Euro-anxiety continues to grip Baltics

  • 2005-10-19
  • Staff and wire reports
RIGA - Baltic leaders continued to fret about their preparedness to phase in the euro in 2007 's 08, with leaders confirming their commitments to do whatever it takes to adopt the common currency as soon as possible.

In Latvia, Prime Minister Aigars Kalvitis promised to unfurl an information campaign next year in order to combat an alarmingly high level of skepticism toward the euro.

Last week the SKDS pollster published results of a poll showing that almost half of Latvia's population, or 49.1 percent, do not support replacing the lat with the euro. Some 38 percent of respondents spoke in favor of adopting the euro.

"If the sociological studies show the ratio as 50:50 at the moment, I would call this a good result," Kalvitis told the 900 Sekundes morning news program. He said Latvia would adopt the euro no sooner than in 2008, so the government had not yet started its campaign.

The nearer the date comes the information campaign would begin, he said.

When asked how realistic Latvia's plans to introduce the euro were given the high inflation (over 7 percent as of end-September 2005), the prime minister said that the problem existed in other countries as well and that Europe may have to make a political decision on the issue.

In Estonia, Prime Minister Andrus Ansip confirmed his government's goal to switch to the euro on Jan. 1, 2007. "There are no grounds today to claim Estonia will be unable to achieve this goal," he was quoted as saying.

Ansip did admit that meeting the inflation criterion is more complicated than ever due to external factors such as oil prices.

Several analysts have forecastethat Estonia would fail to meet the Maastricht inflation requirement (inflation rate no higher than 1.5 percentage points above that of the three European Union countries with lowest inflation).

Bank of Estonia President Andres Lipstok has said that meeting the inflation requirement could be a problem, while the Estonian Institute of Market Research warned last week that Estonia would not be able to meet the criteria. Sweden's SEB bank has said that Lithuania will be the only Baltic state to meet all requirements for euro-introduction in 2007.

Indeed, last week EU Budget Commissioner Dalia Grybaus-kaite said that Lithuania was on track to replace the litas with the euro in early 2007. She told the Kauno Diena daily that the country's latest statistics were rather upbeat, adding that no conclusions should be made until annual results were available. She said the Lithuanian economy is vibrant, with taxes being collected and public debt declining.

"Apart from inflation, I see no other reasons that could prevent Lithuania from passing through the Maastricht barrier," the commissioner said. o