Latvian lawmakers passed legislation that allows the Baltic country to apply for euro-region membership starting next year.
The legislature, based in the capital, Riga, voted 52-40 today to pass the euro-adoption law in its second and final reading, according to its website.
Latvia, which exited a 7.5 billion-euro ($10.2 billion) bailout last year, is vying to follow neighboring Estonia by becoming the 18th euro-area member in 2014 and meets all of the European Union’s criteria to join, Prime Minister Valdis Dombrovskis told Parliament today before the vote. The government will submit its application to adopt the euro in February or March, he said last week in an interview.
“The passing of the bill is a further positive for Latvian credit, as the country is now one step close to euro accession in 2014,” Mohammed Kazmi, a London-based analyst at Royal Bank of Scotland Plc, said by e-mail. “We expect the government to now push for an extraordinary convergence report from the European Commission so that the process for joining the euro zone can formally begin.”
The yield on Latvia’s $1.25 billion bond due 2020 rose 1 basis point after the vote to 3.024 percent as of 12:26 p.m. in Riga.
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