2006-05-16
The Convergence Report (May 2006) published by the European Central Bank (ECB) today, the 16th of May, presents the progress of Lithuania in meeting its obligations related to the participation in the Economic and Monetary Union, where the single currency euro is used.
The first chapter of the ECB Convergence Report reviews the results of economic convergence, while the second chapter assesses compliance with the requirements of the European Community law in this area.
According to the Report, during the period under review the average annual inflation in Lithuania was slightly higher than the reference value of inflation calculated according to the provisions of the Treaty establishing the European Community.
Mr. Reinoldijus Sarkinas, Chairman of the Board of the Bank of Lithuania, paid attention in his comments on the Convergence Report that Lithuania succesfully complied with all requirements for the adoption of the euro, with the exception of the inflation requirement.
„I think that Lithuania did everything possible to ensure that the euro is adopted smoothly in the beginning of the next year. And it was done honestly. The Lithuanian institutions did not reduce inflation artificially, using administrative or other means, since it would have had negative consequences in the future“, noted the Chairman.
Mr. Sarkinas mentioned that it would be useful to discuss the procedure for the calculation of the reference value in the future to avoid ambiguities and doubts.
The ECB Convergence Report notes that the Constitution of the Republic of Lithuania and the Law on the Bank of Lithuania complies with the requirements of the Treaty and the Statute of the European System of Central Banks (ESCB) on the third stage of the Economic and Monetary Union after the recent amendments.
It is planned that the subject of the adoption of the euro in Lithuania will be discussed by the European Council in June, and the decision will be made by the Council of the European Union (EU) after assessing the Convergence Reports of the ECB and the European Commission (EC) and the EC proposal.
According to Mr. Sarkinas, if the EU institutions do not make a decision on the adoption of the euro in Lithuania on 1 January 2007, the aim of Lithuania to adopt it immediately, as soon as possible, will not change, since the single currency will enable a more rapid convergence of Lithuania and its population with the standard of living of the older EU states.
The head of the central bank has also indicated that the preparatory tasks for the adoption of the euro will be continued, however, it is still too early to talk about the new date for the adoption of the euro in Lithuania.
„We have to wait for the final decision of the European Union institutions, and, if the adoption of the euro is postponed, conduct a comprehensive analysis of the new economic data, make the forecast of the macroeconomic indicators and plan the new real date after the assessment of all aspects“, said the head of the Bank of Lithuania.
The Convergence Report (May 2006) was prepared by the ECB on the requests of Slovenia on 2 March 2005 and Lithuania on 16 March 2005 for the assessment of compliance of the countries with the requirements for the adoption of the euro.
On the request of the institutions of Lithuania and Slovenia, the convergence reports on these two countries by the EC is also published today, 16th of May.
The ECB Convergence Report is available at the websites of the ECB and the Bank of Lithuania.