1. Bulgaria Economic Forum Joining the euro: Lithuanian experience
Gediminas Šimkus
Director, Economics and Financial Stability Service
Bank of Lithuania
Sofia, Bulgaria
8 December

2. Consistent policy direction for Lithuania
~70% exports to the EU,
~50% — to the euro area.
May
2004
Currency Board Arrangement
$ 1994
€ 2002
ERM II
(June 2004)
January 2015
~80% of FDI from the EU,
~45% — from the euro area
Integration into the European structures
Ensured exchange rate stability seeking price convergence and stability in the longer run
Strengthened policy discipline and economic flexibility
Natural step forward

3. ERM II – testing phase ERM II Lithuania in ERM II
June 2004 – December 2014
ERM II
Commitments
1 € = LTL
Balanced budget over the medium term
Credit growth
Effective financial supervision

4. Compliance with criteria: in a durable way
2006
2014
% 12 month moving average

5. European decision making
April
Assessment dates Law compatibility & Economic data
June
Convergence Reports (European Commission and ECB)
European Commission proposals
July
Opinions: ECB & European Parliament
EU Council’s meeting: final decision

6. Euro adoption: strategy & timing
National Changeover Plan
Public information and communication strategy
Action plan
Law on the Introduction of the Euro in Lithuania
June 2013
June 2013
December 2013
Post- Council decision

7. Euro adoption is HUGE project
Commission
(Chaired by PM)
Coordinating WG (Chaired by MoF)
Working Groups
Business Environment
(MoE)
Consumer Rights Protection and Social Affairs
(MoSSL)
Legal Issues
(MoJ)
Public Information
(BoL)
Cash Changeover
Compliance with Economic Convergence Criteria
President
Parliament

8. Lessons learnt Work hard and win public support at home
Make sure there is a strong support among politicians
Read carefully the reports of European authorities
Have an “experienced country” to assist you
Invest in networking

9. Public opinion – key support
“A European Monetary Union with one single currency, the euro ... “
Source: Eurobarometer

10. GDP larger by 1.9% Impact through various channels
Interest rates
Foreign exchange and settlement costs
Investment and
foreign trade
GDP in the medium and long terms
Consumption
Investment
Impact through various channels
Net export
Impact on
the price level
One-off costs of the euro adoption
Financial contributions

11. Thank you!