Lithuania is set to become the 19th country using the euro. The European Commission announced the Baltic state can enter the eurozone at the start of next year.
Brussels said it meets all the criteria – government debt and the budget deficit being not too high, low inflation and interest rates, and its currency is stable against the euro.
EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters a lot of work has preceded this move: “Lithuania’s readiness to adopt the euro reflects its long-standing pursuit of prudent fiscal policies and serious economic reforms. This reform momentum, driven partly by Lithuania’s EU accession 10 years ago, has led, in fact, to a striking increase in the prosperity of Lithuanians.”
The only red flag, which was raised by the European Central Bank, was inflation.
The European Commission expects it to increase to 1.1 percent this year and 1.8-1.9 percent next year.
In the 12 months to April it has averaged 0.6 percent.
Olli Rehn said he did not think that was a worry.
Lithuania’s President Dalia Grybauskaite welcomed joining what she called “the club of the strongest” saying the country would be trusted more so would be able to borrow more cheaply freeing up money “for pensions and other things”.