Euro slipping away from Lithuania

  • 2006-04-19
  • Baltic News Service
VILNIUS - EU policy makers have reportedly expressed fear that the growth of consumer prices in Lithuania will accelerate in upcoming months and block the Baltic country's drive to adopt the euro. The Lietuvos Rytas daily reported that the European Commission, writing in its economic review published last fall, that the growth of consumer prices in Lithuania would speed up in 2006 and 2007 and impede the country's efforts to meet the Maastricht inflation criterion necessary for joining the eurozone.

The commission forecast that annual inflation would reach 2.8 percent in 2006 and then 2.9 percent in 2007.
Lithuanian policy makers are projecting slower growth in consumer prices, with the harmonized index of consumer prices set to remain at 2.7 percent both in 2006 and 2007.
The higher than required inflation rate may prevent the country from adopting the euro on Jan. 1, 2007. Some EU observers note that Lithuania could not join the 12-nation eurozone even if it met all criteria since the inflation rate was likely to exceed the required level in future.
Among the three Baltic states, Lithuania is the only one with a chance to adopt the euro as early as next year. Estonian officials have all but admitted that the country will have to wait until 2008, while Latvia, which has the highest inflation in the EU, will likely have to wait several more years.
The commission will publish its opinion on Lithuania and Estonia's readiness to adopt the euro in mid-May.