Latvia

The President of Latvia, Andris Berzins, stated on June 18 that the country will not need to hold a referendum on adopting the euro given that the country's referendum on European Union accession encompassed joining the common currency union. This comes after calls from the head of the Union and Farmers' group at Saeima, Augusts Brigmanis, suggested that a referendum should be held. Indeed, public support for the euro has continued to decline, heavily influenced by the ongoing sovereign debt crisis in the bloc and the country's own economic travails in defending the peg during the downturn. We hold to our view that Latvia will join the eurozone in 2015, however, caution that risks to this outlook are plentiful, not least of which is the survival of the currency itself.

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