the euro area will welcome a new member: Lithuania. The European Commission,as well as the ECB (European Central Bank) have validated the accession of Vilnius who thus joins the 25 countries of the Economic and Monetary Union. Among the 28 member countries of the European Union, the only two not belonging to the Euro area are Great Britain and Denmark.
Lithuania will therefore abandon the “Litas”, its official currency since over 90 years. On 28 June 2014, the exchange rate is 1 Euro for 3,4528 Litas. The Ministers of Finance of the European Union will meet in July 2014 to ratify this new accession in a definitive manner. With the integration of Lithuania, the Euro area will count 336 million residents with a GDP of almost 7 000 billion Euro.
The accession of the Baltic state will be of considerable consequence for the European Central Bank: the Governing Council will thus reach a size claiming for the establishment of a new voting system. The 19 Governors will be divided into two groups, according to the size of the respective countries’ economies, aiming to ensure effective decision-making within the European Central Bank.
Although Lithuania meets the convergence criteria enforced at European level, the development of its inflation remains under observation. The Central Bank calls in particular on Vilnius for reforms of its taxation and of its labour market.