Brussels, 17/03/2014 (Agence Europe) - At the European Parliament on Monday 17 March, the Lithuanian government made the case that its economy was strong enough to be able to join the eurozone next year.
Lithuanian Finance Minister Rimantas Sadzius said that joining the euro was not the goal of the country's trajectory, but a stage in the process of further economic development. He highlighted the country's budget discipline (cutting its public deficit from 10% of GDP in 2009 to 2.5% in 2013 according to Lithuanian forecasts), rationalising welfare spending, building a gas terminal to shatter Gazprom's monopoly. He said he was “sceptical” about the idea of partly pooling sovereign debt in the eurozone, and Vitas Vasiliauskas, Governor of the Bank of Lithuania, stressed the strong banking sector (strong capitalisation, low level of non-performing loans), 90% of which is owned by subsidiaries of Scandinavian companies. Vasiliauskas said that, if Lithuania joined the eurozone, the three largest of these subsidiaries would be directly supervised by the ECB under banking union. The Commission says that the country's deficit will fall from 2.7% of GDP in 2013 to 2.3% of GDP in 2014, unemployment will fall over the same period from 11.8% of the working population to 10.4%, and debt will rise from 39.5% to 42.2% of GDP. (MB)