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European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

Remarks by President Barroso on the occasion of Latvia's euro entry

Press conference

Riga, 10 January 2014

Thank you Mr Prime Minister,

President of the European Council,

Ladies and gentlemen,

Good afternoon,


I am delighted to be here with you in Riga to mark this historic occasion, when Latvia becomes the euro area's 18th member.

We just had a very productive meeting with Prime Minister Dombrovskis, where we discussed Latvia's euro membership and the situation in the EU and Latvian economies.

I would like to take this opportunity to congratulate Latvia for this major achievement, which was made possible through the impressive efforts and unwavering determination of the Latvian authorities and the Latvian people, to whom I pay tribute.

I would like to add a special word of congratulations to Prime Minister Dombrovskis. In fact, my dear friend, you have always believed that it would be possible. You kept the line with strong determination in the most difficult periods and I'm a good witness of these efforts. You know that the European Commission was always standing by you in these efforts and so, to a large extent, it is because of your leadership that we can now be here today.

Let's not forget that not so long ago, you, in Latvia, were suffering the effects of a profound economic crisis and implementing a rigorous economic adjustment programme. While Latvia was not yet in the euro area, the programme implemented by Latvia was in many respects comparable to the ones that are now being implemented in countries in the euro area. At that time there were many criticisms: people were saying it would not work. But it worked. And now, your economy is growing at the fastest rate in the EU and despite the crisis, you have managed to meet the strict criteria for euro entry. You are a shining example to other member states that it is possible to come out the other side of the crisis stronger.

There are also other reasons for Latvia to be proud: Riga is one of the European capitals of culture for 2014, and in 2015 Latvia will undertake its first presidency of the Council. Prime Minister Dombrovskis just informed us that the preparations are going well.

Latvia's euro membership is also a sign of confidence in our common currency. Not long ago, people were predicting the euro's demise. Myself and President Van Rompuy were in several international conferences where our partners were asking about the possible implosion of the euro. What happened? Not only was there not an implosion of the euro, today we are welcoming a new member to the euro area. Can there be a better demonstration not only of the resilience, stability, credibility and strength of our common currency, but also of the capacity of this currency to attract the members of the European Union? I think it's impossible to have a better demonstration.

Latvia's membership shows that the euro remains attractive and open to those that meet the required conditions. And, by the way, we are, as you know, already working with another Baltic country, Lithuania, so I think that not very far from now we will have all the three Baltic States as members of the euro. And I don't need to signal how important this is, not only from an economic, financial and monetary point of view, but also from a political point of view.

I'm saying this because in a year when voters go to the polls in the European Parliament elections, we must remind our citizens of the benefits of a united Europe – and also of the dangers of disunity.

One hundred years ago this year, Europe began a terrible war that tore our continent apart. Twenty-five years ago, the wall dividing our continent was brought down. Ten years ago, we welcomed Latvia and nine other member states into the European Union. And today we are welcoming Latvia as a member of the euro area.

I also believe this year will be very important for Europe because if there are no political mistakes – and I underline this – I believe this will be the year that will turn the page on the crisis.

Indeed, last year, we saw the skies starting to clear on the economic front. Most of our countries have now already emerged from recession. Ireland was the first euro area country to emerge successfully from an economic adjustment programme agreed with the European Union and with the IMF. And now we are seeing very good indications regarding Portugal, regarding Spain, which is also going to exit the programme for financial assistance to the banks. Generally speaking, there has been a very good evolution in terms of the costs of the bonds of the so-called periphery countries.

But while we should acknowledge the positive, we must resist the temptation to think our work is done and get some comfort in a false sense of security. No, a lot has to be done. A lot has still to be done in the future.

We cannot sit back and relax when unemployment, especially youth unemployment, is still way too high, and also when businesses are not always able to borrow what they need to invest in the economy and create new jobs.

So this is work in progress. But I think it is fair to say that we are now much better than some years ago. I think it is important to signal to our citizens that there is hope. I think this is exactly the moment to keep up the reform drive, when we can see that it is starting to pay off.

That means ambitious structural reforms at national level, reaching speedy agreement on priority files at European level – particularly on the Single Resolution Mechanism, an dispensable leg of our Banking Union. I hope that this is finally and formally agreed by the Council and the Parliament before the European Parliament's elections.

This idea to keep the reforms is also an important message for Latvia, which should maintain the credible policies that have enabled it to come out of the crisis and join the euro area. Latvia should retain its dedication to sound public finances and economic policies, and pay particular attention to high levels of youth unemployment and child poverty. These problems are still there and cannot be ignored.

The European budget can help to support Latvia as it seeks to implement the necessary reforms to deliver higher growth and more jobs. I urge you to use this solidarity to the full. Latvia, under the leadership of Prime Minister Dombrovskis, got a very good result in the next MFF, the Multiannual Financial Framework. That will be a huge part of the public investment programme in your country from 2014 to 2020, so if you use these funds properly, they can be a great contribution to support reforms, growth and employment in your country.

To conclude, Prime Minister Dombrovskis, Latvia has joined a euro area that is much more than a single currency zone. We are speaking about something that is more than economic or financial - it has a political meaning. Latvia is now at the core of the European Union. Our union is not just an economic union, it is also a community based on solidarity, responsibility and an idea for peace and for justice. Latvia now sits at the euro area's top table, as a stable and well-respected partner at the core of European integration. It is a member of the European Stability Mechanism and the Banking Union we are in the process of creating.

Once again, I would like to say to the people of Latvia, welcome to the euro: esiet sveicināti.

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