Monday

25th Jun 2018

Lithuania set to join eurozone in 2015

  • Vilnius - Lithuania will be the last of the three Baltic states to join the single currency (Photo: FromTheNorth)

Lithuania is set to become the nineteenth member of the eurozone after the European Commission gave its membership bid the green light.

"Lithuania is ready to adopt the euro on 1st Jan 2015," confirmed the bloc's eurozone commissioner Olli Rehn on Wednesday as he published the commission's annual convergence report which assesses eight member states' readiness to join the single currency.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

The commission's recommendation now goes to EU governments who are expected to take the final decision on Lithuania's application in the second half of July.

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.

However, with Lithuania meeting the euro's criteria on its public finances, interest and inflation rates, as well as its exchange rate, its second application is likely to be rubber-stamped, completing what Rehn described as "a Baltic full house in the euro area".

For its part, the European Central Bank also backed Lithuania's bid, although it warned that maintaining the country's low inflation rate “will be challenging in the medium term”.

The positive reports were immediately welcomed by Lithuanian prime minister Algirdas Butkevicius, who has stated that he would resign if his country did not join the single currency at the start of 2015.

“Lithuania worked hard, made every effort and passed the exam successfully,” he told reporters on Wednesday.

In a reference to the EU's ongoing stand-off with Russia over Ukraine, which borders Lithuania, Butkevicius commented that “euro adoption, given the geopolitical situation that formed near the borders of Lithuania, acquires still greater importance. It is one more step towards the deeper economic, financial and political national security.”

The Lithuanian economy grew by 3.4 percent in 2013 and is expected to reach a similar rate this year, while the country's budget deficit 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.

At 40 percent its government debt level is also well below the EU's 60 percent threshold.

But Lithuania is likely to be the last country to join the euro for a number of years.

The UK and Denmark both have opt-outs from the currency in their EU membership terms. Meanwhile, of the seven remaining EU countries - all of whom joined the bloc in 2004 - only Romania has set a target date for joining the euro, with 2019 its planned accession date.

Rehn conceded that the non-euro countries had made "uneven progress," arguing that the currency, which was seemingly on the verge of break-up in 2011, offered "a number of benefits to all countries outside the eurozone".

Opinion

Progressive CAP alternative only hope for sustainability

We see the new CAP as spelling the death of rural communities, the acceleration of the rural exodus, the consolidation of big agribusinesses, jeopardising public health standards and turning binding climate change targets into optional goals for member states.

Greece and creditors proclaim 'end of crisis'

After late-night talks, the Eurogroup agreed on a €15bn disbursement and debt relief measures for Greece, while setting out a tight monitoring when the bailout ends in August.

News in Brief

  1. EP civil liberties committee votes for Article 7 on Hungary
  2. Report blames 2017 egg scare on lax EU enforcement
  3. Nine countries to sign up for Macron's military initiative
  4. Re-elected Erdogan potentially in power until 2028
  5. Macron's popularity drops among French pensioners
  6. Tajani calls for €6bn investment to halt migration
  7. Major demo in London for second EU referendum
  8. Venice Commission: Hungary should repeal NGO law

Stakeholders' Highlights

  1. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  2. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  3. Macedonian Human Rights MovementMHRMI Launches Lawsuits Against Individuals and Countries Involved in Changing Macedonia's Name
  4. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  5. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  6. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  7. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  8. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  9. Mission of China to the EUChina: Work Together for a Better Globalisation
  10. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  11. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  12. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform

Latest News

  1. Progressive CAP alternative only hope for sustainability
  2. Ponytailed green MEP joins 'the other side of the table'
  3. EU leaders still in search of migration plan
  4. Migration row at centre of EU summit This Week
  5. Merkel's woes cast shadow on EU's future
  6. Europe's tech race - trying to keep pace with US and China
  7. Merkel and Juncker's mini-summit risks fiasco
  8. Greece and creditors proclaim 'end of crisis'

Join EUobserver

Support quality EU news

Join us