Economy

Lithuania ready to become 19th country to join euro zone

European Commission says former Soviet republic meets economic criteria

Vice-president of the European Commission responsible for Economic and Monetary Affairs and the Euro Olli Rehn gives a statement on the proposal for Lithuania to join Euro zone in 2015 at the EU commission headquarters in Brussels, today. Lithuania has fulfilled all conditions to join the eurozone, the European Commission said, recommending that the country become the currency bloc’s 19th member on January 1st. Lithuania would be the last Baltic nation to adopt the euro, after Estonia did so in 2011 and Latvia followed suit at the beginning of this year. Photograph: Stephanie LeCocq/EPA

Wed Jun 4 2014 - 13:58

Lithuania should become the 19th country to use the euro, the European Commission said, paving the way for the Baltic state to join the currency bloc on January 1st.

The former Soviet republic, the only nation to have been turned down for euro-area membership, now meets the economic criteria to join the monetary union, according to the commission, the European Union’s executive arm. “Euro adoption will be a major, hard-earned and well- deserved achievement for Lithuania and its people,” EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels today. “European integration has been and must remain the powerful driving force for stabilization, democracy and increased prosperity.”

Lithuania, whose bid to adopt the common currency was rejected eight years ago, completes a clean sweep for the Baltic region, with neighbors Estonia and Latvia switching in 2011 and 2014. The move comes as the region is battling to restore growth, counter low inflation and reduce unemployment. The euro changed little against the dollar after today’s announcement, and was trading at $1.3613 at 12:33 p.m. in Brussels, down 0.1 per cent on the day.

“The euro adoption is an economically and politically measured strategic step by Lithuania aiming at more rapid economic growth, and also a better life for all the residents of the country,” Prime Minister Algirdas Butkevicius said.

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Today’s official recommendation by the commission, after consultation with the European Central Bank, needs the EU’s national ministers to make a formal decision next month after leaders discuss the issue at a summit on June 26-27. “The news received today from Frankfurt and Brussels is not a surprise,” Lithuanian central bank Governor Vitas Vasiliauskas said. “Having done our homework responsibly, and after regular monitoring of our compliance with the convergence criteria, we expected exactly such an assessment.” Lithuania is fully prepared to abandon the litas in favor of the euro, according to Vasiliauskas.

Bloomberg

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