Latvia becomes 18th member of the eurozone

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Latvia has marked the new year with a new currency as it became the eighteenth country to join the euro.

Shoppers out in the supermarkets on New Year’s Day expressed the usual worries about prices rising with the changeover, which went smoothly according to banks and retailers.

There was some confusion at the checkouts as people paid with the old money and received change in the new euro coins and banknotes:

One woman said: “Nice, good-looking money, but unfortunately I still don’t understand it.”

Another shopper added: “It seemed a bit strange – the fact that we have these completely different banknotes. It feels a little odd, yes.”

Latvia’s prime minister, Valdis Dombrovskis, flashed the cash with the first withdrawal alongside Andrus Ansip, his counterpart from neighbouring Estonia, which started using the single European currency two years ago.

The remaining Baltic EU member, Lithuania, hopes to follow next year.

Latvia joins the euro as it recovers from a major economic crisis and the worst recession in the EU. It needed an international bailout amid stringent austerity measures.

At the official launch ceremony Dombrovskis said euro adoption was an opportunity, but not a guarantee of wealth, and the country should not relax its fiscal policy: “It’s not an excuse not to pursue a responsible fiscal and macroeconomic policy,” he said.

Latvia enters the euro zone as the single currency bloc marks its 15th anniversary, and the euro is now used by 333 million Europeans.

Even so, neighbouring Lithuania is the only remaining EU country showing much enthusiasm for euro admission.

That follows the problems experienced by eurozone members Greece, Ireland, Portugal, Spain and Cyprus which had to seek international bailouts for their government finances or their banks.

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