Today’s convergence report by the EC, which gave the green light to Latvia to join the euro-zone in 2014, is likely to lead to further suggestions that Latvia serves as a role model of “internal devaluation” for the euro-zone periphery. However, it is still unclear whether Latvia’s adjustment has been completed. And even if that is the case, there are good reasons why it may not provide a model for the euro-zone’s crisis-hit periphery to follow.
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