Bank of Latvia President Ilmars Rimsevics: eurozone may already be past the worst

"I would like to believe that the eurozone is past the worst, that Europe is now going through a period of gradual recovery, that it has realized its past mistakes, that the governments of all the member states are reducing costs. I believe that Europe will become healthier, which will give us the opportunity to join the euro area in 2014," stressed Rimsevics.

Rimsevics disagrees with pessimistic comments that the euro area is in decline, and the only question is how soon the monetary union will cease to exist.

"Such prognoses have been made for two-three years already, but we see that nothing of the kind has happened so far, that the euro still is one of the leading world currencies," said Rimsevics, adding that the euro was safe and sound at the moment.

There is every possibility that Latvia will join the eurozone in 2014, emphasizes Rimsevics. The government has been doing everything in its power to make it happen, and the government has clearly stated in its declaration that introduction of the euro is one of the main economic goals of Latvia.

At the same time, it cannot be ruled out that, even if Latvia meets the Maastricht criteria when the moment comes, the door to the eurozone will remain closed to Latvia. Latvia will have to do what the Estonians did - convince the leading European officials and institutions that Latvia will be a full-fledged member of the euro area, that it will be able to pursue balanced budget policy and reduce its debts.

Commenting the opinion that Latvia should not rush to join the eurozone but wait and see how the debt crisis ends, Rimsevics explains that recovery of some of the eurozone countries may take many years, and Latvia cannot afford to wait ten or fifteen years.

Without the euro, paying debts will be much costlier for Latvia, and improving welfare of the Latvian people will be harder. "The eurozone is stable, it is just a few countries that are experiencing problems," says Rimsevics, adding that Latvia should follow the example of those European Union member states that have already taken the decision to join the euro area.

People often ask the question whether joining the eurozone will jeopardize the future of Latvia, but Rimsevics believes just the contrary - as a eurozone member, Latvia will become an active participants in discussions on the matters of vital importance for the country - distribution of structural funds, interest rates in Europe, and others.

LETA