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Lithuania Joins Eurozone

  • 2015-01-08
  • By Gediminas Cekivicius

VILNIUS - On January 1 this year the litas — which had served as Lithuania’s currency during both periods of the nation’s independence — was ushered aside, and the euro was ushered in.
There were a few dramas during the transition: reports soon circulated about crafty, unscrupulous scammers. Reportedly masquerading as government officials, these fraudsters went from door to door with government forms, claiming to be inspecting and verifying people’s new currency, before clearing off with it.

There was also the occasional shop that ran out of euro coins, and other such incidents; but for the most part, the transition went without a major hitch: the litas was sent off in with the pomp and circumstance worthy of an Egyptian pharaoh, with groups of volunteers creating the largest coin pyramid in the world — a proud way to pay tribute to a currency that had come to be a proud symbol of national independence. (It should of course be pointed out that this meant not only independence from the rouble and the Soviet Union, but also from the talonas, the somewhat disastrous currency used in the early 1990s.)

And in a somewhat curious celebration of the euro’s adoption in Lithuania, the first thousand one-euro coins with Vytis (an armour-clad knight on horseback featured in the country’s coat of arms) were minted on 16 June 2014 by Lithuanian Mint. The coins were then placed in a special vault for six months, stored and preserved at the Money Museum of the Bank of Lithuania, before being encased in organic glass and given out to newborn babies. The babies declined to comment.
What remains to be seen is how price will rise over the long-term following the introduction of the euro, though many analysts claim most of the price increases had already taken place before the euro was introduced, in a similar way to what turned out to be the case in Latvia and Estonia, who joined the eurozone in 2011 and 2013 respectively.

Politicians have effusively praised the coming of the euro, keen to mark down this moment as historically important. Prime Minister Algirdas Butkevicius has not hesitated to get in on the act, citing the prospect of foreign investment.
“The euro will serve as a guarantee for our economic and political security, enabling further economic viability, job creation and rising public well-being,” said Butkevicius.  “I firmly believe that Lithuania will contribute to the strengthening of the euro family. We happen to be among the EU economic growth leaders, and we come to the euro family equipped with determination, focus and energy.”

On the flipside of the coin, there was one less-than-jolly foreigner who was far from pleased. The leader of the United Kingdom Independence Party, Nigel Farage, who steered the British anti-EU party to electoral success at 2014’s European parliamentary elections, was much more scathing about Lithuania’s decision to join the eurozone. During his December visit to Vilnius, Farage said he was “astonished” at Lithuania’s choice of currency, slamming Lithuania’s accession to the eurozone as a “short-term temptation.”

Long-term investments, or short-term temptation? Time will tell. But the euro has arrived, and it is probably a good idea to exchange those litas, or else keep them for your grandchildren’s antique sales.