Latvia is expected to receive assent to join the euro on July 9, a decade-long project come to completion despite widespread popular opposition in the Baltic republic. In this, it will join Estonia and precede Lithuania, expected to follow in Latvia’s footsteps shortly.
There are no technical hurdles to the accession. Latvia buckled down hard on amnesty in the wake of 2008 — it was one of the first countries to seek a bailout during those troubled times and was determined to never again have to beg for aid from abroad — and it fulfils all the Maastricht criteria for euro entry with room to spare. The country has pegged the lat, its currency, to the euro for some time, and its governing elite have been broadly in favor of euro adoption for longer than a decade.
Yet the nation as a whole is opposed to this move. Prime Minister Valdis Dombrovskis has been on a public tour to whip up public support to the level of “tepid,” a task he has not yet accomplished. He is adamant that the advantages will outweigh the negatives — merely eliminating currency friction with the euro should provide an immediate economic boost.
The underlying problem is not about exchange rates or even trade flows with the rest of the European Union. The problem goes to Latvia’s history as one of Russia’s backyard playthings, and a national love of independence that is not lessened by the thought of joining yet another supranational entity with a shaky economic present and future.
Yet the options at this point are minimal. Latvia has long since geared its entire fiscal existence to eurozone membership. Russia lies to the east waiting for yet another opportunity to expand its sphere of influence (there is a large Russian minority in Latvia and a sizable chunk of Russian tycoon investments as well). In a very real sense, what the Latvians want is quite beside what they’re about to get.
The EU is neither Russia nor the Soviet Union, and so in most ways. these fears are overblown. Latvia is nevertheless an example of how a state can democratically bind itself to an undemocratic result, and democratically place itself beyond any chance of escape.