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The day after tomorrow, as the year changes, euro will also be the money of the Lithuanians. Indeed, they already wanted the currency back in 2007, but were rejected as their inflation was slightly above the Maastricht criterion. Now, eight years later, Lithuania becomes 19th member of the eurozone – a decision maker at the European Central Bank (ECB) table in Frankfurt.
At the start of this summer, green light was shown to Lithuania by the European Commission and ECB. Last year, Lithuania fulfilled all the Maastricht criteria. Inflation was at 0.6 percent, budget deficit shrunk to 2.1 percent of GDP, and the long term government bond yields came down as well. Then EU financial commissioner Olli Rehn described Lithuanian’s joining in poker terms: Baltic full house in eurozone. The significance of the event, to our region, probably exceeds the savings in exchange rates etc in the business books. The essence is a deepening European cooperation, a snub to those who would wish to see Europe break apart.
The Lithuanians’ «expectation and fear» are exactly what we in Estonia experienced four years ago, and what the Latvians were saying just a year ago. Some were the everyday fears and, for an onlooker, a bit comical perhaps. Four years after the switch to the euro, no-one in Estonia remembers such fears and, probably, things will be smooth in Lithuanian as well. There’s the stubborn fear that the change of currency brings a substantial price rise, though the experience thus far from other countries assure us that the price rise directly linked to adoption of the euro was fractional.
We do well understand that there’s a sense of loss in even those who deem the step as economically sound. Once we lose our own money, it becomes especially dear. So it was in Estonia, so it is now in Lithuania. A remembrance of own money, a Lithuanian knight from the coat-of-arms will be adorning a side of the coins.
According to polls, support towards joining the euro has increased over this past year and the pros by now clearly exceed the cons. Ergo, the Lithuanian society has considered the topic, enlightening it and winning supporters by arguments presented.
The reasons to join were quite the same as for Estonia. Also, we may add that Lithuania is joining a eurozone better prepared for hardships than when Estonia entered. Let’s recall: even the much argued-about European Stability Mechanism (ESM) was born quite some time after Estonia’s entry. Back then, the debt-laden Greece was everyday news. Not anymore. Etc.