Lithuania on track for 2014 euro target

Lithuania is on track to meet its target of adopting the euro in 2014, the head of the Eurogroup of finance ministers said.

“I am very confident that Lithuania will be able to meet the targets Lithuania was giving itself,” Jean-Claude Juncker, who is both the Finance Minister and the Prime Minister of Luxembourg, told journalists in the Baltic state’s capital Vilnius.

“The accession of Lithuania to euro area is well under way,” Mr Juncker said, speaking alongside Lithuania’s Prime Minister Andrius Kubilius.

“The decision will be made on the basis of the fulfillment of the accession criteria,” he added.

The Eurogroup gathers the finance ministers of the 17 member states of the 27-nation European Union to have so far adopted the common currency.

Mr Juncker said the eurozone’s current woes should not discourage Lithuania from seeking to switch.

Ex-Soviet Lithuania, which joined the EU in 2004, had hoped to adopt the euro in 2007 but failed narrowly to meet the entry criteria.

After its booming economy went off the rails in the face of the global crisis, Lithuania was forced to push its target back to 2014.

The economy of the nation of 3.2 million is gradually recovering, but Mr Kubilius said his centre-right government would maintain crisis-linked austerity measures in order to make sure Lithuania made the eurozone grade.

A key hurdle for would-be eurozone members is to keep their public deficits – the gap between state spending and revenue – below three per cent of gross domestic product. That can be tough during an economic crisis.

“In the last two years we had to tackle big challenges in order to have a clear perspective on cutting the deficit below three per cent in 2012 so that we could join the eurozone in 2014,” Mr Kubilius said.

Last month, Lithuania’s President Dalia Grybauskaite had said that the country could be forced to shift its target in order to avoid overly-harsh pension cuts.