On June 10th European Business Network held a seminar on the euro introduction in Lithuania. The participants discussed the true benefits and practical challenges when the new currency is planned to be introduced in the beginning of 2015.
The first speaker Julda Kielyte, Economist Analyst, Monetary policy, exchange rate policy of the euro area, ERM II and euro adoption gave a presentation on Convergence and euro adoption prospects: where do we stand?
She said that Lithuania is committed to adopt the euro and the enlargement of Euro area is a continuous process. The benefits of euro include policy discipline, macro stability, increase trade, attract foreign direct investment, complete the internal market and reduce the risk premium.
The lesson to take away from her speech is that euro area is an open process. While other countries are postponing the adoption of euro, the short challenge of weak growth in 2013 is not an excuse to miss a chance of introducing it to Lithuania in 2015.
The second speaker Estonian Ambassador to Lithuania Toomas Kukk talked about Estonian experience and social aspects before and after the introduction of euro.
First of all, he congratulated Latvia for introducing euro in 2014. Then he proceeded to speak about the positive story of the euro in Estonia and how nobody today is questioning the choice to adopt it.
Before the introduction many Estonians were concerned about the exchange rate of changeover to the euro and the continuity of contracts, impact of adoption of euro on prices, cash exchange, safety of cash exchange, economic crisis and the timing of euro changeover and the loss of national symbol – the Estonian krona.
Estonian government took a number of measures to ease these concerns. They included a fair pricing agreement, retailers being obliged to publish the prices of goods in euros as well as in krona, stickers on doors and windows of companies that were just in setting their prices. Also Estonians received brochures with euro facts and a krona to euro calculators.
In addition, it was made available to order euro coin starter kits. According to T. Kukk, euro in Estonia is a success story, because it attracted investment, increased confidence of the economy and people, made traveling more convenient and created many other benefits.
The third speaker, Vilma Tamošiūnaitė-Bulkienė, and Associate Attorney bnt attorneys-at-law talked about legal points: keys issues for commercial contracts after euro introduction in Lithuania.
She stressed two points: there are no problems with the continuity of commercial contracts and the conversion of litas to euros.
The fourth speaker, Paulius Antonovas, Head of cash management at AB DNB bankas talked about ways of effective and cost efficient euro funds management.
He showed new trends of cash flow speed, automation and other factors and introduced the listeners to SEPA (Single Euro Payment Area), which makes the whole area to use the same payment instrument, which everybody understands in a same way across all countries.
According to P. Antonovas, SEPA increases competition and an amount of service providers. A person needs only one account, its simple, saves time and costs.
The fifth speaker was Rūta Rodzko, Director, Economics and Financial Stability Service, Bank of Lithuania.
She explained the preparation for euro introduction – institutional perspective and stated the core dates – May 2014, when European Commission and European Central Bank publish the convergence reports and recommendations, then in July 2014 ECOFIN states it's decision and in January 1st of 2015 Lithuania is expected the changeover.
Lietuvos bankas is preparing strategic documents, these include: National Changeover Plan, Public Information and Communication Strategy, Action Plan and the Law on the Introduction of Euro in Lithuania.
R. Rodzko believes that Lithuania should be able to meet all Maastricht criteria and the only challenge is the government finances, which might need a strong action for the parliament.
The sixth and final speaker Jekaterina Rojaka, Chief Economist at AB DNB bankas presented her outline on Lithuania and euro: whether to join in 2015.
She expressed a pity that the ruling party has to reject its social democratic policies in order to adopt the euro and she was not optimistic about Lithuania meeting the inflation criteria.
Introducing euro in 2015 J. Rojaka called a moving target, because the conditions of meeting Maastricht criteria are not only in the hands of Lithuania.
EBN reporter Edgaras Savickas