Presentation by Andris Vilks, Minister of Finance, Republic of Latvia. Euro Conference Latvia 2013

1. EURO - key considerations
for future perspective
Andris Vilks,
Minister of Finance
Republic of Latvia
MINISTRY
OF FINANCE
REPUBLIC
OF LATVIA

2. EURO – key element in EU construction
Joining the Eurozone is a logical step, if we believe in EU as an construction
Decline of
Bretton Woods
system
Werner report
1970
«Currency
Snake»
system 1972
European
Monetary system
and ECU 1979
Jacques Delors
report 1989
Maastricht
Treaty
1992
o The key element of EU – a united economic area (free movement of persons, goods,
services and capital) requires a monetary union
o History suggests, that monetary unions without common monetary policy sooner or later
fail
o Common monetary policy would imply single currency

3. EURO – key driving force for change in Latvia
o EURO = crisis exit strategy
o EURO = key driving force:
- to put Latvian economy on solid ground
- to perform structural reforms

4. EURO – catalyst of EU reform agenda
o Euro has been served as indicator to reveal the hidden deficiencies in
EU construction:
- market forces alone cannot exert disciplinary influence to Member States and can
contribute to the financing of economic imbalances;
- EU rules are not respected (Maastricht deficit and debt ceilings, opening of
Excessive Deficit Procedures).
Common monetary policy reveals the inefficiency of current fiscal policy coordination and calls for greater
centralization in management of fiscal policy and greater solidarity

5. Latvia in euro zone – what can be expected from
the new member?
a silent partner? no
focused exclusively on its
short term gains/loses?
no
indifferent to common
problems ?
no
cold to acts of solidarity? no
strong advocate to respect
adopted rules?
yes
believers to fiscal discipline? yes
ally towards the deeper
integration in EMU?
yes

6. Improving the EMU – how far to go towards deeper integration?
Economic
union
Monetary
union
Banking
union
Fiscal
union
Political
union
o In the Eurozone Europeans formulate
their views and attitudes around these
concepts and the future of EU appears
high on political agenda
o Support of Europeans is vital for reforms
to be implemented

7. Joining the EURO – how far to go towards deeper integration?
«Pastāvēs, kas pārvērtīsies»
«Sustain through the change”
J. Rainis 1865 -1929
In the changing environment one could use emerging opportunities for a better life
Introduction of the EURO brings these questions also into the minds of Latvians

8. Growth in natural for all living beings
Global development suggest that deeper
integration in EU is natural
Global development suggest that Euro
introduction in Latvia should be seen as natural

9. RETURNS TO
EUROPE
NATIONAL SYMBOL
OF LATVIA

10. FROM
JANUARY 1ST, 2014
EUROZONE IS
JOINING LATVIA

11. EURO. LATVIA GROWS!
Andris Vilks,
Minister of Finance
Republic of Latvia