BRUSSELS, 06-1-2015 — /EuropaWire/ — On 1 January 2015 Lithuania became the 19th member state of the euro area, with euro coins and banknotes entering circulation on the same day. The country joined a number of euro area institutions and euro-related governance structures.
Donald Tusk, President of the Euro Summit and of the European Council, warmly welcomed the people of Lithuania to the euro area.
In his words, joining the euro area “will attract investment and help companies grow. It will mean more security and stability as well. And it will make life easier for ordinary citizens, for example, when travelling or buying on-line”.
As of 1 January Lithuania is member of the euro area’s central banking system – the Eurosystem, which is composed of the European Central Bank and the national central banks of the eurozone member states.
In addition, Lithuania automatically became a member of the banking union, the EU-level banking supervision and resolution system, established last year.
The chairperson of Bank of Lithuania’s governing board is now a member of the Governing Council of the European Central Bank. Lithuania’s finance minister will participate in the Eurogroup meetings, and the country’s president will join the Euro Summit meetings.
The first Eurogroup meeting, in which Lithuania will participate as a full member, will take place on 26 January 2015.
Lithuania will also become a shareholder of the European Stability Mechanism, which was established to safeguard financial stability in Europe by providing financial assistance to euro area countries, if necessary.
Eurogroup President Jeroen Dijsselbloem said: “Over the last years Lithuania has achieved impressive results, showing remarkable resilience in the way it has bounced back from the financial crisis. With sound government finances and an impressive record on reform, our latest member of the euro area serves as an inspiration for many others”.
‘Big bang’ scenario
Lithuania chose the so-called ‘big-bang’ scenario for the adoption of the euro, which meant introducing the euro coins and banknotes on the same day as it joined the eurozone. This scenario has been chosen by all the EU member states that have joined the euro area since 2002.
The period of dual circulation – the time duting which both the euro and the national currency (litas) can be used to pay for goods and services– is 15 calendar days.
The irreversible conversion rate was decided by the Council in July 2014 – it has been set at 3.45280 litas to 1 euro. This is the same as the central rate of the litas in the EU’s exchange rate mechanism, which the Lithuanian currency joined in 2004.
The Bank of Lithuania will change unlimited amounts of litas into euro for an unlimited period of time and free of charge.
According to the Bank of Lithuania, 370 million euro coins and 132 million euro banknotes of various denominations were needed to replace the litas coins and banknotes in circulation, and for the stocks that are considered necessary in 2015.
The national side of the euro coins – the historic coat of arms
The reverse of the Lithuanian euro coins will feature Vytis – an armoured knight on a horseback, which is also the symbol on the coat-of-arms of Lithuania. It has featured on Lithuanian coins since the 14th century, and was first recorded as the coat-of-arms symbol in 1366.
The choice of Vytis for the euro coins was made by the population of Lithuania in an opinion poll organised by the Bank of Lithuania as long ago as 2004. The design is by sculptor Antanas Žukauskas, and the coins were minted by the Lithuanian Mint, which started this work following the Council of the EU decision in July 2014.
The euro coins are produced by the euro area member states, according to the volumes approved by the ECB each year. Many countries produce them in their national mints.
Membership of the eurozone
All EU member states, except Denmark and the UK, which have the opt-out clauses, have committed to joining the euro. A country is considered ready to join the euro area once it meets the so-called ‘convergence criteria’.
A country’s preparedness is assessed by the European Commission and the European Central Bank in the ‘convergence reports’. The Council adopts the relevant legal acts related to the adoption of the euro, based on the Commission’s proposal and a recommendation by the euro area member states. It decides after having consulted the European Parliament and following a discussion in the European Council.
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