European Commission President José Manuel Barroso said: "I am delighted to welcome Latvia as the eighteenth member of the euro area. This is a major event, not only for Latvia, but for the euro area itself, which remains stable, attractive and open to new members. For Latvia, it is the result of impressive efforts and the unwavering determination of the authorities and the Latvian people. Thanks to these efforts, undertaken in the aftermath of a deep economic crisis, Latvia will enter the euro area stronger than ever, sending an encouraging message to other countries undergoing a difficult economic adjustment. On behalf of the European Commission and myself, I offer my sincere congratulations to Latvia and best wishes for the future."
Olli Rehn, Vice-President of the European Commission responsible for Economic and Monetary Affairs and the Euro, said: "I want to very warmly welcome Latvia to the euro. Your efforts have paid off and your country's strong economic recovery offers a clear message of encouragement to other European countries undergoing a difficult economic adjustment. Joining the euro marks 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."
From tomorrow, the euro will gradually replace the lats as the currency of Latvia. There will be a dual circulation period of two weeks, during which the two currencies will circulate alongside each other in order to allow for a progressive withdrawal of Latvian lats. When receiving a payment in lats, the change will be given in euro.
1) The introduction of euro cash in the Latvian economy
Commercial banks have received euro banknotes and coins in advance from the Latvian Central Bank, the Bank of Latvia, and have in turn supplied euro cash to shops and other businesses.
A total of 800,000 starter kits with euro coins bearing Latvian national sides have been available to the general public since 10 December. Moreover, 70,000 dedicated starter kits have been offered to retailers.
As of 1 January, the Bank of Latvia will change unlimited amounts of lats into euro at the official conversion rate (1 EUR = 0.702804 LVL) for an unlimited period of time and free of charge. Commercial banks will provide unlimited cash exchange services free of charge until 30 June 2014 and post offices until 31 March 2014.
Nearly all automatic teller machines in Latvia will distribute euro banknotes within the first 30 minutes of 1 January 2014. To facilitate the process, some banks have extended business hours. On 1 January, 22 branches of the three largest banks will be open during the afternoon. Several banks will deploy additional staff for cash operations in branches during the dual circulation period. Post offices will not open on 1 January, but against usual practice will do so on the following Saturday (4 January 2014).
2) The conversion of prices
Prices have had to be displayed both in lats and euro since 1 October 2013 and this rule will apply until 30 June 2014. In order to address consumers' concerns about price increases and abusive practices in the changeover period, a "Fair Euro Introducer" campaign was launched in July 2013. It calls on businesses (e.g. retailers, financial institutions, internet shops) to commit not to misuse the changeover for their own profit, to respect the changeover rules and to provide the necessary assistance to their clients.
Compliance with the requirements for price display and conversion during the dual display period and the implementation of the "Fair Euro Introducer" campaign is monitored in particular by the Consumer Rights Protection Centre. It may impose fines and put the names of enterprises that do not observe the "Fair Euro Introducer" Memorandum on a publicly available "black list".
Background
On 5 March this year, Latvia formally asked the Commission to deliver an extraordinary convergence report with the aim of joining the euro from 1 January 2014.
On 5 June, the Commission concluded that Latvia meets the criteria for adopting the euro (for details of the assessment please see IP/13/500). On 9 July, the EU Finance Ministers took the formal decision opening the way for Latvia's adoption of the euro.
Thereafter, Latvia started preparing the changeover to the euro by implementing its national changeover plan, providing all the details for the organisation of the introduction of the euro and the withdrawal of the lats. This set, for instance, the timetable for supplies of euro cash to commercial banks and to retailers, the rules for cash exchanges for citizens to be applied before and after its "day one" of the euro, the strategy for adapting bank accounts, electronic payments systems and ATMs to the euro etc.
The preparations for the changeover have been complemented by a comprehensive communication campaign of the Latvian authorities. The European Commission and the European Central Bank have contributed to these efforts.
