Latvia has joined the eurozone as of 1st of January 2014, becoming the 18th member of the group of EU states which uses the euro as its currency.
The former Soviet republic on the Baltic Sea recently emerged from the financial crisis to become the EU’s fastest-growing economy.
Correspondents report much skepticism in the country after recent bailouts for existing eurozone members.
But there is also hope that the euro will reduce dependency on Russia.
EU commissioner Olli Rehn said joining the eurozone marked “the completion of Latvia’s journey back to the political and economic heart of our continent, and that is something for all of us to celebrate”.
The government and most business owners also welcomed the single currency, saying it would improve Latvia’s credit rating and attract foreign investors.
However, some opinion polls suggested almost 60% of the population did not want the new currency.
Latvia became the 18th member of the group of EU states which uses the euro as its currency
“It’s a big opportunity for Latvia’s economic development,” PM Valdis Dombrovskis said after symbolically withdrawing a 10-euro note as fireworks led celebrations in the capital Riga after midnight.
The governor of the Latvian central bank, Ilmars Rimsevics, said: “Euro brings stability and certainty, definitely attracting investment, so new jobs, new taxes and so on. So being in the second largest currency union I think will definitely mean more popularity.”
One of those reluctant to give up Latvia’s own currency, the lats, was Zaneta Smirnova.
“I am against the euro,” she told AFP news agency.
“This isn’t a happy day. The lats is ours, the euro isn’t – we should have kept the lats.”
Leonora Timofeyeva, who earns the minimum wage of 200 lats (284 euros; $392) per month tending graves in a village north of the capital Riga, said: “Everyone expects prices will go up in January.”
But pensioner Maiga Majore believed euro adoption could “only be a good thing”.
“To be part of a huge European market is important,” she told AFP.
“All this talk about price rises is just alarmist.”
Alf Vanags, director of the Baltic International Centre for Economic Policy Studies, told Bloomberg news agency he personally did not like giving up the familiar lats but it was an “entirely irrational sentiment”.
Euro adoption was good for Latvia “on balance”, he argued, since it provided a mutual insurance policy that countries could draw on when they got into trouble.
Latvia, with its large ethnic Russian minority, is often seen as having closer economic ties to Russia than its fellow Baltic states Lithuania and Estonia. Russia remains an important export market while its banking system attracts substantial deposits from clients in other ex-Soviet states.
Maxima Latvia CEO, Gintaras Jasinskas, has lost his job over controversial comments he made after the collapse of a supermarket in Riga.
Gintaras Jasinskas sparked anger by saying: “It is those who feel guilty who resign.”
His remarks came after he was asked whether any company executives would follow PM Valdis Dombrovskis’ lead and step down.
At least 54 people died when the Maxima supermarket collapsed last Thursday.
Asked about the disaster, Gintaras Jasinskas said he felt “responsible, but not guilty”, adding that he could “look people in the eyes”.
Maxima, which has its headquarters in neighboring Lithuania, operates supermarkets in all three Baltic states.
Latvian Foreign Minister Edgars Rinkevics said on Twitter: “Most shocking and arrogant statement by Maxima Latvia CEO refusing to assume any responsibility for [the] tragedy…”
The foreign ministry summoned Lithuania’s ambassador Ricardas Degutis to demand an explanation, according to local media.
Mindaugas Bagdonavicius, Lithuanian chief executive of the Maxima Group, later announced Gintaras Jasinskas had been sacked over Thursday’s remarks.
Maxima Latvia CEO has lost his job over controversial comments he made after the collapse of a supermarket in Riga
“Shareholders have decided to dismiss from his position the chairman of Maxima Latvija Gintaras Jasinskas for his unacceptably expressed opinion at this painful and difficult time for Latvia’s nation,” Reuters quoted Mindaugas Bagdonavicius assaying.
The Latvian prime minister announced his resignation – and thereby the fall of his government – on Wednesday.
“Considering the tragedy and all related circumstances… a new government is needed that has the clear support of parliament,” Valdis Dombrovskis said.
Latvian President Andris Berzins earlier described the disaster as “murder” and called for foreign experts to investigate what had happened.
He was quoted by Baltic news agency Delfi as saying: “I call on all who look to the future to assess their responsibility and act accordingly.”
Andris Berzins is now considering appointing a new government. Elections are not scheduled until October next year.
The collapse was the biggest loss of life since Latvia became independent from the USSR in 1991.
Latvian police have opened a criminal investigation into the cause of Maxima disaster.
Structural experts have suggested that the supermarket building itself may have been badly designed and so not able to support a garden that was being built on the roof.
Substandard construction materials and corruption are other possible lines of inquiry.
At least 50 people are feared trapped after a supermarket roof collapsed in the Latvian capital Riga, killing two people, say reports.
Other 17 people were injured in the collapse and emergency services recovered two bodies from the rubble.
The cause of the collapse is not known, but Riga’s deputy mayor Andris Ameriks is quoted as saying it might have been caused by an explosion.
There are conflicting reports of what might have caused the collapse, with reports of an explosion and other suggestions that a garden was being constructed on the roof.
At least 50 people are feared trapped after Maxima store’s roof collapsed in Riga
The 500 sq m store run by the Maxima chain was built in 2011, say reports.
Fire and Rescue Service spokeswoman Viktorija Sembele said one firefighter was among those killed, and seven were injured after another portion of roof fell on rescue workers as they searched for survivors, reported the Associated Press news agency.
Local media say a “winter garden” was being planted on the roof using sand which had become sodden with rain.
Emergency services have recovered two bodies from the rubble.
Latvia will become the 18th EU country to use the euro after being approved for membership by the European Commission.
In a report, the Commission confirmed that Latvia had met the criteria for joining the single currency.
Officials hope the news will show the eurozone is set to grow despite a three-year sovereign debt crisis.
The Baltic state is keen to strengthen ties with Western Europe and reduce its dependency on Russia.
Latvia will start using the currency at the beginning of 2014 after meeting the criteria for membership, including low inflation and long-term interest rates, as well as low public debt.
The news came as no surprise after officials said the decision would be “positive” earlier in the week.
Unlike some established members of the zone, Latvia was well within the economic limits set by Brussels for joining.
Latvia will become the 18th EU country to use the euro after being approved for membership by the European Commission
“In much of Eastern Europe there’s widespread enthusiasm – certainly among policy makers – for joining the single currency,” he noted.
“However, polls suggest that many in the country are worried the switch could drive prices higher.”
Anti-euro parties won more than half of the vote in elections in the capital, Riga, last weekend.
Latvia underwent one of Europe’s toughest austerity programmes after the 2008-2009 financial crisis knocked a fifth off its GDP.
Its membership still has to be approved by EU leaders and the European Parliament, but that is seen as a formality.
EU finance ministers are expected to sign off the accession in July.
The European Central Bank (ECB) also gave its blessing to Latvia on Wednesday ahead of the Commission’s announcement, but warned high foreign deposits in its banks were a risk to financial stability.
“The reliance by a significant part of the banking sector on non-resident deposits as a source of funding, while not a recent phenomenon, is again on the rise and represents an important risk to financial stability,” the ECB said.