(AP) Latvia took a big step Thursday toward adopting the euro currency after its lawmakers passed legislation that could well see the small Baltic country become a member at the start of next year.
In spite of widespread worries among the population that's partly related to Europe's debt crisis, Latvia is on course to joining Europe's troubled single currency zone at the start of 2014 now that Parliament adopted a law on introducing the euro.
Latvia, which became independent from the former Soviet Union in 1991, intends to send a formal request to the European Union next month asking permission to adopt the euro a request that, if approved, would make it the 18th EU country to use the common currency that over the past few years has been ravaged by a debt crisis that at times has threatened its very future.
Latvia's center-right government believes that becoming a member of the euro bloc will attract investors to the small, open economy that in the years 2008 to 2010 saw economic activity collapse by nearly a quarter that's on a par with the sort of contraction of Greece's economy in the past few years.
Greece has been the most notable casualty of Europe's debt crisis and its government has had to negotiate two massive international bailouts in order to stave off bankruptcy. But it's not the only euro country struggling to get a handle on its debts; Ireland and Portugal have also been bailed out, Cyprus is in talks for a financial lifeline, and much-bigger Italy and Spain have also faced the gaze of skeptical investors.
Given that seemingly-unappetizing backdrop, it may seem somewhat of a surprise to find a country even mulling the possibility of joining. Latvia's neighbor Estonia was the last country to adopt the euro at the start of 2011.
Opinion polls in the country of 2 million do show that a majority believes there's no need to rush since Latvia which would be the poorest euro member in terms of GDP per capita may have to contribute to the bailouts that have become such a feature of euro politics over the past few years. A poll by the TNS agency in December showed that 60 percent of Latvians aged 18 to 55 were against adopting the euro.
I believe southern Europe is acting irresponsibly .... we don't want to pay for their problems, said Normunds Bernups, a financial manager in a construction firm who took part in a small protest outside Parliament before Thursday's vote. They already have a better standard of living than we do.
Critics of euro membership have demanded that the government hold a referendum on the issue, but officials have rejected the idea, arguing that Latvians agreed to euro membership when they voted to join the EU in 2004.
European officials have said that Latvia has a good chance to join. The country meets the key criteria on debt, deficit levels, and inflation, and the economy is growing strongly, which would make it some sort of a standout in relation to its potential euro partners. Last year, Latvia's economy is expected to have grown approximately 5.5 percent, making it the fastest growing economy in the 27-member EU.
In the vote, 52 lawmakers supported the law on adopting the euro, while 40 were against in the 100-member legislature. The remaining eight either abstained or were absent.