Government to make final push for euro

  • 2006-04-26
  • Staff and wire reports
VILNIUS - The government announced it intended to make a last-ditch attempt to convince Brussels that the country complies with the Maastricht criteria and is prepared to adopt the euro on Jan. 1, 2007. The government said it would send a letter to European Commission President Jose Manuel Barroso with an official position on the country's preparedness to introduce the common currency in nine months' time.

Finance Minister Zigmantas Balcytis said the final letter would be approved on April 26.
"Lithuania has been in the ERM II for two years and complies with all Maastricht criteria, including public debt and fiscal deficit. We may comply with the inflation criterion if the rounding procedure applied in arithmetic and algebra 's i.e., the one that ensures the least error is applied," the minister noted.
The appeal comes just after the promulgation of the latest batch of inflation data for EU members, which analysts said ruined Lithuania's hopes to adopt the euro next year.
The Maastricht reference rate stood at 2.6 percent at the end of March, some 0.1 percentage point below Lithuania's average 12-month inflationary rate, or 2.7 percent. The respective rate for Slovenia, which is also gearing to join the eurozone in 2007, was 2.3 percent.

"The probability that the recommendations of the European Commission and the European Central Bank for our country's eurozone membership will be negative stands at almost 100 percent," analysts of SEB Vilniaus Bankas were quoted as saying.
Eurostat, the European Commission statistics arm that released the inflation data, did not estimate the official Maastricht inflation criterion, which will be estimated by the commission.
Still, Balcytis refused to lose hope, saying that the Baltic country still has a chance to see the euro come Jan. 1, 2007.
"We have projected that Lithuania's inflation rate might exceed the Maastricht reference rate by several hundredths of a percentage point. Our projections were absolutely true, and the excess is not that significant," Balcytis told the Baltic News Service.

"I cannot speculate on the recommendations to be issued by the European Commission or the European Central Bank since it could be seen as Lithuania's attempt to exert pressure," the finance minister said. "Yet I still hope that the final decision will be favorable to Lithuania. Hope springs eternal."
Reinoldijus Sarkinas, governor of the Bank of Lithuania, said, "We are not to make decisions on behalf of European institutions. We have to wait for them to make the decision. If they decide to admit us, we will adopt the euro, and if they decide against this, we will not adopt the single currency. It will be no tragedy at all."
Prime Minister Algirdas Brazauskas announced last week that Lithuania had complied with the Maastricht inflation rate.
On April 20, Eurostat reported that, in March, the lowest average 12-month inflation was registered in Sweden (0.9 percent), Finland (1 percent), the Netherlands and Poland (each at 1.5 percent).
The European Commission is set to publish its official recommendations on the compliance of Lithuania and Slovenia with Maastricht criteria on May 16.