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European Commission: Lithuania ready to adopt the euro in 2015

BC, Vilnius, 04.06.2014.Print version
Lithuania has fulfilled all conditions to join the eurozone, the European Commission announced on Wednesday, cites LETA/ELTA, referring to DPA.

Therefore Lithuania will become the 19th member of the euro area on January 1, 2015.

 

The reports note that Lithuania has made a considerable progress by pursuing economic reforms and responsible fiscal policy with a view to seeking membership of the eurozone.

 

The European Commission's convergence report to the European Parliament and the Council stated that the average annual inflation was 0.6% in Lithuania at the end of April, and this was a much lower indicator than the Maastricht criterion of 1.7%.

 

In 2013, the general government deficit-to-GDP ratio amounted to 2.1% (against the criterion of 3.0%), and the ratio of general government debt to GDP was 39.4% (while the criterion, 60%).

 

The average long-term interest rate indicator stood at 3.6%, while the convergence criterion was 6.2%. National legislation has been harmonized with the Treaty, and the litas exchange rate against the euro remains stable.

 

European Commissioner for Economic and Monetary Affairs and the Euro Olli Rehn has announced that the European Commission had submitted a proposal to the Council on Lithuania's joining of the eurozone.

 

Prime Minister Algirdas Butkevicius: "Our joint concerted efforts and consistent work have been noticed and acknowledged. Introduction of the euro is a strategic step of Lithuania, well thought-out economically and politically, and is aimed at a more rapid economic growth and, at the same time, better life for the citizens of our country. Also, in consideration of the situation close to Lithuania's borders, adoption of the euro acquires even greater significance. It is yet another step towards an economic, financial, and political security of our country".

 

"It is symbolic that, having celebrated the 10th anniversary of Lithuania's membership of the European Union, we are close to a new baseline, yet another historic moment in the development of our country: today the European Commission has opened the door for Lithuania to the eurozone", said Minister of Finance Rimantas Sadzius. According to the Minister, Lithuania, as a member of the eurozone, will have greater trust from its foreign partners, which means larger investment, more favourable borrowing, lower unemployment, and growing personal income. "Favourable decision by the European Commission is merely the beginning of our path. We must ensure that the euro is welcomed by our citizens, and its adoption is smooth", said Sadzius.

 

"Today's news from Frankfurt and Brussels is not a surprise: having duly completed our homework, and having pursued constant monitoring of compliance with the convergence criteria, we had expected this result", said Chairman of the Board of the Bank of Lithuania Vitas Vasiliauskas. According to him, conclusions by the EU institutions is a solid affirmation to Europe and the world that Lithuania has independently overcome the economic crisis and has restored its economy, reinforced the banking sector, and laid foundations for the future development. "We have flawlessly completed half of the work, but this is just the beginning", said the Chairman of the Board of the Bank of Lithuania, and stressed that membership of the eurozone and the Banking Union will not automatically provide guarantees, but will open up new opportunities. "To make these opportunities reality, we must abide by the same preconditions: financial prudency, transparency, and discipline", said Vasiliauskas.

 

On 19 June 2014 the finance ministers of the eurozone (the Eurogroup) will discuss Lithuania's joining of the eurozone; on 20 June, the Economic and Financial Affairs Council (ECOFIN) will be held; and on 26-27 June a discussion at the European Council is scheduled to take place. Following a discussion, the European Parliament will announce its opinion in the middle of July.

 

The European Council plans to make the final decision on Lithuania's joining of the eurozone on 23 July.






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