Lithuania aims for euro in 2009-10

Lithuania aims to join the euro before the end of the decade, according to newly elected Prime Minister Gediminas Kirkilas.

Vilnius had hoped to become part of the eurozone on 1 January 2007, a plan that was rejected by the European Commission because the country failed to meet inflation targets.

Kirkilas said that Lithuania would now aim for an entry date of 2009-10 and would put in place a plan to make sure inflation was contained.

"We are preparing at least two or three plans to join the euro in 2009, probably in 2010," he said.

The Lithuanian government is expected to reveal details of its renewed membership bid when Economic and Monetary Affairs Commissioner Joaquín Almunia visits the country later this month.

Kirkila said: "Right now the government is considering a plan how we can manage our inflation, we have some challenges."

He cited high energy prices and government plans to raise taxes on cigarettes and fuel as the chief inflationary pressures that would need to be managed.

His comments came during a visit to Brussels on Friday (8 September), the first foreign trip of his premiership, when he met Commission President José Manuel Barroso.

After their meeting, Barroso showed little sign of heeding demands to adjust the rules for eurozone membership. "Inflation is an important criterion," he said.

Critics of the current rules say that strict inflation targets are disproportionately difficult to meet for the fast-growing economies of eastern and central Europe, a charge that intensified when it emerged in May that Lithuania had overshot inflation targets by just 0.07%.

Kirkilas said that there was no need for the EU to revise the rules.

"I don’t like to describe these criteria as discrimination or something like that. We have to be ready to complete these criteria, it is not only for Europe, but it is healthy for our economy as well."

Lithuanian inflation is likely to reach 4% by the end of the decade, according to projections from the International Monetary Fund.

Lithuania aims to join the euro before the end of the decade, according to newly elected Prime Minister Gediminas Kirkilas.

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