Analytics, Baltic Export, EU – Baltic States, Financial Services, Lithuania

"A surgery is needed to treat this disease – strong political will and effective structural reforms. Meanwhile, quantitative easing will act as painkillers, allowing to forget about the disease for some time," DNB analysts say.

"Falling euro is currently particularly beneficial to Lithuanian exporters who find themselves at a crossroads. After the Russian market fenced itself off by embargo and as Russia's economy is balancing on the brink of recession, exporters are actively trying to enter new markets for their goods and services. Cheap local currency is an advantage, because of this Lithuanian goods become relatively more attractive in non-euro countries. Secondly, expansionary ECB monetary policy means that interest rates will remain low for a long time. It is very beneficial to those who have taken loans," says DNB's Chief Analyst Indre Genyte-Pikciene.

According to her, fears that this might lead to another credit bubble are dispelled by cautious behaviour of both people and banks, while credit portfolios are not increasing in essence.

Moreover, it is likely that the ECB's quantitative easing will energise crucial Lithuania's export partners in the EU: Germany, the neighbouring countries and Finland. It is likely that the central banks of Sweden and Poland will follow the ECB's example and will not allow their currencies to become stronger against the euro. This will consolidate the Lithuania's export demand in these markets.