Tuesday

25th Apr 2017

Lithuania expresses 'will' to join euro in 2015

Lithuania is determined to become the 19th member of the eurozone in 2015, the country's finance minister confirmed on Tuesday (28 January.

"We have expressed our will to be in the eurozone," finance minister Rimantas Sadzius told reporters before the start of a meeting of EU finance ministers in Brussels.

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The meeting was the first under the Greek government's six month EU presidency.

"I think that it is symbolic that Greece, which encounters certain problems in its development, is challenged with a successful EU presidency and Lithuania shows also the sign that the eurozone has a perspective..that this is a very good project and we subscribe to it," Sadzius added.

The Baltic country became the first and only country to be rejected for euro membership in 2006 after missing the target inflation rate and has since seen its neighbours Estonia and Latvia join the currency bloc in 2011 and 2014 respectively.

But the Baltic country also views membership of the currency bloc as a politically symbolic move just two decades after achieving independence from Russia.

Earlier this month, prime minister Algirdas Butkevicius stated that he would resign if his country did not join the single currency at the start of 2015.

For his part, economic affairs commissioner Olli Rehn said "Lithuania aims at following the path of its neighbours during the Greek presidency."

Eurogroup chair Jeroen Dijsselbloem commented that Lithuania was "very determined" to join the euro in 2015.

The country's finances are in good enough shape to suggest that it will encounter few problems in its accession bid.

The Lithuanian economy grew by 3.4 percent in 2013 and is expected to reach a similar rate this year.

Closer attention will likely be paid to the country's budget deficit, which is expected to fall to 2.5 percent in 2014 from 3 percent in 2013, the highest figure allowed under the EU's stability and growth pact.

Its government debt burden stands at 40 percent, well below the 60 percent threshold.

Meanwhile, the country's banking sector is small by EU standards and, unlike neighbouring Latvia, has not been a target for foreign savers, particularly from Russia and Ukraine.

The final decision on Lithuania's euro bid will be taken by governments in July.

Reports by the European Central Bank and Commission assessing the country's economic readiness to join are to be published at the beginning of June.

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A day after the European Commission rejected Lithuania's bid to join the eurozone, fresh data shows the country would reach the allowed rate of inflation. But Brussels is sticking to its opinion, arguing the country's price stability is not "durable."

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