2014-09-25
Euro adoption — Lithuania’s historical step towards a stronger Europe, greater security and prosperity
In adopting the euro, Lithuania is not only moving forward on the path of euro integration that began almost a quarter of a century ago, but also gains solid means for developing a more secure economic and financial system as well as creating well-being for the people not only in our country, but in the whole region of the EU’s single currency — this was stated at the international conference on the euro adoption, held in Vilnius.
“Beyond showing commitment to making its own economy fit for the euro area, Lithuania has also contributed to making the currency union as a whole more stable: the priorities set last year under its EU presidency included more steps towards banking union and a further deepening of Economic and Monetary Union. We can draw an important lesson from the Baltic experience: governments not only acted boldly but also immediately,” said Mario Draghi, President of the European Central Bank, in greeting the participants of the conference, gathered at the National Philharmonic Society of Lithuania.
“The euro adoption crowns what was begun almost a quarter of a century ago, when Lithuania firmly and irrevocably chose the direction of euro integration. Having made a decade ago the free decision to become a member of the EU, with the single currency we will soon draw even closer to Europe — being together we will have more opportunities to be stronger, more secure and richer,” said Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania.
At the conference he emphasised the importance of partnership and mutual cooperation. In accepting Lithuania into its family, the euro area will gain a financially disciplined, responsible and reliable partner with a clear, stable and well-capitalised banking sector. By adopting the euro, Lithuania will complete the integration of the Baltic States into the euro area and thus strengthen even more the competitiveness of the region. According to the assessment by the World Bank, Lithuania is 17th in the world and 3rd among all the countries in the EU’s single currency region by competitiveness. The euro will help Lithuania ensure greater opportunities to compete on the world stage, draw in more investment and create jobs.
According to the estimates of the Bank of Lithuania’s economists, due to the euro adoption the scope of Lithuania’s foreign investment will increase by 5–10 per cent, while the benefits in the medium term, until 2021, will amount to at least EUR 10 billion, or almost a third of the GDP of Lithuania.
In addition, the euro adoption will lead to 0.3–0.5 p.p. less interest rates for businesses and residents, while interest expenditure by 2022 will decrease by more than EUR 1 billion, or almost 3 per cent of GDP.
Increased export and decreased interest will drive a growth in economic activity and employment. Because of this, in the medium term Lithuania’s GDP level will be almost 2 per cent higher, while the unemployment rate was smaller by 0.4–0.5 p.p.
This international conference was organised by the Bank of Lithuania together with its partners — the European Central Bank (ECB), European Commission and the Republic of Lithuania Ministry of Finance. At the conference, presentations were read and insights shared of relevant issues of economics and finance by Mario Draghi, President of the ECB, Jyrki Katainen, Vice-President of the European Commission and Commissioner for Economic and Monetary Affairs, Algirdas Butkevičius, Prime Minister, Rimantas Šadžius, Minister of Finance, Ilmārs Rimšēvičs, Governor of the Bank of Latvia, upper-level heads from the European Parliament, International Monetary Fund and other guests.
The euro conference marks the most intense stage of the information campaign on the practical aspects of the euro adoption. On 1 January 2015 Lithuania will become the nineteenth member of the euro area, which unites almost 340 million people.
More Martynas Ambrazas (ELTA) photos
The full texts of the speeches can be found here