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José Manuel Durão Barroso
President of the European Commission
Speech by President Barroso on the Occasion of Latvia joining the euro
Conference on the introduction of the euro in Latvia
Riga, 10 January 2014
President of the European Council,
Ladies and Gentlemen,
Today is a day of celebration. A day that many people would not have been able to predict. Because not so many years ago, we lived in a divided Europe. And today we are celebrating not only Latvia joining the euro, but Latvia being at the centre of the European Union, at the core of European integration.
Even as recently as 2009, with European countries struggling with the economic, financial and debt crisis; with Latvia's economy under a heavy adjustment programme; with speculation about the dissolution of the euro area or, as we have heard, speculation about the possible implosion of the European Union, no one – or at least not many outside Europe – were thinking that the Latvian accession to the euro was going to happen so soon. But it happened. And today we are celebrating here, not only Latvia's determination, but also the strength of our common currency and the strength of the European Union as a project.
So I congratulate you all in Latvia - the Government, the Parliament, social partners, and citizens - for the real achievement in joining – and it now seems very smoothly - the Euro on the 1st January. This is a result of your strong determination to move out of an adjustment programme through often painful but necessary reforms, and to reach your clearly set goal. You have shown the way to others who need to continue reforming their economies and to those who also want to join the euro.
And while I want, if possible, to congratulate each and every one of you – from the authorities to the citizens, companies, experts that made this possible – I think it is fair to have a special word of congratulations to you, Prime Minister Valdis Dombrovskis. Because in a time of uncertainty you defined a goal, you kept your determination and indeed you made us believe that this was possible. The European Commission and all of us in the European Union were proud to be at your side and to support you in reaching this objective.
Ladies and Gentlemen,
We have no illusion about how hard the crisis has hit you in Latvia. We know that problems and challenges remain.
However, I believe that with the transformative efforts you have made, you now have great conditions to give prosperity and hope to your citizens, especially to your young people. The reality is that now you have one of the highest rates of growth in the European Union and at the same time you have robust public finances. You have shown that it is possible to transform the economy; you have shown that adjustment programmes, if properly implemented, do work.
Ten years ago in May, Latvia joined the European Union. And ten years later, Latvia is part of the euro area.
The 1st January 2014 will be engraved in your memories and embedded in the minds of your children and grandchildren as they learn about the history of your country.
The accession to the euro is more than an economic relevant fact. Certainly – and people may ask what is the advantage of having the euro - the accession to the euro, for instance, simplifies life for businesses, for travellers, who won't have to make so many exchange operations. The euro makes Latvia more attractive for investment, namely for the most important European companies, for which the exchange rate is reduced to zero. That's a very important asset for a country like yours, which, of course, is trying to attract even more important foreign investment. It will also – and that's important – simplify and facilitate trade and investment both ways. That's why the business community is supportive of the euro. It will be especially helpful for SMEs that, of course, see the costs reduced in some operations.
But, as I was saying, the euro is not just good from an economic and practical point of view. It is also about a common project. The euro is also a political project for European unity. And the euro offers Latvia economic but also geopolitical opportunities. Because joining the euro means that Latvia is now at the core of the European integration; that Latvia is not on the periphery but at the centre of our Union.
Ladies and gentlemen,
More Europe does not mean less Latvia.
Latvia's influence will increase as part of one of the two biggest international currencies; a currency that now has 18 countries and 333 million people.
Latvia will be able to take full advantage of the single market – the rock on which growth and jobs are built, through free movement of people, goods and services.
And it does not end in 2014. In the first half of 2015, we are looking forward to seeing Latvia as the Presidency of the Council of the European Union.
And rather than benefitting from the solidarity it has previously needed to receive, Latvia is, today, ever more relevant, giving a contribution to the European Union and also influencing decisions.
This is illustrated in no better way than by your national symbol, Milda. By being on the euro, she will travel across a euro area of around 333 million people; visible in Europe from Finland to Portugal; from Asia to the Americas. So, Milda will be all over the world. And you have noticed that I mentioned Finland and Portugal. Not because the Vice-President for Economic and Monetary Affairs and the Euro, Olli Rehn, comes from Finland and because I come from Portugal, but because I want to make an image about North and South.
I also know that you are going to use Riga as the European Capital of Culture as a further opportunity to make Latvia better known in Europe and in the world and to show what Latvia has to offer not only economically but culturally to European and global partners.
Ladies and gentlemen,
Latvian accession gives our common currency a vote of confidence within Europe and globally. It sends the message that the euro is attractive and open to all Member States that fulfil the required conditions. It helps to prove the doubters wrong. And, of course, we hope that in fulfilling the conditions, Lithuania will be the next member of the euro. So this is still work in progress. And when we think that not so long ago, many experts and commentators were predicting the implosion of the euro, Member States leaving the euro, we see today that more countries are joining our currency. Can there be better proof of the resilience and the strength of our currency, of our economy and of our European project?
Because this was never a crisis about the euro as such. It was an economic, financial and debt crisis affecting many countries, including ones inside the Euro area, others outside the euro area. We start 2014 in a far better place than at any time since the beginning of the crisis.
Why? Because the euro has proved to be an anchor of stability in the financial and economic storm. And with the financial and debt crisis revealing some weaknesses in the framework coordinating economic policies in the Economic and Monetary Union, the euro has now matured and come of age. Our Member States, working together with the European institutions, have understood that to sustain a common currency they should move forward in terms of economic governance integration. That is why, today, we are in a much better position than some years ago. We have shown that the Euro is, and remains, a stable, strong and credible currency.
That is what we have done by taking forward work to have greater convergence in budgetary and economic policy and to continue structural reforms – as there are no reasons to be complacent - so as to start seeing the real benefits in the form of sustainable growth and jobs.
Latvia - and indeed this wonderful building in which we find ourselves today - are very well placed to understand and promote growth and competitiveness.
Ever since it joined the Hanseatic League in 1282, trade and the important geopolitical location of Riga have been the lifeblood of this city known as the Pearl of the Baltic, so elegantly depicted in this Great Hall of the Small Guild, alongside other Hanseatic cities and as the bridge between east and west.
So, let me conclude by saying:
Congratulations for your hard work, determination and dedication to Europe and to join the euro;
Welcome into the euro area;
I look forward to working with you within the euro area in 2014 to get growth and jobs for our citizens:
A sentiment that is so well set out in this Great Hall when we see inscribed here: "Wo Arbeit das Haus bewacht, kann Armut nicht hinein", "Where work guards the house, poverty is closed out". This is what we need in Europe: more work and more determination for greater prosperity for our citizens.
Thank you very much.