Lithuania’s accession to the eurozone: Timing, motives, expectations

Lithuania joined the eurozone in January 2015. It was the last of the Baltic States to introduce the euro, despite the original intention of the country’s political elite in 2004 to accomplish this as soon as possible. When, after joining the Exchange Rate Mechanism II (ERM II) in June 2004, Lithuania asked the EU to assess the country’s readiness to introduce the euro in 2007, it was given a negative assessment based on non-compliance with inflation criteria. It took a decade after accession to the EU to achieve this goal, despite the fact that, due to the existence of the Currency Board since 1994 and pegging the Lithuanian litas to the euro at a fixed exchange rate since 2002, the country’s monetary policy depended on the decisions of the European Central Bank (ECB) and its economy functioned as a quasi-member of the eurozone. This article discusses the main motives for joining the eurozone, the reasons for failing to accomplish this in 2007 and succeeding in 2015, and, finally, the expectations of political leaders and the population linked to membership of the eurozone.

Website: International Centre for Defence and Security (ICDS / RKK) http://www.icds.ee/

ESO: Background information: Lithuania becomes the 19th Member State to adopt the euro http://www.europeansources.info/record/lithuania-becomes-the-19th-member-state-to-adopt-the-euro/

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