2009 for Lithuanian euro?

  • 2006-09-20
  • By TBT staff
VILNIUS - Analysts at SEB Vilniaus Bankas have laid heavy criticism on the government's tentative 2010 plans for the adoption of the euro, spurring the politicians to respond with promises of staying on course.

"The government has demonstrated its carelessness by delaying the euro entry date until some uncertain future, and by jeopardizing the next stage of eurozone enlargement in 2009," said Gitanas Nauseda, an advisor to the president of SEB Vilniaus Bankas.

"What's more, we will have a general election in late 2008, allowing for attempts to win favor with skeptical voters, which would send contradictory signals to the European Union's institutions," Nauseda said.
"The government has behaved like an offended child who did not get the candy he wanted in 2007, and now he no longer wants it," he added.

Prime Minister Gediminas Kirkilas retorted with claims that the government would not hinder Lithuania's goal of making the next round. Speaking to Parliament, the prime minister stated that he expected parties to sign an agreement on fiscal discipline.
Social democrats acknowledged inflation rates would be hard to control.
SEB Vilniaus Bankas analysts predicted inflation for 2007 to be at 4 percent, and 3 percent for 2008. They warned that eurozone entry could happen at a much later date if action was not taken to curb inflation.

Higher electricity prices due to the closure of the Ignalina nuclear power plant would cause an inflation rise in 2009, the analysts added, making the government's realistically stated 2010 goal harder to reach. They predicted that the country's average annual inflation rate would reach 3.8 percent this year, while the Maastricht limit for euro adoption was predicted to be 2.8 percent in 2009.

President Valdas Adamkus also chimed in, calling for a 2009 goal for the euro.
"The agreement should specify how and when the budget will be balanced and how expenditure will be curtailed, and the document must be given a binding legal form - it should be expressed in the form of a law," Adamkus said. "It is of utmost importance that we do not lag behind, though we have said that we are leading in terms of euro introduction in this region. We have an opportunity to prove that by our work and commitments."

The government has not yet announced an official eurozone entry goal, but both Finance Minister Zigmantas Balcytis and Prime Minister Gediminas Kirkilas have set 2010 as the most realistic target.