Budget chief demands end to euro-entry dogma

By Simon Taylor

Date: 18/05/06

Budget Commissioner Dalia Grybauskaiteúand other Commissioners from new member states made a last-ditch plea for a more flexible interpretation of the qualifying criteria for joining the euro this week.

But their arguments were over-ruled as the Commission decided on Tuesday (16 May) that Lithuania failed to qualify for eurozone membership because its inflation rate was too high.

In the Commissioners' discussion on whether Lithuania and Slovenia had met the criteria for entry next January, Grybauskaiteú argued forcefully that the criteria on eurozone membership should not be applied "too dogmatically". She told European Voice: "The Maastricht criteria are defined to guarantee economic stability and development". Interpreting them too rigidly "would not serve this purpose", she said.

The Commission decided on Tuesday that Slovenia had met all five criteria to be admitted to the eurozone next January. But it ruled that Lithuania was not ready yet because its inflation rate was too high to qualify.

Vilnius is reporting inflation of 2.63% which is slightly higher than the 2.6% target.

According to figures published yesterday (17 May) by Eurostat, the Commissions statistical arm, Lithuanian inflation averaged 2.7% over the last 12 months to April 2006.

Grybauskaiteú received backing in the Commission meeting Tuesday from Czech Employment and Social Affairs Commissioner Vladim’r S

pidla who questioned the methodological approach to the Commission's calculations.

The Lithuanian commissioner also had support from Polish Regional Policy Commissioner Danuta Hübner at a meeting of Commissioners' advisers. But Hübner did not attend the full Commission meeting in Strasbourg.

Lithuania is contesting how the target rate is calculated. The rate is worked out by taking the average rates of the three EU countries with the lowest level of price increases, currently Poland, Sweden and Finland, only one of which is a eurozone member. If the rate had been calculated using the inflation performance of the three eurozone members with the lowest level of inflation, Lithuania would have qualified.

If the rate had been calculated using the inflation performance of the three eurozone members with the lowest level of inflation, Lithuania would have qualified.

Article reports that European Commissioner responsible for the Budget, Dalia Grybauskaite, and other Commissioners from new Member States made a last plea for a more flexible interpretation of the qualifying criteria for joining the euro before the adoption of the Commission's recommendations. The Commission decided on 16 May Tuesday that Slovenia had met all five criteria to be admitted to the eurozone next January. But it ruled that Lithuania was not ready yet because its inflation rate was too high to qualify.