Brussels, 08/04/2014 (Agence Europe) - On Monday 7 April, the European Parliament's economic and monetary affairs committee was virtually unanimous in its desire for Lithuania to join the euro.
Adopting a draft report by Werner Langen (EPP, Germany), the MEPs said that Vilnius meets the three main criteria laid down in the Maastricht Treaty for joining the euro - the public deficit is expected to fall from 2.7% of GDP in 2013 to 2.3% in 2014; public debt will increase from 39.5% to 42.2% of GDP over the same period; and average inflation is now under control and lower than the reference value (see EUROPE 11040). It was high inflation that led to the country's previous request to join the euro being rejected.
The committee recommends that the Lithuanian authorities actively communicate on their preparations for joining the euro as a way of reassuring the majority of the country's population, who are concerned that the single currency will push prices up. The committee supports the country's efforts to reduce its reliance on Russian gas. MEPs note that Lithuanian banks are healthy with high capitalisation and low levels of non-performing loans, and 90% of the market is held by Scandinavian bank subsidiaries.
The European Commission and European Central Bank will each be publishing an assessment in June and the Ecofin Council will take the final decision in July. Lithuania would become the 19th country in the eurozone on 1 January. (MB)