Lithuania readies for euro adoption tktk

  • 2014-05-01
  • From wire report

EURO-BOUND: Lithuania gets on the fast track for euro adoption.

VILNIUS - With less than seven months remaining until the planned introduction of the euro in Lithuania, more than half of companies have begun preparations for the currency changeover, though residents seem to be putting this off till later, reports ELTA.
This was revealed in the study Lithuania’s Euro Readiness Index, carried out by Swedbank in cooperation with TNS LT. The index consists of the results of a survey in which Lithuanian residents and company heads were polled on their ‘readiness,’ attitude and activities regarding the planned euro adoption.

The resident readiness index stands at 30 index points, while the readiness of company heads for the changeover is at 46 index points out of a maximum 100 points.
According to the data, the majority of companies have already begun preparing for the euro. About 80 percent of polled companies said they were planning the process of preparations and would begin concrete actions in the near term.
Companies most often plan changes in accounting software (48 percent), plan readiness for the parallel posting of prices and tariffs (42 percent), to inform their customers about the planned changes during the transition period (35 percent).

Almost a third of companies (35 percent) said they were planning the adaptation of IT systems to the euro.
Almost a third of Lithuanian companies have expressed full support to the adoption of the euro, while only every tenth company is completely against the currency’s introduction.

Government supports business
Prime Minister Algirdas Butkevicius in the opening speech at the April 25 economic conference Convergence Dynamics in the EU after the Economic Crisis, organized by the Bank of Lithuania and held at the Palace of the Grand Dukes, said that Lithuania is following disciplined fiscal policies and is ready to adopt the euro at the beginning of 2015.
According to Butkevicius, Lithuania proved last year that its economy was resilient to negative external factors and remained one of the fastest growing EU economies.

The prime minister stated that in the area of fiscal policy, in order to maintain market confidence in the development of the economy, the country will continue to create favorable conditions enhancing productivity, attract investments, create a favorable business environment and ensure rational use of state budget funds for investment.
“It is expected that in the next four years an improving external economy and business environment, beneficial borrowing conditions, better than other EU countries’ economic prospects and projects initiated by the government will encourage business to expand production capacity and increase investment,” Butkevicius said.

Seimas takes step forward
The Law on the Euro Adoption was passed by Lithuania’s Seimas (Parliament) last month with a strong majority: 87 MPs voted for, 7 voted against and 13 abstained. Preparation procedures for the euro adoption, the exchange of litas to the euro, withdrawal of the national currency from circulation as well as other aspects of introduction of the new currency were outlined.

As Minister of Finance Rimantas Sadzius said, now Lithuania has to wait for the Convergence Report to be issued by the European Commission and the European Central Bank in early June. The Convergence Reports examine whether the member state satisfies the necessary conditions to adopt the single currency.
On the basis of its assessment, the Commission submits a proposal to the ECOFIN Council which – having consulted the European Parliament, and after discussion among the heads of state or government – decides whether the country fulfills the necessary conditions and may adopt the euro.

If the decision is favorable, the ECOFIN Council takes the necessary legal steps and – based on a Commission proposal, having consulted the ECB – adopts the conversion rate at which the national currency will be replaced by the euro, which thereby becomes irrevocably fixed.

Lithuania plans to introduce the euro on Jan. 1, 2015.