Lithuania enters the EurozoneJanuary 2, 2015
Hat: Lithuania becomes the 19th Member State to adopt the euro
Funding Scheme: 2015-01-01
Pgm2014 2020: Yes
After Lithuania adopts the euro at midnight tonight – on the 15th anniversary of the launch of the single currency in 1999 – some 337 million Europeans in 19 Member States will share the same currency.
This is a major achievement for Lithuania and for the euro area as a whole. Tomorrow, Lithuanians will start withdrawing euro cash and paying for their purchases in euro.
From tomorrow, the euro will gradually replace the litas as the currency of Lithuania. There will be a dual circulation period of two weeks, during which the two currencies will be in use alongside each other in order to allow for a progressive withdrawal of Lithuanian litas. When receiving a payment in litas, the change will be given in euro. This has been made possible thanks to thorough preparations ahead of the introduction of the single currency.
The introduction of euro cash
Commercial banks have received euro banknotes and coins in advance from Lietuvos Bankas, the Lithuanian Central Bank, and have in turn supplied euro cash to shops and other businesses.
A total of 900,000 starter kits with euro coins bearing Lithuanian national sides have been available to the general public since 1 December. Moreover, 110,000 dedicated starter kits have been offered to retailers.
As of 1 January, Lietuvos Bankas will exchange unlimited amounts of litas into euro at the official conversion rate (€1= 3.45280 LTL) for an unlimited period of time and free of charge. Commercial banks will provide unlimited cash exchange services free of charge until 30 June 2015. Post offices will change litas cash up to the value of €1,000 per transaction free of charge until 1 March 2015.
Nearly all automatic teller machines in Lithuania will distribute euro banknotes within the first 30 minutes of 1 January 2015. To facilitate the process, some banks have extended business hours. On 1 January, some 50 branches of the largest banks will be open during the afternoon. Several banks will deploy additional staff for cash operations in branches during the dual circulation period. Post offices will not open on 1 January, but against usual practice will do so on the first weekend of January.
The conversion of prices
Prices have had to be displayed both in litas and euro since 23 August 2014. This rule will apply at least until 30 June 2015. In order to address consumers’ concerns about price increases and abusive practices in the changeover period, a campaign on good business practice upon euro introduction was launched in August 2014. It calls on businesses (e.g. retailers, financial institutions, internet shops) to commit via signature of a memorandum not to use the adoption of the euro as a pretext for increasing prices of goods and services, to apply the official conversion rate and rounding rules and to indicate prices in both currencies (litas and euro) clearly and understandably, and not to mislead consumers.
Compliance with the requirements for price display and conversion during the dual display period and the implementation of the ‘Memorandum on Good Business Practice upon the introduction of the euro’ is monitored in particular by the State Consumer Rights Protection Authority. It may impose fines and put the names of enterprises that do not observe the Memorandum on a publicly available “black list”.
In its 2014 Convergence Report released on 4 June, the Commission concluded that Lithuania met the criteria for adopting the euro (for details of the assessment please see IP/14/627). On 23 July 2014, the EU Finance Ministers took the formal decision that opened the way for Lithuania’s adoption of the euro.
Thereafter, Lithuania started preparing the entry into the euro area by implementing its national changeover plan, providing all the details for the organisation of the introduction of the euro and the withdrawal of the litas. This set, for instance, the timetable for supplies of euro cash to commercial banks and to retailers, the rules for cash exchanges for citizens to be applied before and after “day one” of the euro, the strategy for adapting bank accounts, electronic payments systems and ATMs to the euro.
The preparations for the changeover have been complemented by a comprehensive communication campaign by the Lithuanian authorities. The European Commission and the European Central Bank have contributed to these efforts.
Url description: European Commission Press agency
Url info description: http://europa.eu/rapid/press-release_IP-14-2860_en.htm?locale=EN