Lithuania adopts the euro

By bne IntelliNews January 5, 2015

Lithuania became the last of the Baltic States to adopt the euro on January 1, making another step to strengthen ties with Europe as geopolitical tensions rise in the region.

The euro is coming to a country that is expected to post economic growth of 3.1% in 2015, according to an estimate from the Bank of Lithuania, which revised its outlook from 3.3% in September. Long term, the euro is forecast to add 1.3% to GDP.

For now, however, Lithuania has a number of immediate issues to attend to. With the adoption of the common currency, Lithuania hopes to attract investment, as well as improve borrowing conditions. Underinvestment in particular is seen as a factor to deal with, suggests Swedbank. Another problem is the shrinking labour force. 

The agricultural sector continues to be influenced by Russia’s embargo on food produce, which has also hit the transport sector. Russia is also seen a bigger threat of late after it invaded Ukraine, having prompted Lithuania and its two other Baltic neighbours to increase defence spending, while trying to speed up severing whatever dependencies on Moscow may still exist. 

The reception of the euro amongst the population has been lukewarm at best, with polls showing approximately half of the country opposed to the switch over.

Related Articles

Lithuania calls for further committments from Gazprom to end EU anti-trust case

Gazprom’s commitments to lessen the impact of its dominant position as a supplier of gas to Lithuania and other CEE countries are not sufficient and the European Commission should ensure they are ... more

Russia offers Latvian port a slice of the Nord Stream pie

The Latvian port of Ventspils has been asked to store and handle delivery of pipes for Nord Stream 2, the controversial Russian gas pipeline project, the chairman of the port said on April 20. The ... more

Latvia opens its gas market as it seizes control from Russia

The Latvian gas market opened up to liberalisation on April 3 following entry into force of a number of legal changes. Riga has fought hard to end control of the gas transmission and storage ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Dismiss