EU gives Latvia green light to join euro

The European Commission on Wednesday gave Latvia a green light to join the 17-nation eurozone in January, saying the country met the conditions to join the single currency and had successfully overcome its 2008-2009 crisis. "The Commission concludes that Latvia is ready to adopt the euro in 2014," said a report from the EU executive commending the country's economic management over the last few years. The report will be handed to the European Parliament and to finance ministers from the 17 nations sharing the currency, who in July will formally hand down a decision on Latvia becoming the 18th member of the euro area. The Commission said "Latvia has achieved a high degree of sustainable economic convergence with the euro area and proposes that the Council decide on Latvia's adoption of the euro as from 1 January 2014." The EU said Riga satisfied the economic conditions to join -- in terms of price stability and sound public finances -- and that its national legislation was compatible with the rules of Economic and Monetary Union (EMU). But the government also won praise for its handling of a deep recession in 2008-2009. "Latvia's experience shows that a country can successfully overcome macroeconomic imbalances, however severe, and emerge stronger," said the EU's Commissioner for Economic Affairs Olli Rehn. Saying the country was forecast to be the fastest-growing EU economy this year, Rehn said its willingness to switch from the lats to the euro "is a sign of confidence in our common currency and further evidence that those who predicted the disintegration of the euro area were wrong."