Negotiation chapter "Economic and Monetary Union"

The acquis in the chapter "Economic and Monetary Union" covers the following areas: Economic policy co-ordination and fiscal policy, Monetary and exchange rate policy. The Republic of Lithuania will be ready to implement the requirements of the EMU acquis for countries that do not adopt the euro from the date of accession to the European Union.

The main provisions in the area of Monetary and exchange rate policy

EU acquis in the area of Monetary and exchange rate policy and the articles of the Treaty Establishing the European Community (Treaty), the provisions, principles or requirements of which should be implemented in Lithuania or the alignment of which in Lithuania should be ready by the time of accession, are related to the implementation of the requirements to central banks of the EU Member States (Articles 101, 108, 109 and 110 of the Treaty) and to the requirements on the common exchange rate policy (Article 111 of the Treaty).

Upon the adoption of the Law on the Amendment of the Law on the Bank of Lithuania of 13 March 2001 prepared taking into account the requirements applied to central banks of the EU countries, Article 108 of the Treaty on central bank independence has been implemented. The Law on the Bank of Lithuania ensures institutional, personal and financial independence of the Bank of Lithuania.

The principles set forth in Article 101 of the Treaty, which establishes that central banks may not lend to public authorities, are implemented in Lithuania. In order to fully implement this provision and harmonize it with Article 101 of the Treaty, this prohibition is laid down in a separate article of the Law on the Bank of Lithuania. The requirements of the provisions of Article 102 of the Treaty on prohibiting privileged access of public sector authorities to financial institutions are essentially implemented and there is no need to align any legal acts, i.e., there are no legal acts that contradict these requirements and there is no need to amend or issue additional legal acts on this issue.

In the process in the preparation for EU accession it is important to improve the legal and technical framework of the monetary policy instruments of the Bank of Lithuania in order to be ready for participation in the European Central Bank System in the future.

During the EU pre-accession period Lithuania intends to maintain the fixed exchange rate regime. In order to promote further integration into the EU market, the anchor currency of the litas - the US dollar – was replaced with the euro on 2 February 2002. The fixed peg of the litas to the euro will create the conditions to participate in the Exchange Rate Mechanism II following Lithuania’s accession to the EU and to adopt the euro in the future.