Prime Minister Valdis Dombrovskis in his interview to the American business news site Bloomberg explained that for the 2012 budget drafting process Latvia needs to implement the final fiscal adjustment totalling about 0.8% of its GDP or about 100-110 million LVL.
Latvia has set a clear target – to join the Euro zone by 1 January 2014: “Latvia’s national currency lat (LVL) is already pegged to the euro with a very narrow fluctuation corridor, therefore we are actually affected by any euro problems but we cannot take any of its advantages – lower expenditures for individuals and businesses, and greater trust in financial markets leading to lower credit rates for companies. We carefully follow and study the experience of Estonia which introduced the euro this year, and the effect is apparently good – Estonia’s financial markets are more trusted. We expect the same scenario in Latvia."
A short video of this interview is available on Bloomberg’s YouTube channel: http://www.youtube.com/watch?v=GRgQCLwC-Fg&feature=player_profilepage.