Lithuania will join the euro area in the beginning of next year, joining 18 member states including Malta.

The European Commission decided to make the recommendation yesterday after the Baltic state attained the entry criteria, including a low deficit and decreasing levels of debt.

The final decision, normally just a formality, will be taken in the second half of July by the EU’s finance ministers following the endorsement by the heads of State and of government during their next summit later this month.

Welcoming the decision, the European Commissioner for Economic and Monetary Affairs, Olli Rehn, said that Lithuania’s readiness to adopt the single currency reflected its long-standing support for prudent fiscal policies and economic reforms.

“The reform momentum, driven in part by Lithuania’s EU accession 10 years ago, has led to a striking increase in its prosperity. The country’s per capita GDP has risen from just 35 per cent of the EU average in 1995 to a projected 78 per cent in 2015,” he said.

At the same time, in its assessment on seven member states’ readiness to join the euro, the Commission found that Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania and Sweden did not fulfil all the criteria. Their situation will be reassessed in two years’ time.

Malta joined the euro in 2008. All EU member states, except the UK and Denmark, are committed by the Treaty to adopt the euro once they fulfil the necessary conditions.

These conditions include four stability-oriented economic criteria regarding the government budgetary position, price stability, exchange rate stability and convergence of long-term interest rates that need to be fulfilled in a sustainable manner.