Lithuania hopes euro zone membership will be worth the wait

December 30, 2014

With the dawn of the new year on Thursday, Lithuania will become part of the euro zone, joining fellow Baltic nations Estonia and Latvia. All European Union countries except Denmark and the United Kingdom are required to adopt the euro as their national currency, and Lithuania, which joined the EU in 2004, is the only country to have been rejected for Euro membership, when in 2006 concerns about its high inflation rate kept Vilnius on the outside looking in.

But as this Reuters graphic shows, Lithuania’s fortunes have much improved. At 0.4 percent, its inflation rate is just a hair above the euro zone average of 0.3 percent, and its 9.5 percent unemployment rate, while high, is right in the middle of the pack, and comfortably below the zone average of 11.5 percent. Lithuania’s 1.3 percent real GDP growth rate beats both of its Baltic partners and is again well above the -2.2 percent Euro Zone average.

With the move, which does not come with Russia’s blessing and has mixed popular support, Lithuania hopes to gain access to further Western markets—and the economic security therein entailed. The Lithuanian currency, the lita, has been pegged to the euro since 2002, and was tied to the dollar before that, so the shock shouldn’t be huge. Which isn’t to say it will be entirely painless: Service to local automatic teller machines will be interrupted for the just over an hour as the new year rings in the new currency, and as the Shanghai Daily wrote today, “It is reported that even Algirdas Butkevicius, the Prime Minister, will have to wait for at least 10 minutes after New Year’s midnight to cash first euros in a ceremony.”

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3 comments

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Cash in on the Euro? LOL. Tell that to Greece!

Posted by PaperTrails | Report as abusive

The same thing will happen as happened in every Eurozone country:

-the rich, banks and corporations will benefit
-the middle class will pay for everything
-the poor get poorer
-unemployment goes up

This has happened everywhere the wealth-destroying Euro was introduced.
Oh, and you’re on the hook for Greek and Italian debt now.

Posted by marvri75 | Report as abusive

Dear Mr Corones,

Thank you so much for not adding that “ex-Soviet state of” prefix before the name of our country. Truly refreshing. Most Western news sites still feel the need to remind the readers that Baltic countries were once Soviet. I wonder why. Nobody is calling Germany “ex-Nazi state of Germany”.

Posted by Hoegaarden | Report as abusive