Lithuania to become 19th country to adopt Euro as currency from 1 January 2015

Jun 7, 2014 13:10 IST

Lithuania will become the 19th country to adopt Euro as a Single currency from 1 January 2015. This was revealed by the European Union Commission's Convergence Report released on 4 June 2014. Convergence Report examined whether Member States satisfy the conditions for adopting the single currency Euro.

As per the report, Lithuania met all of the criteria among the eight countries which showed interest to join Euro club. The eight countries are Bulgaria, the Czech Republic, Croatia, Lithuania, Hungary, Poland, Romania and Sweden.

Although, EU commission asked the Lithuania to maintain low inflation rates but it is not a worrisome aspect.

The commission expected inflation in Lithuania to accelerate to 1.1pc in 2014 from a 12-month average of 0.6pc measured to April 2014.The target is to maintain inflation within the eurozone below but close to 2pc – something that has been elusive in recent years.

The Lithuanian central bank estimates that not being part of the eurozone cost Lithuania roughly 2 percent of GDP in increased borrowing costs during the world financial crisis.

Criteria to join Euro

In order to qualify to join the euro, a country must fulfill the following conditions:

•    Government debt no higher than 60pc of gross domestic product (GDP),
•    Budget deficit below 3pc of GDP,
•    Low inflation and interest rates and
•    Country’s own currency has to be stable against the euro

About the Report

The 2014 Convergence Report is a regular biennial report. Convergence reports are issued by the European Commission and the European Central Bank every two years, or more often if a country intending to join the euro requests it. These reports form the basis for the decision on whether a Member State may join the euro area.

About the Euro

The euro is the single currency shared by 18 of the European Union's Member States, which together make up the euro area. The introduction of the euro in 1999 was a major step in European integration: more than 333 million EU citizens now use it as their currency.

Which countries have adopted the euro and when?

1999    Belgium, Germany, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland
2001    Greece
2002    Introduction of euro banknotes and coins
2007    Slovenia
2008    Cyprus, Malta
2009    Slovakia
2011    Estonia
2014    Latvia

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