Latvia joins the Eurozone

Latvia has begun the New Year by joining the Eurozone, becoming the 18th member of the group of EU states which uses the Euro as its currency.

The former Soviet republic on the Baltic Sea recently emerged from the financial crisis to become the EU's fastest-growing economy.

There is also hope that the euro will reduce dependency on Russia.

EU commissioner Olli Rehn said joining the eurozone marked 'the completion of Latvia's journey back to the political and economic heart of our continent, and that is something for all of us to celebrate'.

The government and most business owners also welcomed the single currency, saying it would improve Latvia's credit rating and attract foreign investors.

'It's a big opportunity for Latvia's economic development,' Prime Minister Valdis Dombrovskis said after symbolically withdrawing a 10-euro note as fireworks led celebrations in the capital Riga after midnight.

The governor of the Latvian central bank, Ilmars Rimsevics, said: 'Euro brings stability and certainty, definitely attracting investment, so new jobs, new taxes and so on. So being in the second largest currency union I think will definitely mean more popularity.'

Latvia, with its large ethnic Russian minority, is often seen as having closer economic ties to Russia than its fellow Baltic States, Lithuania and Estonia. Russia remains an important export market while its banking system attracts substantial deposits from clients in other ex-Soviet states.