Lithuania joins euro as tensions with neighboring Russia rise

January 1, 2015 06:34
1 minute read.

Lithuania joined the euro zone at the stroke of midnight on Thursday, hoping to anchor itself in Europe as its former master Russia flexes its military muscle in the region.

The first Soviet republic to declare independence, in 1990, Lithuania is the last of the three Baltic states to join the currency union and will be the last country to do so for the foreseeable future, with remaining European Union members at least two years, and probably much more, away.

"Myself, and I think, many of you feel sad that (Lithuania's currency) the litas, which has served us well for more than two decades, becomes history, but we have to move forward," Lithuania's Finance Minister Rimantas Sadzius told the euro launch ceremony.

The common currency remains a divisive issue, with polls showing half the population of 3 million still not convinced dumping the litas is a good idea.

Lithuania's Prime Minister Algirdas Butkevicius, who became the first person in the country to withdraw a 10 euro banknote from a cash machine, said the euro would "become a guarantor of both economic and political security."

The government hopes that by becoming the 19th member of the euro bloc, Lithuania's trade will get a boost and borrowing costs will fall to help the country to recover from a 15 percent contraction in 2009 at the height of the global financial crisis.

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