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Kiel Institute Focus

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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?

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Kiel Institute Focus

The Kiel Institute Focus Series presents papers on current economic policy topics. Their authors are solely responsible for their content and their views or any policy recommendations they may make do not necessarily represent the views or recommendations of the Institute.

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