Lithuania joins euro zone on January 1 2015
The stroke of midnight in Vilnius, ushering in New Year 2015, saw Lithuania become the 19th European Union member state to adopt the euro.
With Lithuania becoming part of the euro zone – on the 15th anniversary of the launch of the single currency in 1999 – about 337 million Europeans in 19 European Union countries share the same currency.
Valdis Dombrovskis, Vice-President of the European Commission responsible for the Euro and Social Dialogue, said: “I want to warmly welcome Lithuania to the euro. Lithuania’s accession marks the completion of the Baltic States’ journey back to the political and economic heart of our continent.
“This is a symbolic moment not only for Lithuania, but also for the euro area itself, which remains stable, attractive and open to new members. I am convinced that the Baltic States’ membership in the euro area will strengthen the economy of the region by making it even more attractive to businesses, trade and investment.”
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “In joining the euro, the Lithuanian people are choosing to be part of an area of stability, security and prosperity. Lithuania has a strong track record of sound fiscal policies and structural reforms, which have delivered some of the highest growth rates in Europe, coupled with steadily falling unemployment. The country is well-placed to thrive in the euro area.”
From January 1 2015, the euro will gradually replace the litas as the currency of Lithuania. There will be a dual circulation period of two weeks, during which the two currencies will be in use alongside each other in order to allow for a progressive withdrawal of Lithuanian litas.
When receiving a payment in litas, the change will be given in euro. This has been made possible thanks to thorough preparations ahead of the introduction of the single currency.
Commercial banks have received euro banknotes and coins in advance from Lietuvos Bankas, the Lithuanian Central Bank, and have in turn supplied euro cash to shops and other businesses.
A total of 900 000 starter kits with euro coins bearing Lithuanian national sides have been available to the general public since December1 . Moreover, 110 000 dedicated starter kits have been offered to retailers.
As of January 1, Lietuvos Bankas will exchange unlimited amounts of litas into euro at the official conversion rate (€1= 3.45280 LTL) for an unlimited period of time and free of charge.
Commercial banks will provide unlimited cash exchange services free of charge until 30 June 2015. Post offices will change litas cash up to the value of 1000 euro per transaction free of charge until March 1 2015.
Nearly all automatic teller machines in Lithuania will distribute euro banknotes within the first 30 minutes of January 1 2015. To facilitate the process, some banks have extended business hours.
On January 1, some 50 branches of the largest banks will be open during the afternoon. Several banks will deploy additional staff for cash operations in branches during the dual circulation period. Post offices will not open on January 1, but against usual practice will do so on the first weekend of January.
Prices have had to be displayed both in litas and euro since August 23 2014. This rule will apply at least until June 30 2015.
In order to address consumers’ concerns about price increases and abusive practices in the changeover period, a campaign on good business practice upon euro introduction was launched in August 2014.
It calls on businesses (e.g. retailers, financial institutions, internet shops) to commit via signature of a memorandum not to use the adoption of the euro as a pretext for increasing prices of goods and services, to apply the official conversion rate and rounding rules and to indicate prices in both currencies (litas and euro) clearly and understandably, and not to mislead consumers.
Compliance with the requirements for price display and conversion during the dual display period and the implementation of the ‘Memorandum on Good Business Practice upon the introduction of the euro’ is monitored in particular by the State Consumer Rights Protection Authority. It may impose fines and put the names of enterprises that do not observe the Memorandum on a publicly available “black list”.
(Photo: Gilles Letar)