Latvia’s Accession to Eurozone Cleared by European Parliament

The European Parliament this week gave its blessing to Latvia’s bid for euro membership, praising the Baltic nation’s recovery from the crippling financial crisis and its high marks under the Maastricht Treaty, the guidelines for permanent euro membership. The vote marks what is certainly the final sign of the transition’s inevitability, and is a triumph of a decade and more of Latvian diplomacy.

It is also, it should be noted, being done despite Latvia’s population.

Interviews with Latvians over the last three months have shown a people who are deeply wary of the euro, even though their currency, the lat, has been pegged to the euro for years. Fewer than forty percent of Latvians are keen to join the euro, and although that number has risen of late, it is unlikely to reach majority status until many years after the switch is complete.

Latvians are not stupid, and understand well that there will be economic gains from joining the euro (not least will be the savings from the currency exchange required under a fully-pegged system) and strategic gains from having yet another bulwark against Moscow. Yet many are deeply uneasy about the eurozone’s financial instability over the last four years (an unease that has grown appreciably since the abrupt resignation of two Portuguese government ministers and the flareup in the country’s bond markets that followed). Many more are uncomfortable with the eurozone’s less-than-competent and significantly-less-than-democratic response, in which local democracy has been suspended repeatedly for the good of the zone by bureaucrats who seem to meander from one crisis to the next.

In both of these things, Latvian memories of the Soviet Union are triggered all too clearly.

Latvian elites remain adamant that resistance to the transition stems from overblown fears brought on by the euro’s several crises and a great deal of misunderstanding. They correctly note that the 2004 law beginning the transition was a democratic result, and believe that after the benefits of euro membership become apparent, resistance will disappear.

The issue is neither black nor white, and so as with most muddled things, will almost certainly continue with the status quo. Yet it is an irony that an achievement that is supposed to mark another achievement in democracy for Latvia will almost certainly be accomplished in the manner of European democracy — by the people’s elected representatives, and despite the people’s will.

Rich Seibert contributed to this report.