Lithuania Still Planning To Adopt Euro In 2014

Published January 3, 2012 3:54PM (EST)

VILNIUS, Lithuania (AP) — Lithuania is still determined to introduce the embattled euro currency in two years, a government official said Tuesday, despite skepticism by the Baltic country's president.

The center-right government was doing everything possible to join the eurozone in 2014, its previously stated goal, said Virgis Valentinavicius, an adviser to Prime Minister Andrius Kubilius.

"The most important thing are stable finances" to meet the standards of the EU "and the prime minister is sure that our country will meet them," said Valentinavicius.

"We can only hope that EU will solve the problems of common currency by that time," he added.

However, in an interview published Monday in the Veidas magazine, President Dalia Grybauskaite expressed doubt that Lithuania would be ready, saying "2014 was unrealistic." She did not elaborate.

Grybauskaite, a former finance minister who served as the EU's budget commissioner for five years, could be seen as veiled criticism of the government, which barely managed to pass the 2012 budget in last December.

The budget will have a slightly higher than expected deficit of 3 percent of gross domestic product — the upper limit allowed by the EU — as growth prospects deteriorate due to the European financial crisis.

Lithuania, which joined the EU in 2004, is obliged to introduce the euro along with other East European members of the bloc, though there is no deadline for doing so.

Poland, for instance, has said it would take a slower path to currency integration and would be ready to adopt the euro in four years. Lithuania, a nation of 3 million people, wants to phase in the euro as soon as possible, or 2014.

The Bank of Lithuania said that inflation could become the biggest obstacle to eurozone membership.

"According to (the bank's) analysts, the greatest risks to missing the Maastricht criteria is inflation," bank spokesman Mindaugas Milieska said. "Despite a slowdown in economic growth, inflation is strongly affected by outside factors such as fluctuation of global energy and food prices."

In November annual inflation in Lithuania was 4.4 percent, compared with an average 3 percent in the 17-member euro area.

By Salon Staff

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