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Latvia PM worried by euro zone expansion delay talk

Published 05/10/2010, 08:00 AM
Updated 05/10/2010, 08:04 AM

BRUSSELS, May 10 (Reuters) - Latvian Prime Minister Valdis Dombrovskis voiced concern on Monday that any enlargement of the euro zone could be put on the backburner due to the financial woes of Greece which have sparked tensions in the currency area.

"What we are somewhat concerned about is this kind of simmering discussions that one should postpone enlargement of the euro zone..." Dombrovskis told Reuters on the sidelines of a World Economic Forum conference.

He did not elaborate who discussed a possible delay, but some EU diplomats have said privately Greece's persistence in breaching the euro zone's fiscal rules, which put the currency area on the brink of a sovereign crisis, has made some governments wary of adding more members to the euro club.

Latvia, which joined the European Union in 2004, hopes to adopt the euro in 2014. To do so, it must meet strict "Maastricht" criteria on the budget deficit, interest rates, inflation and currency stability.

Dombrovskis said the criteria were good, but the euro zone should strengthen their implementation to prevent the repeat of the Greek debt crisis.

"The real problem is that more of the euro zone countries were not following Maastricht criteria and I think that is a problem that needs to be addressed through some control mechanism," he said.

Deputy Serbian Prime Ministrer Bozidar Djelic, also present, said the current crisis would make the EU more rigorous in assessing whether candidate countries are ready to join the bloc and. It may will also be less generous in aiding the candidates.

"Europe will become more demanding on every member and aspiring members and that is just fine," he told Reuters.

"The solidarity will be less forthcoming but at the same time it is important to keep the unity of the European continent."

Serbia hopes to begin EU entry talks in the next few years.

(Reporing by Marine Haas, writing by Marcin Grajewski; Editing by Ron Askew)

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