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5 Jun 2013
Latvia to become 18th Eurozone member
FXstreet.com (Barcelona) - The European Commission confirmed on Wednesday that Latvia had met all the necessary conditions to join the Eurozone in January 2014. The ECB issued a statement earlier in which it approved the accession, although it expressed some concerns about the high level of foreign deposits in the country's banks.
In the statement, the ECB suggested that “a comprehensive policy toolkit” should be devised in order to “deal with risks to financial stability, including those stemming from the reliance of a significant part of the banking sector on non-resident deposits as a source of funding.”
A press conference was held in Brussels in the European afternoon to communicate the European Commission's decision. EU Commissioner for Economic and Monetary Affairs Olli Rehn refuted arguments that the situation in Latvia's banking sector was similar to that of Cyprus. “In Cyprus, the relative size of the banking sector was 800% of GDP, while in Latvia it is below 150% of GDP,” he argued. Rehn added that Latvia's joining the euro is a signal of its strength.
Latvia's Prime Minister Valdis Dombrovskis told reporters today that he hoped the accession would encourage foreign companies to invest more in the country and that it would prompt ratings upgrades. He expressed confidence that "joining the Eurozone will foster Latvia's economic growth.”
In the statement, the ECB suggested that “a comprehensive policy toolkit” should be devised in order to “deal with risks to financial stability, including those stemming from the reliance of a significant part of the banking sector on non-resident deposits as a source of funding.”
A press conference was held in Brussels in the European afternoon to communicate the European Commission's decision. EU Commissioner for Economic and Monetary Affairs Olli Rehn refuted arguments that the situation in Latvia's banking sector was similar to that of Cyprus. “In Cyprus, the relative size of the banking sector was 800% of GDP, while in Latvia it is below 150% of GDP,” he argued. Rehn added that Latvia's joining the euro is a signal of its strength.
Latvia's Prime Minister Valdis Dombrovskis told reporters today that he hoped the accession would encourage foreign companies to invest more in the country and that it would prompt ratings upgrades. He expressed confidence that "joining the Eurozone will foster Latvia's economic growth.”