The IMF report indicates that Lithuania’s next year’s transition to the euro – the litas has been pegged to the euro at a fixed rate since 2002 – will not bring about any “visible” changes, but will provide a few macroeconomic benefits to the country, writes LETA/ELTA, referring to Invest Lithuania.According to Fund’s experts, membership of the euro area will ensure access to European Central Bank funds. This will reduce the risk rating of the country and will likely make borrowing cheaper. Furthermore, membership in the euro area should help the country to attract more foreign investment and open up more opportunities for local companies to join international business chains, provided the parties observe a reasonable economic policy. The IMF forecasts that the country’s GDP will increase by 3.5% this year and after 2014 should gear up to 3.75%, provided sustainable investment growth is maintained, the country continues its reforms and maintains fiscal discipline.
Jeff Nelson, vice president of U.S. company Strategic Staffing Solutions, which has a staff recruitment branch in Vilnius, says that adoption of the euro in 2015 in Lithuania is a very important structural step. The euro allows international investors to save as currency exchange tax and the national currency risk are eliminated and also because common European standards are implemented in the country.
On the one hand, he does not believe that the introduction of the common European currency will somehow magically affect the country’s appeal. (more)
Read the whole story here: http://www.baltic-course.com/eng/analytics/?doc=88901
Source: The Baltic Course