Kiel Institute Focus
|No. 23 January 15, 2014|
by Klaus Schrader and Claus-Friedrich Laaser
Latvia now Euro Zone’s 18th member state: Not just cause for celebration
Viewed against the backdrop of a series of escalating crises in the euro zone, it is remarkable that Latvia, now the 18th EU member state, finally adopted the euro as its common currency on January 1, 2014. Having followed in the footsteps of Estonia, which entered the euro zone in 2011, Latvia constitutes the second Baltic state to have met the requisite criteria for adopting the euro as its common currency. The experiences drawn from the so-called “euro crisis” bring two questions to the fore: Can the Latvian economy handle the euro? Is there cause for concern that Latvia’s entry will impose an additional strain on the euro group?