Lithuanians set sights on 2009 for eurozone entry

  • 2006-08-09
  • Staff and wire reports
VILNIUS - Even though Lithuanians are being told they will not see the euro until 2009 at the earliest, the government has stated it would pass a euro-adoption plan this fall.

According to the Verslo Zinios daily, Prime Minister Gediminas Kirkilas has confirmed that the government would approve a plan for introducing both euro coins and notes. Businesses and banks are particularly concerned with establishing a reliable date for phasing in the euro, the paper wrote.

Gitanas Nauseda, an adviser to the president of SEB Vilniaus Bankas, Lithuania's commercial bank, said that the government should first fix the date for the adoption of the euro and envisage the factors that could spur inflation 's e.g., raising excise duties or growth of natural gas prices.
"If we aim to adopt the euro from 2009, we will have to implement measures that would result in a temporary rise of inflation early in 2007. Thus we would have a comparatively lower inflation rate early in 2008, before the convergence assessment," Nauseda noted.

The European Commission and the European Central Bank together ruled in May that Lithuania was not prepared to adopt the common currency since the Baltic state failed to satisfy the Maastricht criteria on inflation. Average inflation in Lithuania during the 12 months ending in March 2006 was 2.7 percent, slightly over the reference value of 2.6 percent as set by the three EU members states with the lowest inflation.

The decision triggered a wave of criticism from Lithuania and other new member states, who accused Brussels of rigidity and harming a new member state's economy.