In his opening remarks, Vice-President Dombrovskis emphasised that the Euro plays an important role in pushing Latvia's reform agenda, and recalled the historical events on Latvia's path to the Euro area.
Latvia’s decision to stay on its path towards the Euro area
by introducing a severe austerity programme was criticized not only in the country, but also internationally.
‘Some claimed that Latvia is buying the last ticket to the Titanic, others doubted whether it was the right moment to expand the Euro area.’
And yet, ‘over the past five years, the Euro has brought Latvian businesses transparent prices, lower currency conversion costs and lower interest rates.
It has supported exports, as well as investment. At the end of the day, this translates into growth and a better standard of living for the Latvian people.’
The Vice-President underlined that Europe's economy is now entering its sixth year of uninterrupted growth, with record levels of employment, and the Euro is stronger than ever before.
Some participants pointed out that investments in Latvia were expected to grow at a faster rate. They also pointed to the obligations and risks that come with the Euro and argued that many of the acclaimed benefits may not be directly attributable to the new currency.
As regards the key risks, fiscal profligacy in some of the Southern Member States was frequently noted as being of a high concern.
There was an intense discussion about the current problems in Latvia's financial sector related to money laundering. This served as a good example of the need to bolster the supervisory framework and the advantages for Latvia of being in the Euro area, as the effects following the Moneyval revelations could have been much more severe on
a national currency.
The Vice-President pointed to achievements, such as the European Semester, to better coordinate fiscal and macroeconomic policy; the Banking Union to make the financial sector stronger, and improvements to our crisis response toolkit, e.g. the European Stability Mechanism.
Nonetheless, he also spoke about various mounting external risks, and the need to complete important reforms, stating that it is important to bolster the place of the Euro in the global economy. A stronger international role of the Euro could help to protect multilateralism and
a rules-based economic order.
‘Ultimately, it is small trading nations like Latvia who stand the most
to gain by keeping trade open, fair and rulesbased.’