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Why Lithuania entered the eurozone now?

Posted on by in Business

While Greece is near the exit door and the prophets of the doomsday are predicting the immediate collapse of the european currency, Lithuania enters the eurozone and sends the litas, its loved independent currency, to the history’s books. Is it because the stability of the currency? Due to the commercial benefits of being in the euro?  It’s just a question of politics? Probably, the answer is a mix of these three (and other minor) causes but the reality is that more and more countries want to be in the eurozone and no one wants to exit. And even more, after the first experiments, now the europeans institutions have experience and accurate methods to change the currency of a whole country in a few weeks without trauma.

Euro in Lithuania

After the first two days with their new currency, 25% of citizens polled said they already had only or mostly euro banknotes in their wallet.

According to the most recent Commission survey[2], on 3 January, 59% of cash payments in shops were still made in Lithuanian litas only (down from 84% on 2 January), in order to use the old currency in shops rather than having to go to a bank to exchange them. However, 36% of those polled already paid in euro only, which is a very high figure compared to previous changeovers.

Commercial banks had received euro banknotes and coins in advance from the Bank of Lithuania and had in turn supplied euro cash to shops and other businesses, so that they can handle payments and return change in euro as from the first changeover day. The successful advance supply of cash enabled a very high number of retailers to provide change in euro only. On the third day of the changeover, 89% of customers were getting their change in euro. This is important in order to withdraw the old Lithuanian litas from circulation as quickly as possible.

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