CHANGEOVER TO EURO IN LATVIA: EXPECTATIONS AND OUTCOMES

During 2011-2015, the three Baltic states, Estonia, Latvia, and Lithuania, joined euro area. It was officially hailed as a great success. On the other hand, public attitude towards the single EU currency has never been unanimous. Promised advantages and more reluctantly admitted potential losses from changeover to euro in the Baltic states were similar to those supposed in other countries. The aim of paper is to verify the most typical expectations concerning effects, both positive and negative, of single currency, in the case of the Baltic states and Latvia in particular. Research methods used include application of economic theory, analysis of statistical data, authors' calculations, and correlation analysis. Authors conclude that neither the most optimistic promises nor the most pessimistic predictions proved true. Introduction of euro in the Baltic states didn't have any essential effect on foreign trade, foreign investment, or overall economic situation. Euro proves to be primarily a political project to enhance the European unity and to tighter bound member states to the EU.