U.S. Markets closed

Europe's bank chief hails Latvia as 'role model'

RIGA, Latvia (AP) -- The European Union's central bank president has praised Latvia as a "role model" for economic reform just months before the tiny Baltic nation adopts the euro currency.

Mario Draghi said Thursday that Latvia's success in healing its economic woes "in a relatively short period of time" should be an example to other European countries struggling to correct imbalances such as bloated public sector spending.

Latvia suffered one of Europe's worst recessions starting in 2008, with economic output declining by nearly a quarter over the next three years.

Rather than devalue its currency, the government responded by slashing expenditure and raising taxes in an effort to increase competitiveness. Latvia now boasts the fastest growing economy in the 28-member EU.

The country will become the eurozone's 18th member on Jan. 1.