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Latvia becomes 18th state to join the eurozone
- elnate 13y ago"Latvia becomes 18th state to throw away control of their economy."
- rjtavares 13y ago17th
- _delirium 13y agoAre you excluding Germany, on the basis that they're de-facto still in control of their local currency's monetary policy? :P
- bernardom 13y agono, he's excluding the UK, which kept the pound.
- _delirium 13y agoThat's not one of the 18 countries in the Eurozone, though. The Eurozone consists of: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. The UK is one of the 10 countries in the EU but not in the Eurozone: Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Lithuania, Poland, Romania, Sweden, and the UK.
- rjtavares 13y agoIndeed :) More of a provocation, since I don't really agree with the idea. It does seems like it sometimes, though...
- antr 13y agoeconomy != control over monetary policy ; but sensationalist media has done a great job at making citizens believe otherwise
- fiatmoney 13y agoNot only monetary policy, but to a large extent their banking system, and their fiscal policy as well.
- pilsetnieks 13y agoKnowing Latvian politicians and bankers, that can only be a good thing.
- guard-of-terra 13y agoSome would say they threw their economy away in mid-nineties. Then again, they seem to fare better than some countries who didn't (Belarus and Ukraine).
- jevinskie 13y agoWhat does this entail? Open borders to EU residents? Just the Euro? Or also free trade within the EU?
- riffraff 13y agoeurozone is a subset of the EU, so free trade and open borders were already there, this is "just" the euro.
- _delirium 13y agoThey've also had their currency pegged to the Euro since 2005 (https://en.wikipedia.org/wiki/European_Exchange_Rate_Mechanism https://en.wikipedia.org/wiki/European_Exchange_Rate_Mechani...), so in a sense their currency has already for years been treated commercially as merely an alias unit for the Euro, like one converts lbs and kg at a fixed rate. The main difference with actually adopting the Euro is: 1) harder to change your mind later, since un-adopting the Euro is harder than abandoning a currency peg; and 2) easier for tourists and cross-border business, since the need for currency conversion & the associated fees is removed. It might also simplify cross-border business accounting, since you'd no longer have assets & liabilities in different currencies (even if pegged ones), though I know less about that. Denmark is in a similar situation: the Danish crown is pegged to the Euro since 1999, so in practice Denmark has no real scope for independent monetary policy. Public opinion is still against joining the Euro for a mixture of nationalistic reasons (people like the currency as a symbol of sovereignty) and value put on having an exit option if things get too dicey (one exit option is to peg to the Swedish crown instead; another is to fully float).
- thaumasiotes 13y agoI can read your comment as pointing this out already, but an important third option is to stay pegged to the Euro, but at a different exchange rate. That's a very large freedom that you lose when you "formalize" a Euro peg by just switching over to the Euro. For example: Year 2024: Our currency is pegged at 3.28 to the Euro. Year 2027: Euros have become too valuable; our peg is now 4.1 to the Euro.
- veganarchocap 13y agoR.I.P Latvia.
- mindjiver 13y agoNational security will always be the number 1 priority with the kind of neighbour Latvia has.
- mpg33 13y agoWhich neighbor?
- scribu 13y agoRussia, probably.
- gaius 13y agoFirst Latvia was occupied by the Soviet Empire, and all that entails, the purges, the gulags and so on. Then it was occupied by the Nazis, and all that entails, death camps and so on. They were especially keen on punishing anyone they thought might have found a way to co-exist with the previous invaders. Then after that, the Soviets again, keen to punish Latvia for "surrendering" to the unstoppable Nazi war machine. The Soviets were keen on lebensraum too, and set about deporting Latvians on an industrial scale, and colonizing the country with Russians. They are still finding pockets of exiled Latvians deep inside the Russian interior, and asking them if they want to come home.
- atmosx 13y agoThe Eurozone (Germany mostly) is getting closer and closer to Russia. I don't think Latvia will gain any advantage from this. Take a look at what happened to Cyprus. They (the EU) would never do that to Italy, no matter how crisis-striken would ever be. Meaning: Say tomorrow Russia invades Latvia, the EU will do a couple statements and that's about it.
- caf 13y agoOn the other hand, the baltics are primarily of interest to Russia as a buffer against invasion from the west, so it is at a time of antagonism between Germany and Russia that Latvia would most need to fear Russian invasion. Latvia can always invoke Article 5 of the NATO treaty, anyway.
- atmosx 13y agoAs I Greek, having the experience of the Euro both theoretically and practically, I can say that the currency per se, it's not a problem but given the way the ECB acts the last 3 years, I don't understand why would anyone give-away the control of the countries currency to a board of people who act in very controversial ways..
- rdtsc 13y agoUsually in exchange for other perceived advantages? -- Less travel restriction, a more open market for products, potentially ability to look for jobs in other EU countries (but I am not 100% sure about this one).
- justin66 13y agoDo today's Greeks blame the bulk of their economic problems on outside forces, rather than things they've done to themselves? edit: I don't really have an agenda with this question - I'm not a European and I'm not invested in any way, really - and I'm a little surprised at how quickly it got voted up. Please just treat it as a sincere question.
- atmosx 13y agoMy first reaction was irony to a very well-known propaganda that is sold throughout Central-Northern Europe to justify totally irrational policies which drove an entire nation to it's knees. But before going into that, I'd like to ask you to be more specific: To which things are you referring to?
- seivan 13y agoYay, another third world country to join EMU. Yes; Spain, Portugal, Italy, Greece & etc are third world countries. These days I even want to add France to it...
- fiatmoney 13y agoTheir per-capita GDP is ~20k in PPP terms, which is hardly third world.
- seivan 13y agoYes, yes it is. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_... It's right there with Italy, Greece and etc. All third world countries.
- romanovcode 13y agoIf you think that Italy and Greece is third world you don't know what you're talking about.
- i80and 13y agoI was in Greece a few years back. It wasn't even _slightly_ third world; actually, it was a really nice place! Get out of your bubble.
- bane 13y agoYou need to spend more time in the third world if you think those virtual paradises are even close.
- middleclick 13y agoRacist much? As someone who grew up in a third-world country, you don't know what you are talking about. Please, educate yourself.
- seivan 13y ago
- duhast 13y agoI hope that Poland will follow the same way.
- X4 13y agoThey are fued.. I feel sorry for them as a European. Our politicians will rip their economy away. This pact they signed essentially sold their country including their people. It's always the same, the strong countries look for weak countries to join their forces by promising money. When the small countries need the money the most, they will get promises and packages coming with many hooks. Hooks that will cripple and kill the economy of the country, such that at the end the strong countries can suck up all that is there. Their money, their land, their resources, their best engineers and workforces. And what's left at the end is not a country, but a lost fight. A fight that was never fought and silently won. Both governments win and assure their own security in trades and assets, but the people loose.
- falsedan 13y agoLatvia planned to join the Eurozone in 2008, but, well, y'know what happened.