Lithuania Clears First Hurdle On Track To Euro Adoption

Lithuania may become the next European country to adopt the euro currency after the European Commission on Wednesday gave its initial approval to the Baltic state.

After previously failing to meet the commission’s standards for euro adoption because of too-high inflation, Lithuania now meets those conditions and has received a preliminary nod from the European Union and the European Central Bank, Reuters reported.

The decision comes at a time when Lithuania and its fellow Baltic states Latvia and Estonia are, as well as the broader EU, facing pressure to boost security cooperation and political solidarity in response to Russia’s annexation of Crimea and further meddling in Ukraine.

"This also helps us to secure additional resources for our security matters and to fulfill our obligations as a member of NATO," Lithuanian President Dalia Grybauskaite told Reuters last week.

The European Central Bank said that Lithuania needs to keep prices stable and to increase domestic energy production to stay on track.

"It may be difficult to control domestic prices pressures and avoid economic overheating in an environment of fixed exchange rates," according to an ECB report quoted by Reuters.