economical and fiscal policy among Member States.

The monetary policy within the euro-area is managed by the ECB which in cooperation with national central bankscomprises the Eurosystem. However, liability for the national economy policy shall remain in hands of national central banks. To ensure that the euro-area causes price sustainability it is essential to achieve stable convergence among the euro-area Member States.

Treaty establishing the European Community prescribes convergence criteria for all the EU Member States to get ready for membership in the EMU. These criteria have been set to ensure balanced development of national economies in the EMU and to avoid tension among the EU Member States.

Euro-area Member States prepare annual stability programmes and other EU Member States prepare convergence programmes providing information Member State's medium-term fiscal, economic and monetary policy. The aim is to ensure more compliance with Maastricht criteria to adopt the euro.

Latvia's Convergence Programme 2012-2015 (available in Latvian).

Compliance with Maastricht Criteria