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Lat is a surrogate euro - Rungainis

Girts Rungainis. Photo: Evija Trifanova/LETA.
 RIGA, Dec 27 - The lat is a wonderful currency, the coin design is beautiful and the lat is better protected than the euro; the lat is Latvia's nostalgia and pride - however, in economic and monetary terms, the lat is a surrogate euro with all the disadvantages - but not all the advantages - of the euro, investment banking company "Prudentia" partner Girts Rungainis says in an interview with the business magazine "Kapitals".

Rungainis points out that if Latvians are not ready to live with the lat as a free floating currency and all consequences arising from it - instability, considerable fluctuations, higher interest rates and state debt servicing costs, investment and savings risks, currency exchange costs, smaller deposit guarantees, a less stable and creditworthy banking system - it is necessary to go all the way and introduce the euro not only "de facto", but also "de iure".

Rungainis explains that the euro is not convenient for Latvia and does not correspond to the country's economic development strategy. When Latvia will adopt the euro, it will have to introduce an administrative regulatory mechanism to reduce the risks of economic overheating in the future and several support mechanisms to improve the manufacturing sector's export capacity and replacing imports with locally-produced goods.

As reported, Latvia is planning to adopt the euro on January 1, 2014.
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