The chapter below is a direct copy of my previously uploaded "new version" (as of 16:19, 14 March 2013) with a later reformulation of the 2nd+3rd+4th "introduction paragraph" into more neutral language on 16 March 2013. The idea is, that this material should either be copied into the Latvian euro coins article as a new "Convergence Status" chapter or into a subarticle (i.e. entitled Latvia and the euro). The appropriateness of displaying monthly data has been questioned at the article's talkpage. This sandbox has been created in order to still have visible content for the purposes of keeping the content visible while debating, and getting the opportunity to adjust the introduction lines ahead of the table, so that it satisfy the minds of the engaged wikipedians in the debate. All editors in the debate are of course allowed to visit this sandbox and upload their own suggestion for how the chapter should be.
Convergence Status edit
The Maastricht Treaty originally required that all members of the European Union join the euro once certain economic criteria are met. In April 2012, when Latvia last time was officially evaluated by ECB, it met 3 out of the 5 criteria. Latvia has announced that they will request that another evaluation be conducted in March 2013.[1] Latvian Prime Minister Valdis Dombrovskis stated in January 2013 that Latvia "are currently fulfilling the Maastricht [euro adoption] criteria with a considerable reserve, therefore I don't see any basis on which this convergence report would be negative."[1]
The table below display an indication for Latvia's convergence status throughout the past year, based on ECB's official assesment method, where calculation of the monthly reference values for HICP inflation and interest rates (since the first values published by the ECB report for April 2012), all have been verified by the Polish Ministry of Finance. According to the table, the first assesment month where Latvia managed to indicate a full compliance with all criteria values was March 2013. Back in December 2012, the Latvian Central Bank claimed the country had fully complied with all convergence criteria since September 2012 (equal to the assement month in October 2012).[2] As the claim by the Latvian Central Bank was based on a different data approach for the fiscal criteria, where they compared "forecasted deficit and debt for the ongoing year (2012)", instead of adopting the ECB methods data approach where fiscal compliance is only judged upon "final deficit and debt data published by Eurostat for the last full calendar year (meaning 2011)", the conclusion from the central bank should however only be considered as being a forecast for what to expect, rather than an indication of how the compliance situation was for the specific month in concern when evaluated strictly according to the data approach as outlined by the published official ECB method.
- Note: According to the official ECB method a compliance towards the fiscal criteria shall always be measured according to whether or not an open ongoing EDP exists for the country (as defined by the EU treaty's art.140 and 126(6) referral to the Protocol on the Excessive Deficit Procedure), meaning that a country need to comply with the fiscal criteria by its official fiscal data (published by the European Commission's statistical agency Eurostat) for the last full calendar year. As Latvia did not comply with the deficit criteria by its published 2011 fiscal data, their EDP was not abrogated throughout 2012,[3] and thus the country did not comply with the euro adoption deficit criteria throughout 2012. It shall be noted that the European Commission's latest economic forecast,[4] indicate that Latvia's EDP will be abrogated shortly after Eurostat publish the country's official deficit and debt data for fiscal year 2012, which according to the release calendar will happen on 22 April 2013.[5]
According to the previously published "ECB method" being applied by the data table below (with the monthly reference values verified by the Polish Ministry of Finance), Latvia has indicated a full compliance with all Maastricht criteria since the data month February 2013, understood as being since the "assessment month" March 2013. The official confirmation about Latvia's potential compliance with all five criteria, will however only be known when published by the ordered ECB convergence report, which currently await Eurostat's publication of Latvia's finally recorded 2012 fiscal data on 22 April 2013.
| Assessment month | Country | HICP inflation rate[6][nb 1] | Excessive deficit procedure[7] | Exchange rate | Long-term interest rate[8][nb 2] | Compatibility of legislation | ||
|---|---|---|---|---|---|---|---|---|
| Budget deficit to GDP[9] | Debt-to-GDP ratio[10] | ERM II member[11] | Change in rate[12][13][nb 3] | |||||
| 2012 ECB Report[nb 4] | Reference values | Max. 3.1%[nb 5] (as of 31 Mar 2012) |
None open (as of 31 March 2012) | Min. 2 years (as of 31 Mar 2012) |
Max. ±15%[nb 6] (for 2011) |
Max. 5.80%[nb 7] (as of 31 Mar 2012) |
Yes[14][15] (as of 31 Mar 2012) | |
| Max. 3.0% (Fiscal year 2011)[16] |
Max. 60% (Fiscal year 2011)[16] | |||||||
 Latvia
|
4.1% | Open | 6 years, 11 months | 0.3% | 5.77% | No | ||
| 3.5% | 42.6% | |||||||
| May 2012 | Reference values | max. 3.1%[17][nb 8][nb 9] (as of 30 Apr 2012) |
max. 3.0% (Fiscal year 2011)[nb 10] |
max. 60%, or declining (Fiscal year 2011)[nb 10] |
min. 2 years (as of 30 Apr 2012) |
max. 5.77%[17][nb 8][nb 11] (as of 30 Apr 2012) | ||
| Latvia | 4.0% | 3.5% | 42.6% | 2 May 2005 | 5.65% | |||
| June 2012 | Reference values | max. 3.1%[19][nb 12][nb 13] (as of 31 May 2012) |
max. 3.0% (Fiscal year 2011)[nb 10] |
max. 60%, or declining (Fiscal year 2011)[nb 10] |
min. 2 years (as of 31 May 2012) |
max. 3.98%[19][nb 12][nb 14] (as of 31 May 2012) | ||
| Latvia | 3.7% | 3.5% | 42.6% | 2 May 2005 | 5.55% | |||
| July 2012 | Reference values | max. 3.0%[20][nb 15][nb 16] (as of 30 Jun 2012) |
max. 3.0% (Fiscal year 2011)[nb 10] |
max. 60%, or declining (Fiscal year 2011)[nb 10] |
min. 2 years (as of 30 Jun 2012) |
max. 3.86%[20][nb 15][nb 17] (as of 30 Jun 2012) | ||
| Latvia | 3.5% | 3.5% | 42.6% | 2 May 2005 | 5.48% | |||
| August 2012 | Reference values | max. 3.0%[21][nb 18][nb 19] (as of 31 Jul 2012) |
max. 3.0% (Fiscal year 2011)[nb 10] |
max. 60%, or declining (Fiscal year 2011)[nb 10] |
min. 2 years (as of 31 Jul 2012) |
max. 3.74%[21][nb 18][nb 20] (as of 31 Jul 2012) | ||
| Latvia | 3.3% | 3.5% | 42.6% | 2 May 2005 | 5.40% | |||
| September 2012 | Reference values | max. 3.0%[22][nb 21][nb 22] (as of 31 Aug 2012) |
max. 3.0% (Fiscal year 2011)[nb 10] |
max. 60%, or declining (Fiscal year 2011)[nb 10] |
min. 2 years (as of 31 Aug 2012) |
max. 3.68%[22][nb 21][nb 23] (as of 31 Aug 2012) | ||
| Latvia | 3.1% | 3.5% | 42.6% | 2 May 2005 | 5.31% | |||
| October 2012 | Reference values | max. 3.0%[23][nb 24][nb 25] (as of 30 Sep 2012) |
max. 3.0% (Fiscal year 2011)[nb 10] |
max. 60%, or declining (Fiscal year 2011)[nb 10] |
min. 2 years (as of 30 Sep 2012) |
max. 3.66%[23][nb 24][nb 26] (as of 30 Sep 2012) | ||
| Latvia | 2.9% | 3.5% | 42.6% | 2 May 2005 | 5.17% | |||
| November 2012 | Reference values | max. 2.9%[24][nb 27][nb 28] (as of 31 Oct 2012) |
max. 3.0% (Fiscal year 2011)[nb 29] |
max. 60%, or declining (Fiscal year 2011)[nb 29] |
min. 2 years (as of 31 Oct 2012) |
max. 3.63%[24][nb 27][nb 30] (as of 31 Oct 2012) | ||
| Latvia | 2.7% | 3.4% | 42.2% | 2 May 2005 | 4.99% | |||
| December 2012 | Reference values | max. 2.8%[26][nb 31][nb 32] (as of 30 Nov 2012) |
max. 3.0% (Fiscal year 2011)[nb 29] |
max. 60%, or declining (Fiscal year 2011)[nb 29] |
min. 2 years (as of 30 Nov 2012) |
max. 3.61%[26][nb 31][nb 33] (as of 30 Nov 2012) | ||
| Latvia | 2.5% | 3.4% | 42.2% | 2 May 2005 | 4.79% | |||
| January 2013 | Reference values | max. 2.8%[27][nb 34][nb 35] (as of 31 Dec 2012) |
max. 3.0% (Forecast of fiscal year 2012)[nb 36] |
max. 60%, or declining (Forecast of fiscal year 2012)[nb 36] |
min. 2 years (as of 31 Dec 2012) |
max. 3.59%[27][nb 34][nb 37] (as of 31 Dec 2012) | ||
| Latvia | 2.3% | 1.7% | 41.9% | 2 May 2005 | 4.57% | |||
| February 2013 | Reference values | max. 2.7%[28][nb 38][nb 39] (as of 31 Jan 2013) |
max. 3.0% (Forecast of fiscal year 2012)[nb 40] |
max. 60%, or declining (Forecast of fiscal year 2012)[nb 40] |
min. 2 years (as of 31 Jan 2013) |
max. 3.60%[27][nb 34][nb 41] (as of 31 Jan 2013) | ||
| Latvia | 2.0% | 1.5% | 41.9% | 2 May 2005 | 4.35% | |||
| 2022 ECB Report[nb 42] | Reference values | Max. 4.9%[nb 43] (as of April 2022) |
None open (as of 25 May 2022) | Min. 2 years | Max. ±15%[nb 6] (for 2021) |
Max. 2.6%[nb 43] (as of April 2022) |
Yes[29][30] (as of 25 March 2022) | |
| Max. 3.0% (Fiscal year 2021)[29] |
Max. 60% (Fiscal year 2021)[29] | |||||||
Criterion fulfilled
Criterion potentially fulfilled: If the budget deficit exceeds the 3% limit, but is "close" to this value (the European Commission has deemed 3.5% to be close by in the past),[31] then the criteria can still potentially be fulfilled if either the deficits in the previous two years are significantly declining towards the 3% limit, or if the excessive deficit is the result of exceptional circumstances which are temporary in nature (i.e. one-off expenditures triggered by a significant economic downturn, or by the implementation of economic reforms that are expected to deliver a significant positive impact on the government's future fiscal budgets). However, even if such "special circumstances" are found to exist, additional criteria must also be met to comply with the fiscal budget criterion.[32][33] Additionally, if the debt-to-GDP ratio exceeds 60% but is "sufficiently diminishing and approaching the reference value at a satisfactory pace" it can be deemed to be in compliance.[33]
Criterion not fulfilled
- Notes
- ^ The rate of increase of the 12-month average HICP over the prior 12-month average must be no more than 1.5% larger than the unweighted arithmetic average of the similar HICP inflation rates in the 3 EU member states with the lowest HICP inflation. If any of these 3 states have a HICP rate significantly below the similarly averaged HICP rate for the eurozone (which according to ECB practice means more than 2% below), and if this low HICP rate has been primarily caused by exceptional circumstances (i.e. severe wage cuts or a strong recession), then such a state is not included in the calculation of the reference value and is replaced by the EU state with the fourth lowest HICP rate.
- ^ The arithmetic average of the annual yield of 10-year government bonds as of the end of the past 12 months must be no more than 2.0% larger than the unweighted arithmetic average of the bond yields in the 3 EU member states with the lowest HICP inflation. If any of these states have bond yields which are significantly larger than the similarly averaged yield for the eurozone (which according to previous ECB reports means more than 2% above) and at the same time does not have complete funding access to financial markets (which is the case for as long as a government receives bailout funds), then such a state is not be included in the calculation of the reference value.
- ^ The change in the annual average exchange rate against the euro.
- ^ Reference values from the ECB convergence report of May 2012.[14]
- ^ Sweden, Ireland and Slovenia were the reference states.[14]
- ^ a b The maximum allowed change in rate is ± 2.25% for Denmark.
- ^ Sweden and Slovenia were the reference states, with Ireland excluded as an outlier.[14]
- ^ a b The reference values for HICP inflation and long-term interest rates are calculated based on the "calculation principle" outlined in the 2012 ECB Convergence Report,[18] with the input of forecasted data for the sliding assessment year 1 May 2011 - 30 April 2012.
- ^ The 3 best performing countries in regards to HICP inflation were Sweden (1.2%), Ireland (1.5%) and Slovenia (2.2%), with no outliers detected.
- ^ a b c d e f g h i j k l These values are final recorded data - as reported by the European Commission's Spring 2012 Economic Forecast report.[16] Cite error: The named reference "2011 fiscal data from the May 2012 report" was defined multiple times with different content (see the help page).
- ^ As Ireland (4.46% above average) is part of a bailout program, and at the same time also suffered from elevated interest rates "significantly above" the eurozone average (meaning they were more than 2.0% higher), this country was excluded from the calculation of the reference limit for "long term interest rates" leaving the benchmark calculated on basis of Sweden (with a 12m-average interest rate of 2.11%) and Slovenia (with a 12m-average interest rate of 5.42%).
- ^ a b The reference values for HICP inflation and long-term interest rates are calculated based on the "calculation principle" outlined in the 2012 ECB Convergence Report,[18] with the input of forecasted data for the sliding assessment year 1 June 2011 - 31 May 2012.
- ^ The 3 best performing countries in regards to HICP inflation were Sweden (1.1%), Ireland (1.5%) and Greece (2.1%), with no outliers detected.
- ^ As Greece (16.13% above average) and Ireland (4.19% above average) are both part of a bailout program, and both suffered from elevated interest rates "significantly above" the eurozone average (meaning they were more than 2.0% higher), these two countries were excluded from the calculation of the reference limit for "long term interest rates" leaving just Sweden (with a 12m-average interest rate of 1.98%) as a benchmark country.
- ^ a b The reference values for HICP inflation and long-term interest rates are calculated based on the "calculation principle" outlined in the 2012 ECB Convergence Report,[18] with the input of forecasted data for the sliding assessment year 1 July 2011 - 30 June 2012.
- ^ The 3 best performing countries in regards to HICP inflation were Sweden (1.1%), Ireland (1.6%) and Greece (1.9%), with no outliers detected.
- ^ As Greece (17.08% above average) and Ireland (3.84% above average) are both part of a bailout program, and both suffered from elevated interest rates "significantly above" the eurozone average (meaning they were more than 2.0% higher), these two countries were excluded from the calculation of the reference limit for "long term interest rates" leaving just Sweden (with a 12m-average interest rate of 1.86%) as a benchmark country.
- ^ a b The reference values for HICP inflation and long-term interest rates are calculated based on the "calculation principle" outlined in the 2012 ECB Convergence Report,[18] with the input of forecasted data for the sliding assessment year 1 August 2011 - 31 July 2012.
- ^ The 3 best performing countries in regards to HICP inflation were Sweden (1.0%), Ireland (1.6%) and Greece (1.8%), with no outliers detected.
- ^ As Greece (17.92% above average) and Ireland (3.36% above average) are both part of a bailout program, and both suffered from elevated interest rates "significantly above" the eurozone average (meaning they were more than 2.0% higher), these two countries were excluded from the calculation of the reference limit for "long term interest rates" leaving just Sweden (with a 12m-average interest rate of 1.74%) as a benchmark country.
- ^ a b The reference values for HICP inflation and long-term interest rates are calculated based on the "calculation principle" outlined in the 2012 ECB Convergence Report,[18] with the input of forecasted data for the sliding assessment year 1 September 2011 - 31 August 2012.
- ^ The 3 best performing countries in regards to HICP inflation were Sweden (1.0%), Ireland (1.8%) and Greece (1.8%), with no outliers detected.
- ^ As Greece (18.64% above average) and Ireland (3.06% above average) are both part of a bailout program, and both suffered from elevated interest rates "significantly above" the eurozone average (meaning they were more than 2.0% higher), these two countries were excluded from the calculation of the reference limit for "long term interest rates" leaving just Sweden (with a 12m-average interest rate of 1.68%) as a benchmark country.
- ^ a b The reference values for HICP inflation and long-term interest rates are calculated based on the "calculation principle" outlined in the 2012 ECB Convergence Report,[18] with the input of forecasted data for the sliding assessment year 1 October 2011 - 30 September 2012.
- ^ The 3 best performing countries in regards to HICP inflation were Sweden (0.9%), Greece (1.6%) and Ireland (1.9%), with no outliers detected.
- ^ As Greece (18.92% above average) and Ireland (2.81% above average) are both part of a bailout program, and both suffered from elevated interest rates "significantly above" the eurozone average (meaning they were more than 2.0% higher), these two countries were excluded from the calculation of the reference limit for "long term interest rates" leaving just Sweden (with a 12m-average interest rate of 1.66%) as a benchmark country.
- ^ a b The reference values for HICP inflation and long-term interest rates are calculated based on the "calculation principle" outlined in the 2012 ECB Convergence Report,[18] with the input of forecasted data for the sliding assessment year 1 November 2011 - 31 October 2012.
- ^ The 3 best performing countries in regards to HICP inflation were Sweden (0.9%), Greece (1.4%) and Ireland (1.9%), with no outliers detected.
- ^ a b c d These values are final recorded data - as reported by the European Commission's Autumn 2012 Economic Forecast report.[25] Cite error: The named reference "2011 fiscal data from the Nov 2012 report" was defined multiple times with different content (see the help page).
- ^ As Greece (18.97% above average) and Ireland (2.59% above average) are both part of a bailout program, and both suffered from elevated interest rates "significantly above" the eurozone average (meaning they were more than 2.0% higher), these two countries were excluded from the calculation of the reference limit for "long term interest rates" leaving just Sweden (with a 12m-average interest rate of 1.63%) as a benchmark country.
- ^ a b The reference values for HICP inflation and long-term interest rates are calculated based on the "calculation principle" outlined in the 2012 ECB Convergence Report,[18] with the input of forecasted data for the sliding assessment year 1 December 2011 - 30 November 2012.
- ^ The 3 best performing countries in regards to HICP inflation were Sweden (0.9%), Greece (1.2%) and Ireland (1.9%), with no outliers detected.
- ^ As Greece (19.01% above average) and Ireland (2.37% above average) are both part of a bailout program, and both suffered from elevated interest rates "significantly above" the eurozone average (meaning they were more than 2.0% higher), these two countries were excluded from the calculation of the reference limit for "long term interest rates" leaving just Sweden (with a 12m-average interest rate of 1.61%) as a benchmark country.
- ^ a b c The reference values for HICP inflation and long-term interest rates are calculated based on the "calculation principle" outlined in the 2012 ECB Convergence Report,[18] with the input of forecasted data for the sliding assessment year 1 January 2012 - 31 December 2012.
- ^ The 3 best performing countries in regards to HICP inflation were Sweden (0.94%), Greece (1.04%) and Ireland (1.92%), with no outliers detected.
- ^ a b These values are forecasts from the Autumn 2012 Economic Forecast of the European Commission.[25]
- ^ As Greece (18.48% above average) and Ireland (2.15% above average) are both part of a bailout program, and both suffered from elevated interest rates "significantly above" the eurozone average (meaning they were more than 2.0% higher), these two countries were excluded from the calculation of the reference limit for "long term interest rates" leaving just Sweden (with a 12m-average interest rate of 1.59%) as a benchmark country.
- ^ The reference values for HICP inflation and long-term interest rates are calculated based on the "calculation principle" outlined in the 2012 ECB Convergence Report,[18] with the input of forecasted data for the sliding assessment year 1 February 2012 - 31 January 2013.
- ^ The 3 best performing countries in regards to HICP inflation were Sweden (0.87%), Greece (0.93%) and Ireland (1.94%), with no outliers detected.
- ^ a b These values are forecasts from the Winter 2013 Economic Forecast of the European Commission.[4]
- ^ As Greece (17.37% above average) and Ireland (1.99% above average) are both part of a bailout program, and both suffered from elevated interest rates "significantly above" the eurozone average (meaning they after a rounding of the values were equal to or above the 2.0% outlier limit), these two countries were therefore excluded from the calculation of the reference limit for "long term interest rates" leaving just Sweden (with a 12m-average interest rate of 1.60%) as a benchmark country.
- ^ Reference values from the Convergence Report of June 2022.[29]
- ^ a b France, Finland, and Greece were the reference states.[29]
References edit
- ^ a b "Latvian parliament paves way to euro switch". EurActiv. 2013-02-01. Retrieved 2013-02-03.
- ^ "Republic of Latvia Investor Presentation (December 2012)" (PDF). National Bank of Latvia. December 2012. Retrieved 12 March 2013.
- ^ "Excessive deficit procedure for Latvia". European Commission (Economic and Financial Affairs). 4 October 2011. Retrieved 12 March 2013.
- ^ a b "European economic forecast - winter 2013". European Commission. 22 February 2013. Retrieved 22 February 2013. Cite error: The named reference "EC-winter-forecast 2013" was defined multiple times with different content (see the help page).
- ^ "Release Calendar for Euro Indicators". Eurostat. Retrieved 18 December 2012.
- ^ "HICP (2005=100): Monthly data (12-month average rate of annual change)". Eurostat. 16 August 2012. Retrieved 14 March 2024.
- ^ "The corrective arm/ Excessive Deficit Procedure". European Commission. Retrieved 14 March 2024.
- ^ "Long-term interest rate statistics for EU Member States (monthly data for the average of the past year)". Eurostat. Retrieved 18 December 2012.
- ^ "Government deficit/surplus data". Eurostat. 22 April 2013. Retrieved 22 April 2013.
- ^ "General government gross debt (EDP concept), consolidated - annual data". Eurostat. Retrieved 2018-06-02.
- ^ "ERM II – the EU's Exchange Rate Mechanism". European Commission. Retrieved 14 March 2024.
- ^ "Euro/ECU exchange rates - annual data". Eurostat. Retrieved 14 March 2024.
- ^ "Former euro area national currencies vs. euro/ECU - annual data". Eurostat. Retrieved 14 March 2024.
- ^ a b c d "Convergence Report May 2012" (PDF). European Central Bank. May 2012. Retrieved 2013-01-20.
- ^ "Convergence Report - 2012" (PDF). European Commission. March 2012. Retrieved 2014-09-26.
- ^ a b c d e f g h "European economic forecast - spring 2012" (PDF). European Commission. 1 May 2012. Retrieved 1 September 2012. Cite error: The named reference "EC Spring Forecast 2012" was defined multiple times with different content (see the help page).
- ^ a b ECB reference values as per 30 Apr 2012
- ^ a b c d e f g h i j "Convergence report 2012" (PDF). European Central Bank. May 2012. Retrieved 2013-01-15.
- ^ a b ECB reference values as per 31 May 2012
- ^ a b ECB reference values as per 30 Jun 2012
- ^ a b ECB reference values as per 31 Jul 2012
- ^ a b ECB reference values as per 31 Aug 2012
- ^ a b ECB reference values as per 30 Sep 2012
- ^ a b ECB reference values as per 31 Oct 2012
- ^ a b c "European economic forecast - autumn 2012" (PDF). European Commission. 7 November 2012. Retrieved 7 November 2012. Cite error: The named reference "EC-autumn-forecast 2012" was defined multiple times with different content (see the help page).
- ^ a b ECB reference values as per 30 Nov 2012
- ^ a b c ECB reference values as per 31 Dec 2012
- ^ ECB reference values as per 31 Jan 2012
- ^ a b c d e "Convergence Report June 2022" (PDF). European Central Bank. 2022-06-01. Retrieved 2022-06-01.
- ^ "Convergence Report 2022" (PDF). European Commission. 2022-06-01. Retrieved 2024-03-14.
- ^ "Luxembourg Report prepared in accordance with Article 126(3) of the Treaty" (PDF). European Commission. 12 May 2010. Retrieved 18 November 2012.
- ^ "EMI Annual Report 1994" (PDF). European Monetary Institute (EMI). April 1995. Retrieved 22 November 2012.
- ^ a b "Progress towards convergence - November 1995 (report prepared in accordance with article 7 of the EMI statute)" (PDF). European Monetary Institute (EMI). November 1995. Retrieved 22 November 2012.