Why did Latvia join the eurozone in 2014, while Lithuania only acceded a year later? The diverging experience is surprising because Latvia suffered a more pronounced economic crisis in 2008-10 which created higher challenges for euro adoption in terms of meeting the fiscal criteria. The paper argues that, while the willingness to adopt the euro increased in both countries during the crisis and the post-crisis years, in Latvia the will to seek euro adoption was stronger, clearer and more consistent. We argue that a satisfactory explanation of the fluctuations of the willingness to adopt the euro cannot be achieved relying on aggregate economic costs and benefits (the degree of satisfaction of optimum currency area criteria), identity and geopolitical considerations, society’s support, and interest group preferences. Instead, it can be traced down to domestic political processes, namely electoral timing and results combined with a different magnitude of crisis’s impact. We also discuss how other scholars should pay more attention to the way that economic crises affect euro adoption prospects and politicians' willingness to seek monetary integration.
