Beware the euro

  • 2006-03-22
  • By David Allen
In recent times inflation in Lithuania has been declared at around 2.7 percent per annum. I have been living in Vilnius since September 2004, and I have noticed inflation far beyond this stated rate, not least in the supermarkets and on staples.

Musing aloud, it is obviously in the interests of the government to declare a rate of inflation below 3 percent in line with the Maastricht criteria in order to adopt the euro. The diplomacy of your paper is legendary, but might it be worth investigating this? Latvija declared inflation of over 7 percent because they could not disguise it below this figure. If inflation here is 2.7 percent, I am Japanese.

In France, Holland and Italy, entry into the eurozone incurred visible inflation the following year. Similar results here will break many people, and particularly the old. The compounded effect of already galloping inflation in the Baltics and any similar effect of adopting the euro could be disastrous. I am personally puzzled why the governments are so mustard keen to join and sacrifice the relative control retained over their currencies.
Might this be a worthy subject for your attention?

Vilnius
 

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