Latvia is still one of the poorest countries of Europe and one with large income inequalities. That is the legacy of the Soviet era. But even when Latvia is a land of extremes where 42% of children live at risk of poverty and social exclusion, the state is still able to afford paying 142,000 euros in paternity benefits for one child, and up to 200,000 euros in unemployment benefits. Changes to the law adopted in September will provide a 50% real estate tax discount to large families, but critics argue that Latvian benefits system overall works largely in favor of the wealthy, allowing them to receive huge benefits, while people on small incomes receive minimum benefits. Therefore, they expect their government to emulate some of President Obrama's policies of "taxing the rich"
Latvians hope to join the euro zone in 2014
Nov. 19.─ With the clock ticking until Latvia gets a green light to join the euro zone in 2014, the Baltic state's leaders are pulling out all the stops to demonstrate just how ready it is. But while officialdom is gung-ho, away from the corridors of power the mood is unenthusiastic in this nation of two million, which has emerged from the world's deepest recession and remains locked in an austerity drive.
Polls suggest that ordinary Latvians are far from thrilled about joining the troubled euro zone, even though the centre-right government argues that it makes sense to be anchored in the same currency bloc as key trade partners.
In the small town of Cesis, some 90 kilometres northeast of the capital Riga, even those in industries used to using euros are underwhelmed. In the cosy "2 Locals" cafe on the town square, owner Jolanta Sausina says customers ask regularly if they can spend cash they have brought from neighbouring Estonia, which adopted the euro in 2011 rather than pay in Latvian lats.
"Strictly according to the law we are not allowed to accept euros for cash payments," she said. "We do let them pay in euros if they don't have any lats, but then we have to change the money at the bank and lose money by paying a commission" ...