Lithuania meets all criteria for euro membership - central bank

Friday 16 May 2014 08.18
Final word on Lithuania's euro zone membership is expected from the European Union Council in late July
Final word on Lithuania's euro zone membership is expected from the European Union Council in late July

Lithuania has met all the economic criteria for joining the euro zone on schedule in 2015, the country's central bank has said. 

Lithuania hopes joining its Baltic neighbours, Estonia and Latvia, in the euro zone will boost investor confidence by removing any currency risk related to the litas. That risk can be an issue in a country where most loans are made in euros. 

The litas has been pegged to the euro since 2002.

"There is no longer any doubt that we have caught the bird by its tail," Central Bank Governor Vitas Vasiliauskas said. 

"The indicators, as they are today, will be used to check Lithuania's adherence to the Maastricht criteria, and we strongly believe that there is no doubt Lithuania is fulfilling the criteria," he added.

Lithuanian inflation was too high for the country to join the euro club in 2007. It is now 0.6%, well below the expected criterion of 1.1-1.7%, the central bank said.

Lithuania also has met the rest of the so-called Maastricht criteria, including low sovereign interest rates, a modest budget deficit, low government debt and a stable currency, the bank said.

"The decision is now on the other side of the football field," Vasiliauskas said.

The final word on Lithuania's euro zone membership is expected from the European Union Council in late July, after it hears opinions from the European Central Bank and the European Commission, both seen in early June.

Lithuania had begun asset-quality reviews at three of its largest banks in order to join the banking union at the same time it gains euro zone membership, Vasiliauskas said.