Latvia Joining Eurozone as of January 1st, 2014
Latvia is replacing its currency, the lats, with the euro on 1 January 2014. The conversion rate is set at 0.702804 Latvian lats to one euro.
At the start of 2005, the lat was pegged to the euro at Ls 0.702804 = €1 (within a 1% band). It joined the Exchange Rate Mechanism (ERM II) in May 2005 and an assessment published by European Commission in June 2013 asserted that the country had met all the convergence criteria necessary for euro adoption.
Following the next two weeks after euro adoption, Latvian residents will be allowed to use euro and lats at the same time to pay in shops and supermarkets. Starting January 15, 2013, however, all transactions will need to be in euro. Latvia will use the same euro banknotes are the rest of the Eurozone. Euro coins will be minted with Latvia’s national symbols.
Residents will be able to exchange lats for euro with no commission payments in the first six months of 2014 at commercial banks. The Bank of Latvia will be exchanging lats for euro for an indefinite period of time. Non-cash convergence into euro will go much more smoothly – all money that is stored on bank accounts will be automatically converted into euro on the day of the adoption at the official conversion rate set at 0.702804 Latvian lats to one euro.
There are currently 17 member states in the Eurozone: since 1999 – Austria, Belgium, Germany, Ireland, Italy, Spain, Luxembourg, the Netherlands, Portugal, Finland, France, since 2001 – Greece, since 2007 – Slovenia, since 2008 – Cyprus and Malta, since 2009 – Slovakia, since 2011 – Estonia. Latvia will become the 18th member state of the Eurozone on January 1, 2013.
According to the Latvian Minister of Finance, Mr Andris Vilks, during next year Latvia will receive vast media attention from all over the world. Besides that during next year Riga will be the European Capital of Culture, in 2015 the Presidency of the Council of the European Union will be also hold by Latvia. “No doubt that will bring extra media attention to the country. Estonian experience with adopting euro alone in 2011 shows that this is a good opportunity for marketing – there were lots of articles giving an overview of Estonia. The interest and trust of investors and entrepreneurs from other Eurozone countries showed a significant rise. European tourists’ interest towards Estonia had an increase in numbers as well. We could expect all that happening to Latvia”, said the minister.