Baltic republic becomes eighteenth member of the eurozone despite public concern and opposition
Nicholas Hirst, European Voice
Latvia became the 18th member of the eurozone today (1 January). Amid a large firework display in Riga as the clock struck 12, Latvians began drawing euros from cash machines.
Bank balances, pensions, salaries and loans have all been converted into euros, replacing the Latvian lat. Latvia's population of two million will still be able to use both currencies until 15 January, although all change should be given in euros.
"I want to very warmly welcome Latvia to the euro", Olli Rehn, the European commissioner for economic and monetary affairs, said yesterday.
"Joining the euro marks the completion of Latvia's journey back to the political and economic heart of our continent, and that is something for all of us to celebrate," he continued.
Although the Latvian lat has been pegged to the euro since 2005, the transition to the euro faced widespread opposition. A survey conducted in August found that only 13% of the population supported the transition. A poll this month found that 58% of Latvians were concerned about the switch, fearing that traders and retailers will increase prices when converting from Latvian lats to euros.The government has introduced rules requiring shops to display prices in both Latvian lats and euros for the next six months.
There is also resistance against giving up the Latvian lat, which has come to symbolise Latvia's sovereignty for many citizens. Latvia became independent from the Soviet union in 1991. Joining the eurozone has also become less attractive in light of the economic problems faced by members including Greece, Spain, Portugal, Ireland and Italy.
But Latvia's government has argued that the move will reinforce Latvia's role in the European project and take it a step further away from Russia's sphere of influence.
Latvia entered the euro at an exchange rate of 0.7 Latvian lats per euro.
Latvia joins eurozone