1 Amendments of Sylvie GOULARD related to 2013/0190(NLE)
Amendment 6 #
Draft legislative resolution
Paragraph 5
Paragraph 5
5. Notes that in its 2013 Convergence Report the ECB expressed some concerns with regard to the long-term sustainability of Latvia's economic convergence; stresses in particular the following statements and recommendations: - joining a currency union entails foregoing monetary and exchange rate instruments and implies an increased importance of internal flexibility and resilience; the authorities should, therefore, consider avenues to further strengthen the alternative counter-cyclical policy instruments at their disposal, in addition to what has been done since 2009; - Latvia needs to continue along a path of comprehensive fiscal consolidation in line with the requirements of the Stability and Growth Pact, and to implement and to adhere to a fiscal framework that helps to avoid a return to pro-cyclical policies in the future; - both the need for a stronger institutional environment and the fact that the shadow economy, although declining, is estimated to still be relatively large are not only entailing public revenue losses but also distort competition, harm Latvia’s competitiveness and reduce the country’s attractiveness as a destination for foreign direct investment, thus hampering longer- term investment and productivity; - the reliance by a significant part of the banking sector on non-resident deposits as a source of funding, while not a recent phenomenon, is again on the rise and represents an important risk to financial stability and in addition to appropriate micro-prudential policies, it is crucial that a comprehensive policy toolkit is available (inter alia stress tests, deposit insurance scheme, anti-money laundering); considers that those concerns need to be taken seriously but that they do not change the overall positive assessment on the adoption of the euro by Latvia;