Euros in wallets

Euroland will grow larger after January 1, 2015, when another European country will be a member of the monetary union. It’s the turn of Lithuania, the third Baltic State to adopt the euro. Of the group of ten countries that joined the EU with Lithuania in 2004, with the great enlargement of the EU borders, Poland, Hungary, Czech Republic are not part of the common currency zone. Authorization to Vilnius by the European Council arrived in June, after having combed through its economic, financial and fiscal situation, but also under the impetus of the excellent performance given by Lithuania on the European stage as chair of EU’s rotating Presidency from June to December 2013. Strong determination. Although it ranks third in economic terms, behind the other two former Baltic Tigers – Estonia and Latvia – Lithuania is not lacking in determination. Hit by the crisis in 2008, the Country achieved recovery thanks to a severe austerity program that fell like an axe on the shoulders of all citizens. As expected, the consequences were very heavy on pensioners and on those perceiving minimum income (corresponding to less than 300 Euros per month, 430 today), while many young people have left the country – a real haemorrhage especially in the medical sector and among nursing staff – directed towards the United Kingdom or the neighbouring Norway (670 thousand emigrants). Joining the euro area – a mandatory requirement for EU member countries, stipulated in the Treaties – offers hope, as Finance Minister Rimantas Sadzius highlighted several times in recent months: “Lithuania, as a member of the euro zone, will receive increased confidence from its foreign partners, and thus the more the investments, the more favourable the loans, the lower the unemployment growth. This will lead to increased individual income.” The Lithuanian Central Bank had forecast a GDP growth of 3.3% in 2014, although a few days ago it reduced the rate to 3.1%, mainly as a result of the slowdown in transactions with Russia, that led to trade restrictions. Moscow is more far away. It is with regard to Russia that the currency is used in the current political discourse to place further distance between Lithuania and its cumbersome and dreaded neighbour. The first of the Baltic countries to be liberated from Soviet rule in 1990, Lithuania remained tied to Russia for reasons related to energy supply (almost total dependence on Russian gas), economy and trade (including tourism), not to mention the cultural bond to Russia, where 5% of its population come from. For President Dalia Grybauskaite “breaking free from the influence of the Russian giant is a matter of principle.” The Country delivered repeated messages of support to Ukraine in its fight against the pro-Russian front; injured and displaced Ukrainians were welcomed and treated in the Land of Lithuania; some press outlets also reported support for the Ukrainian cause with the delivery of weapons. Now the euro is a further statement of distance from Moscow. And together with the euro came the freedom from dependence on energy through the Floating Storage and Regasification Unit, (FSRU) not coincidentally named “Independence”, which since early December began operating in the port of Klaipeda to regasify liquefied gas imported from Norway’s Statoil, thus putting out of service the Gazprom pipelines: another goal pursued with great determination by President Grybauskaite. Those in favour and the sceptics. But when the euro is viewed “bottom-up”, at the level of those who must manage limited wages (the average salary for a university graduate is estimated at 750 euro), perceptions somewhat change. Indeed, the official website of the euro, set up by the Ministry of Economy, on December 15 published data from a survey whereby “53% of the population are in favour of the introduction of the euro, 39% are sceptical, 8 % indifferent.” Moreover, Fr Darius Trijonis, Secretary of the Lithuanian Bishops’ Conference, spoke to SIR Europe of the population’s “concern” over “future commodity prices.” Fr. Trijonis said: “In all the states that adopted the euro, prices increased immediately. People are worried only for this.” He added: “I read an article stating that according to a sociological study Lithuanians are more afraid of joining the euro zone than of the possibility of a war against Russia.” However, the experience of Latvia, which adopted the euro as of 1 January 2014, is encouraging: “Earlier this year, masses of Latvians used to come to Lithuania to do their purchases because everything was cheaper here. But after a year, people slowly began to feel better about it.” In any case, concluded Fr Darius, “everyone is awaiting 1 January. Then we shall see.” A “Memorandum of good business practices during the adoption of the euro” was drawn up to protect consumers. It is signed by 4,760 “businesses” pledging to act in justice (“not to use the pretext of the euro to increase prices and services”), responsibility (“rounding off prices according to trade-exchange”), transparency (showing clearly the prices in litas and euro; 1 euro equals 3.45 litas). From 1 to 15 January it will be possible to pay in litas and euros, but the change will be given in Euros. From 15 January onwards there will have to be only euros in people’s wallets.