On New Year’s Day, Lithuania woke up as a full member of the euro area. This is a memorable event for both Lithuania and the euro zone. For the people of Lithuania it means saying ‘goodbye’ to the litas and ‘hello’ to the euro. And for me it means giving a warm welcome to the three million Lithuanians whose hard work and determination have made this major step possible.
I can understand that some Lithuanians may be wondering about the implications of joining the eurozone. So it is worth recalling what the euro stands for. After Estonia and Latvia, Lithuania has become the nineteenth member of a currency union with over 330 million inhabitants. You have joined the world’s second-largest economy, which accounts for a quarter of global exports and over 15% of global investment.
The ongoing enlargement of the euro area reflects the attractiveness of the euro, even in difficult times. We have seen over time that the euro offers considerable advantages to both companies and citizens, because it assists trade and investment. It also irrevocably eliminates exchange rate uncertainty and transaction costs, facilitates travel in the euro area and simplifies price comparison.
Crucially, joining the euro area will enable Lithuania to have a fair say in decisions on issues that have already been influencing its economy. It is about to experience the much improved governance structure of the euro area. This new structure provides many opportunities to learn from one another’s experiences, and I dare say Lithuania will have a lot to offer in this respect. In recent years Lithuania has achieved impressive results, showing remarkable resilience in the way it has bounced back from the financial crisis. With sound public finances and an impressive record on reform, our latest member of the euro area serves as an inspiration for many others.
The lesson I draw from Lithuania’s achievements is the importance of sticking to a plan that works. They confirm that the euro area should continue with the structural reforms needed to create viable economies and sustainable growth. Over the last year we completed the European Banking Union, which ensures stable financial markets. It provides European supervision and swift and effective resolution if financial institutions get into trouble. In the coming year we will continue reforming our economies in a sustainable way.
In short, the major step taken by the Lithuanian people at the start of 2015 will benefit both your country and the euro area. I cannot think of a better reason to celebrate the arrival of the New Year.
