Commissioner irks central banker

  • 2006-03-01
  • By TBT staff
VILNIUS - Lithuania's drive to become one of the first new EU member states to adopt the euro took an emotional turn last week after central bank chief Reinoldijus Sarkinas said a recent statement by the union's monetary policy commissioner about the country's risk of being scratched for eurozone membership in 2007 amounted to "unethical pressure."

Commenting about EU Commissioner Joaquin Almunia's public doubts about Lithuania's preparedness for the euro in January 2007 due to rising inflation 's one of the key criteria for eurozone entry 's Bank of Lithuania governor Sarkinas told LNK TV that such talk was unethical.

"I believe that the European Commission officers are precipitating the events with statements that one country complied with the criteria and the other did not. Such evaluations should not be spelled out 's Lithuania has not applied to have such an assessment worked out, and so on," Sarkinas said.

The central banker added that Lithuania's prospect for becoming a eurozone member should be evaluated according to the terms set out in official agreements 's in the Baltic states' case, this spring.

EU Budget Commissioner Dalia Grybauskaite, former finance minister in Lithuania, stepped into the debate last week by saying that Lithuania must cut inflation if it wanted to join the eurozone next year.

"I think that inflation has to be reduced. With economic growth at just over 7 percent, its current level is somewhat too high," Grybauskaite told the Lietuvos Rytas daily. She added that oil prices and a real estate boom in the country have had a major impact on the current inflation level.

The same problem is also hexing Estonia. Commissioner Siim Kallas, who is from Estonia, said there was little possibility of easing the criteria set for adopting the euro.

"The fact is, there are firm rules for the adoption of the euro and they either are or are not fulfilled. Adoption depends on that," Kallas, who is commission vice president, told reporters last week.

Kallas was reluctant to say whether Estonia, which also wants to adopt the euro among the first wave of new members in January 2007, would meet the criteria.

However, annual inflation has reached almost 4 percent and is significantly higher than what is laid out in Maastricht. The Bank of Estonia has admitted that the country does not meet the inflation criterion but that the inflation rate could start declining from the second quarter of the year.