Despite crisis, Latvia central bank sure euro is best

Latvia can only gain from adopting the euro and has no reason to delay joining the currency bloc, the head of its central bank said on Friday, brushing off the crisis in the region and an electorate that would largely prefer to remain outside.
Authorities in the Baltic state of just over 2 million people have their sights set on adopting the euro in 2014 - by when at least one of the bloc's current members might have left or been kicked out. "The problems (in the euro zone) are being solved...Each day things are little by little getting better because there are no new surprises," Ilmars Rimsevics told Reuters in an interview.
"Right now, we have this window of opportunity. Latvia is ready to introduce the euro like never before. It would be wrong to miss this opportunity."
Latvia has been praised by some economists for carrying out harsh austerity measures equivalent to more than 10 percent of its economic output, curbing curb its budget deficit after the 2008 global crisis burst a credit bubble.
Others say austerity the spending cuts and tax hikes did much damage, particularly to poorer citizens, and a devaluation of the lat currency would be a better way of adjusting the economy to the crisis.
Estonia entered the euro in 2011, while Latvia and the third Baltic state Lithuania remain outside.
Latvia's government and central bank have been vocal in backing euro entry.
In Lithuania, the government is keen, but the president and central bank have adopted more of a wait and see approach, especially with parliamentary elections due in October.
Rimsevics said the benefits for Latvia of adopting the euro included getting rid of the currency conversion costs faced by businesses and consumers, and by the government when servicing its debt in lats.
"We have lower exports, lower investments, we have a lower employment level because we do not have the euro," he said. "The euro is new jobs, the euro is new money into the budget, the euro is another opportunity for Latvia to sit at the table with the leaders of major countries and solve these problems, instead of leaving these problems in their hands."
Latvian opinion polls have shown little support for the euro, though that will be no barrier to joining as the government does not currently intend to put the issue to a referendum.
Rimsevics said authorities had to explain to voters that the benefits outweighed the cost, including the 28 million lats ($49.7 million) the country, one of the poorest in Europe, would have to pay into the bloc's rescue fund.