Lithuanians adopted the euro 10 years ago. Despite public concerns, the European currency turned out to be crucial for Lithuania in difficult times. It also attracted foreign investors, says economist Indres Genyte-Pikciene, quoted by Elta agency.
The euro was introduced by Lithuania January 1, 2015. According to Indres Genyte-Pikciene, chief economist of Siauliu bankas, the euro helped Lithuania survive the crises of recent years. The expert added that thanks to the common currency, Lithuania has become an attractive country for foreign investors – wrote the Lithuanian news agency Elta.
10 years since Lithuania adopted the euro
– Currency and affiliation euro zone brought very significant benefits to Lithuania. This is a form of serious recognition that the economy is developing in a sustainable way and that debts are under control. Over the last decade, Lithuania has been one of the leaders in attracting foreign direct investment, Genyte-Pikciene said in an interview with the Lithuanian news agency ELTA.
According to the economist, Lithuania gained most from the reduction of the currency risk factor, which led to lower loan prices and the elimination of currency exchange costs.
The expert stated that the price increase, which critics point to as the biggest disadvantage of introducing the euro, was not higher than the increase in wages.
– Wages have increased 2.5 times over the last decade, we also see that pensions grew at a similar rate while inflationwhich is usually considered the main disadvantage of introducing the euro, in the case of Lithuania did not differ from the indicators recorded in other Central and Eastern European countries that did not introduce the euro, said Genyte-Pikciene.
– The price increase over the decade was only one and a half times (50 percent – editor). In countries such as Poland, Hungary, Romania Whether The czech republic price indices also increased at a similar rate. In Poland it was the same as in Lithuania, in Romania prices increased by 53 percent, in the Czech Republic – 53 percent, and in Hungary – even by 68 percent – she explained.
Euro introduced by Lithuania
Another important advantage of the euro, according to the economist, is stability, which is very important for a small and open economy such as Lithuania.
The expert emphasized that shocks on external markets may have significant negative consequences for Lithuania, but, as the experience of recent years has shown, they have been largely avoided.
– Each of these elements of stability – sustainable public finances, a controlled current account and the rejection of currency risk – are very important safeguards that have helped our economy respond successfully and flexibly to the challenges of recent years – she said.
Lithuanians about the euro
On the website of the Bank of Lithuania, its chief economist Linas Jurksas emphasized that Lithuanians' support for the euro has changed over the years (in 2015 it was 55 percent of the population).
“There is no doubt that the euro helped the Lithuanian economy survive the pandemic, made government loans cheaper and allowed citizens to feel part of the democratic Western world more quickly,” Jurksas said.
In an article published at the end of 2021 on the website of the Lithuanian Central Bank, it was indicated that over the last two years (i.e. compared to the period before the Covid-19 pandemic), Lithuanians' favorable attitude towards the euro increased by 15 percentage points, which is the highest increase among all euro zone countries. It was also reported that 64 percent respondents said that the euro was positive for Lithuania, and 83% said that the euro was good for the EU as a whole.
“For Lithuanians, having the euro also turned out to be very beneficial when shopping in Poland. And they have been doing it since the beginning of the transition to the common currency. For years, Polish prices were lower than in Lithuania, and there was a rich commercial offer in the border towns and cities of Podlasie – Sejny , Suwałki or Augustów, where they most often came for shopping,” “Rzeczpospolita” reported.
The newspaper added that “the sentiment for domestic litas is still alive in Lithuania” and that “to this day, Lithuanians keep litas at home” and “according to the estimates of the Bank of Lithuania, it is equivalent to approximately EUR 150 million.” “This mainly concerns the older part of society. Litas can still be exchanged for euro, although not all denominations,” wrote “Rz”.
When is the euro in Poland?
In the December report “Convergence Monitor with Economic and Monetary Union”, Polish Ministry of Finance stated that Poland's membership in the euro zone could be a source of disruptions in the economy. The position presented is the same as in previous reports.
Less than 31 percent of Poles support the introduction of the euro instead of the zloty in Poland – according to a survey reported by “Rzeczpospolita”. The daily pointed out that Poles' approach to the European currency differs significantly from the EU average.
When could the euro be introduced in Poland instead of the zloty?
– We could seriously talk about joining the euro zone in a decade – said Marek Zuber, an economist from the WSB Academy, in an interview with the tvn24.pl business editorial team.
In his opinion, when we meet all the criteria and get closer to the richest countries, adopting the euro in Poland will be profitable.
Main photo source: LarysaPol/Shutterstock