Despite the impact the global financial crisis has had on the Eurozone since 2008, with nations like Spain, Greece, Portugal and Italy having to battle through significant hardships, the currency bloc will begin opening its arms to embrace a new member on Wednesday.
European Union officials have announced that tomorrow Latvia will be given the go-ahead to join the region, with the nation becoming the 18th member of the Eurozone by the start of 2014.
Although a report on whether Latvia meets all the criteria for membership (such as long-term interest rates and low public debt) has yet to be published, one EU insider was quoted as saying ‘The decision on Latvia is positive’.
Since 2008 the Baltic nation has managed to wipe out a fifth off its GDP, reduced its budget deficit to 1.2 per cent and lower public debt to around 41 per cent of GDP.
Although Latvia is one of the poorer nations of the EU, it posted the fastest fourth quarter growth of any of the regions members last year, with quarter-on-quarter expansion of 1.3 per cent and year-on-year growth of 5.1 per cent.
Even after Latvia gets the green-light tomorrow, its acceptance into the currency bloc will require European Parliament consent and for EU leaders to grant their approval at the end of the month, but policymakers are hopeful that if Latvia is welcomed in it will go a long way towards restoring investors’ much-tried confidence in the currency bloc.
If Latvia is accepted it is likely that Lithuania will follow suit within the next two years.
Today Euro movement can be expected to occur in response to the publication of the Eurozone’s Producer Price Index at 10:00 am GMT.
Yesterday the common currency strengthened as manufacturing data showed that the rate of contraction in that sector declined in May.
Euro (EUR) Exchange Rates As of 09:00 –
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3081 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8544 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3517 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6302 >