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International Internet Magazine. Baltic States news & analytics Saturday, 24.02.2024, 13:45

SEB: no euro for Lithuania before 2013

Danuta Pavilenene, BC, Vilnius, 08.12.2008.Print version
SEB Bankas analysts believe that the earliest Lithuania could adopt the euro would be 2013 and warned that Lithuania is facing increasing obstacles to joining the single currency, ELTA informed.

"It could appear that 2013 would be a possible date for eurozone entry if public finances were reined in and inflation eased. However, if the financially difficult time continues and if Lithuania's inflation remains above the Maastricht criterion, euro adoption could have to be pushed back to a later date," Nerijus Udrenas, the bank's chief analyst said.


He told commercial attaches in the country that Lithuania, Latvia and Estonia are facing growing Maastricht obstacles on their way to the eurozone.


He cited the average annual HICP inflation in all three Baltic countries in October 2008 was well above the Maastricht criterion of 4.2%, reaching 11% in Lithuania, 15.8% in Latvia, and 10.9% in Estonia.


Lithuania's public sector deficit in 2007 made up 1.2% of GDP. Latvia posted a zero deficit and Estonia recorded a 2.8% surplus. The required threshold is 3%.


Lithuania's long-term interest rate in October was 4.97% and in Latvia, it was 5.9%. Estonia's interest rate, at 7.85%, exceeded the estimated Maastricht limit of 6.33%.


At the moment, all three countries are comfortably meeting the public debt and currency stability criteria. All three national currencies have been pegged to the euro at a fixed rate.

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