Dear Mr Kazāks,
Dear Mr Dombrovskis,
Dear Mr Bērziņš, Mr Vējonis, Mr Levits,
Excellencies, Ladies and Gentlemen,
This year is a time of celebration and reflection. Twenty years ago, Latvia became a member of the European Union and NATO. Ten years ago, we introduced the euro. Today, those ambitious decisions, made by generations of politicians, civil servants, and diplomats, have contributed to our security and credibility with respect to our partners and investors.
It can be said that the process of joining the eurozone was complex and demanding. Prior to the introduction of the euro, about half of the Latvian population supported the move. At the outset, support was only at 30%. However, today an overwhelming majority of the Latvian public fully supports our membership of the eurozone.
I remember well the process of accession to the euro area. Discussions on the subject were both heated and rational. Some perceived the euro as a means of attaining economic stability, predictability, and closer integration. Others were reluctant to relinquish monetary autonomy and the recently restored national currency – the lats, which was stable and aesthetically beautiful. Yet, today in 2024, the euro represents an integral component of the Latvian economy and our daily lives.
The introduction of the euro was not an end in itself, but a tool to take full advantage of the European Single Market. It has enhanced our competitiveness and facilitated the mobility of citizens and businesses within the European Union. Additionally, it has strengthened Latvia's bonds with Europe.
I would like to express my gratitude to all those who contributed to the successful introduction of the euro in Latvia, as well as to those who continue to strengthen its role today. I hope that the euro will continue to benefit both Latvia and Europe in the future.
Ladies and gentlemen, excellencies,
Throughout the years, there have been many events that questioned the viability of the euro. But the euro has consistently proven its worth.
Latvia has a remarkable story to tell about the euro adoption. In 2014, we became the 18th member of the eurozone. By that time, Latvia had established itself as a trusted member of the European Union and NATO. Consistent decisions to pursue closer ties to the West are our safety and security guarantee today. We also view this as the cornerstone for Ukraine's fight against aggressor.
Latvia introduced the euro only four years after the global financial crisis. Since then, we have continued to make significant progress. For Latvia euro proved to be a powerful tool for our economic stability and integration in the European Union. It has also provided a sense of security and confidence for businesses and society.
After the introduction of the euro, Latvia has gone through several storms.
The COVID pandemic presented a great challenge for our companies and society. The government support package helped to mitigate the economic fallout. Coming out of the pandemic Latvia’s economy was one of the least hit in the European Union. It differs from the financial crises before the euro when Latvia saw its economy shrink the most.
Russia’s war against Ukraine has further tested Latvia's resilience. We have been heavily reliant on imports of energy and raw materials from Russia. The war caused rapid inflation. Only within a year, the majority of Latvian companies were able to restructure their supply routes and find new partners. Most of them are in Europe. Without the euro, it could not have happened that fast.
The resilience of our economy shows that Latvia is better off with the euro than we would have been without it. Latvia continues to enjoy a better credit rating and lower government borrowing costs compared to non-euro Eastern and Central European countries.
When Latvia was joining the eurozone, Herman Van Rompuy, former president of the European Council, said: “The eurozone is again a club with a queue – not at the exit but at the entrance”. Now, we are in the club. But there is a line again. Bulgaria is already at the gates. And I wish them a successful introduction of the euro. Romania and the Czech Republic are lining up. It will not be easy to join. It was not easy for us either. The euro gatekeeper is quite strict. It ensures that the dress code perfectly fits economic convergence criteria.
Once you are in, you are with the best. But membership alone does not guarantee success. It takes continuous effort to maintain relevance and standing among other popular clubs. As members of the club, we have to make the best out of it. It depends on us. It's up to us to decide whether we will spend the entire party just sitting in the corner. Or we seize the opportunity to connect with new people, cultivate meaningful friendships, and generate innovative ideas.
The list of dos and don’ts for the Latvian economy is well known. We have to invest in human capital, connectivity, sustainability, and innovation. We need to streamline our administrative processes to increase efficiency. But I am confident that we have the potential and the right conditions. Now is the time to make decisions and act.
Thank you very much, I hope you will enjoy the conference.
