The European Commission will give Latvia the go-ahead this week to become the 18th member of the Eurozone from the start of next year, European Union officials announced on the 3rd of June.

The EU will publish a report on whether the small Baltic state meets all the criteria for membership of the single currency, which include low inflation and long-term interest rates, a stable exchange rate and low public debt and deficit.

Latvia , which underwent one of Europe’s toughest austerity programmes after the 2008-09 economic crisis, (reducing its GDP by 20% in the process), now meets all the requirements, the Commission will say.

Policymakers hope the accession of Latvia will send a strong signal of confidence to investors that despite three years of a sovereign debt crisis, the Eurozone is set to grow, rather than disintegrate.

Latvia ’s membership will have to get the approval of EU leaders at their summit in late June, and the European Parliament will also have to be consulted, before EU finance ministers make the accession formal in July.

Latvia ’s Baltic neighbour, Lithuania, is likely to become the next Eurozone member in 2015. The third Baltic country, Estonia, joined the Eurozone in 2011.