June 11, 2014
After obtaining green light from the Commission and the ECB small Lithuania is almost certain to get confirmation by the EMU finance ministers and join the EMU next January.
This has been expected to happen for a long time. Lithuania has carefully prepared for it, especially by early tying its currency to the Euro and putting its financial house in order.
Estonia and Latvia having preceded it in 2011 and 2013 its decision to join was a logical consequence. After all, the three tiny robust Baltic economies have demonstrated an amazing capacity to adapt to economic stress. It would have been strange for one of them to stay outside the EMU and continue keeping its national currency.
Lithuania considers the adoption of the EU currency also as a demonstration of its strong ties to Europe.
The Lithuanian prime minister Butkevicius has therefore called the decision to join “one more step
toward deeper economic, financial and political security”.
Will other EU members follow in the next few years? All of them have to join one day under the terms of the Treaty, except for the UK and Denmark which have negotiated a derogation to stay outside”.
It is only a question of timing and political will. Joining the the Euro zone has not been very popular during the years of financial crisis. In many EU countries the Euro has suffered from often unjustified attacks. It has been made responsible for national economic difficulties and most recently for the admirable price stability. The increasing talk about the of deflationary threats by the Central Bank has not made the Euro more attractive.
Sweden, Poland, Hungary and the Czech Republic, confronted with domestic opposition, feel they can do without membership. Others are not yet ready economically.
We should therefore not expect a rush for membership in the coming few years. The EMU can very well do with only 19 members and should refrain from being pushy.
But the time will come when the countries on the side line that fulfill the conditions for membership like Sweden should discreetly be called to duty.
Eberhard Rhein, Brussels, 8/6/2014Author : Eberhard Rhein