Latvia adopts the euro

(Vatican Radio) Latvia adopts the euro on January 1 despite public concerns that it will lead to higher prices and that the nation will attract more suspicious money from neighboring Russia and the east. The European Commission has urged Latvian businesses not to abuse the system.

Listen to regional correspondent Stefan Bos' report...

Amid the tensions, a street musician awaited the arrival of euros on New Years Day.

And at nearby open air markets shoppers were confronted with prices printed in euros and lats, which can be exchanged till June 30.

Yet, opinion polls show that a majority of Latvians don't like their country becoming the 18th member of the eurozone.

Pollsters say just one in five Latvians is enthusiastic about the euro. Latvians have expressed concern that prices will rise under the new currency.

In a message to Latvia, even European Commission President Jose Manuel Barroso acknowledged those fears.

"I am aware that many Latvians are still worried about abusive price setting. Preventing irregular price increases and clarifying misperceptions will be very important," Barroso stressed in a televised statement.

"The European Commission takes people's concerns seriously here. We welcome the 'Fair Euro Introducer' initiative, where businesses committed not to misuse the euro adoption for their own profit, to respect the rules and provide the necessary assistance to their clients before and after euro adoption," he added.

Additionally, financial experts have warned that Latvia is likely to see a greater - not smaller - influx of dirty money from Russia and the east, as the Baltic nation will be viewed as safer than other former Soviet states, while financial oversight remains loose.

Yet, Latvia's arrival has given European officials in Brussels an extra reason to toast in the new year.

Eighteen months after the threat of Greece quitting the euro gripped financial markets, the eurozone is marking its 15th anniversary by expanding, not fracturing, claimed Barosso. "Latvia is a new member of the euro area.

This shows that the euro area remains attractive and open to all member states that fulfil the conditions set by the [eurozone] Treaty," he added.

"I am convinced that the new framework for economic governance, as well as progress with building a banking union, will make us better equipped to detect and contain fiscal and financial risks in the future."

He said Latvia will enter the euro area "stronger than ever" after a deep economic crisis. Latvia's Gross Domestic Product is forecast to expand by 4 percent, the highest growth rate in the European Union, according to EU estimates.

Yet, for now, Latvian schools to continue to explain the importance and benefits of the euro to a young generation, and other more sceptical residents.