Lithuania and the euro

Lithuania is an EU member state which joined the Eurozone by adopting the euro on 1 January 2015.

This made it the last of the three Baltic states to adopt the euro, after Estonia (2011) and Latvia (2014). Before then, its currency, the litas, was pegged to the euro at 3.4528 litas to 1 euro.

History

All members of the European Union, except Denmark and the UK, are required by treaty to join the euro once certain economic criteria have been met. The Lithuanian litas participated in ERM II since 28 June 2004, and was pegged to the euro at a rate of 3.45280 litai = €1. Lithuania originally set 1 January 2007 as their target date for joining the euro, and in March 2006 requested that the European Commission and the European Central Bank conduct an assessment on their readiness to adopt the currency. The Commission's report found that while Lithuania met four of the five criteria, their average annual inflation was 2.7%, exceeding the limit of 2.6%. As a result, the Commission concluded that "there should be no change at present to Lithuania's status as a Member State with a derogation." Lithuania is the only country initially to have been denied approval to adopt the euro after requesting a convergence check.

Lithuania

Coordinates: 55°N 24°E / 55°N 24°E / 55; 24

Lithuania (ⁱ/ˌlɪθjuːˈeɪniə/; Lithuanian: Lietuva [lʲɪɛtʊˈvɐ]), officially the Republic of Lithuania (Lithuanian: Lietuvos Respublika), is a country in Northern Europe. One of the three Baltic states, it is situated along the southeastern shore of the Baltic Sea, to the east of Sweden and Denmark. It is bordered by Latvia to the north, Belarus to the east and south, Poland to the south, and Kaliningrad Oblast (a Russian exclave) to the southwest. Lithuania has an estimated population of 2.9 million people as of 2015, and its capital and largest city is Vilnius. Lithuanians are a Baltic people. The official language, Lithuanian, along with Latvian, are the only two living languages in the Baltic branch of the Indo-European language family.

For centuries, the southeastern shores of the Baltic Sea were inhabited by various Baltic tribes. In the 1230s, the Lithuanian lands were united by Mindaugas, the King of Lithuania, and the first unified Lithuanian state, the Kingdom of Lithuania, was created on 6 July 1253. During the 14th century, the Grand Duchy of Lithuania was the largest country in Europe; present-day Lithuania, Belarus, Ukraine, and parts of Poland and Russia were the territories of the Grand Duchy. With the Lublin Union of 1569, Lithuania and Poland formed a voluntary two-state union, the Polish–Lithuanian Commonwealth. The Commonwealth lasted more than two centuries, until neighboring countries systematically dismantled it from 1772–95, with the Russian Empire annexing most of Lithuania's territory.