June 5 - The European Commission's economic chief Olli Rehn says Latvia is ready to adopt the euro from January 2014. (Rough cut - no reporter narration)
(ROUGH CUT - NO REPORTER NARRATION) Latvia is ready to become the 18th country using the euro from the start of next year, the European Commission announced on Wednesday (June 5), a decision that will be formally approved by European Union finance ministers on July 9. SOUNDBITE: European Commission Economic Chief, Olli Rehn, saying (English): "I am very glad to announce that we have concluded that Latvia is ready to adopt the euro on the first of January 2014, the first of January next year, having achieved a high degree of sustainable economic convergence with the euro area. The Commission is now making a proposal to the Council to this effect and I expect that the Council, the Eurogroup, the European Council and in parallel the European Parliament will discuss the matter and this could possibly be decided in the Ecofin Council in July." "Latvia's experience shows that a country can successfully overcome macro-economic imbalances, however severe, and emerge stronger out of the crisis with a solid recovery. Latvia is now forecast to be the fastest growing economy in the European Union this year." "Latvia's prospective euro adoption is a strong signal to the region, to the euro area and to the global community and world markets at large. This underlines the integrity of the euro and shows that sustained and stability-oriented policy actions generate concrete results and that economic reforms pay off." The European Central Bank earlier issued its own positive recommendation for the Baltic state to join the single currency from next January. The euro, launched as notes and coins on Jan. 1, 2002, is now used by around 330 million people. Latvia, with just 2 million inhabitants, plunged into economic decline after the 2008 global financial crisis popped a real estate bubble and toppled one of its leading banks. It lost about a fifth of its economic output and was forced to take a bailout from the International Monetary Fund and European Union. Latvian Prime Minister Valdis Dombrovskis, who sees euro zone membership as a better long-term bet for economic stability than keeping the lat, has pressed on with euro entry, even though polls show most Latvians are opposed to switching currencies. Baltic neighbour Estonia adopted the euro in 2011. Lithuania has said it hopes to join the bloc in 2015. All three countries regained their independence from the Soviet Union in 1991 after spending 50 years under Moscow's domination. Entering the euro zone is part of a process of shifting away from Russian domination after entry into the European Union and NATO in 2004.