Lithuania should be ready for Euro by 2014, but is it worth joining?
Posted by editor on 2/23/10 • Categorized as Business and Policy, Economy Watch • 
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The Government discussed Lithuania’s updated draft “2009 convergence programme”. The Ministry of Finance issued a statement saying that Lithuania aims to reduce its public sector deficit to 3 pct of GDP by 2012, and adopt the Euro by 2014.
According to the statement the public debt is currently forecast to be 36.6 pct of GDP in 2010, 39.8 pct in 2011 and 41 pct in 2012.
Lithuania’s public sector deficit in 2009 is expected to be above 9 pct. In the programme the Cabinet aims to lower Lithuania’s public sector deficit to 8.1 pct of GDP in 2010, then cut it to 5.8 pct in 2011 and reach 3 pct by 2012.
However, interestingly enough, the pro-business daily Verslo Zinios on 17 February warned Lithuania that in the light of the current public sector deficits in some of the Euro member states, we should not expect to adopt the Euro in the near future.
The daily said, ‘We have to ask ourselves if we have to rush into the Euro countries’ embrace. The majority of theirs budget deficits and public sector deficits, as a percentage of GDP, are bigger than Lithuania’s. It is possible that in the medium term the Litas might be stronger than the Euro.’
The daily concludes that, ‘In any case Lithuania should get ready not only to introduce the Euro but also prepare a plan of not introducing the Euro. This is the first time when the business daily so explicitly doubted Lithuania’s aim to adopt the Euro.
(2 votes, average: 4.00 out of 5)
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