Lithuania, which will adopt the euro on Jan. 1, should feel positive effects of the new currency in three to five years. However, the new currency will bring both positive and relatively negative changes, an analyst with SEB Bankas, the largest Lithuania’s commercial bank, says.
Gitanas Nausėda
© DELFI / Valdas Kopūstas

“Now we have to be patient and wait three to five years. Then we will really see and feel the positive effects of euro adoption, will become a member of a powerful common currency area and will be less vulnerable externally to certain potentially unfriendly states,” Gitanas Nausėda, an adviser to the president of SEB Bankas, told BNS.

The main positive aspects of having the euro will include increased activity of foreign investors, lower borrowing costs and improvements in Lithuania’s image, he says.

“Borrowing costs will decrease, since Lithuania will be seen as a more reliable borrower. Lithuania’s name will be associated with lower political and financial risks,” Nausėda said.

The adoption of the euro would also bring several negative consequences, which, however, should not produce any major effects, he said.

“Practically and theoretically, Lithuania will lose the possibility to solve its problems through the devaluation of its currency. However, we have not used this way to solve our problems for 20 years. Another thing is the additional injections, which will be required from Lithuania as a contribution to the EU’s stability mechanism and the capital of the European Central Bank,” Nausėda notes.

He pointed out that contributions to the Union’s stability instruments should not be considered as costs, since those were contributions to funds, which Lithuania would be able to use freely if the country’s financial situation were to deteriorate.

BNS
Naujienų agentūros BNS informaciją skelbti, cituoti ar kitaip atgaminti visuomenės informavimo priemonėse bei interneto tinklalapiuose be raštiško UAB "BNS" sutikimo neleidžiama.

Initiative to tax bank assets stalls in Lithuanian parliament

The Lithuanian parliament decided on Tuesday not to debate – at least not for now – a proposal to...

US tariffs to affect 0.12 pct of exports to US

US tariffs on 7.5 billion US dollars’ worth of EU goods, imposed by President Donald Trump last...

SBA to produce modular apartment buildings

The SBA Group, one of Lithuania’s largest corporate groups, has taken the decision to enter a new...

Multifunctional car park is nearing completion at Vilnius airport

Construction of a modern multifunctional car park commenced at Vilnius airport last year is nearing...

New success for Vilnius: ranked No.1 by Financial Times

Financial Times ’ fDi Intelligence division announced the list of 30 cities that have attracted the...