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Lithuania pushes ahead on euro amid insecurity over Russia

17 April 2014, 12:37 CET
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(VILNIUS) - Lithuania on Thursday moved one step closer to joining the eurozone, as concerns over Soviet-era master Moscow give it all the more reason to firmly root itself in the West.

Eighty-seven lawmakers in the 141-seat parliament voted in favour of legislation regulating currency exchange and price displays, while seven were against and 13 abstained.

"Deeper integration boosts the country's security and increases Lithuania's political weight in Europe and on the international stage," Prime Minister Algirdas Butkevicius said in a statement.

Lithuania is following in the footsteps of fellow Baltic neighbours Estonia and Latvia, which joined the eurozone in 2011 and 2014.

Economists say the nation of three million people meets the single currency bloc's tough targets on deficits and inflation, and that the European Union is likely to approve the Lithuanian bid in July.

Fearing price hikes, 49 percent of Lithuanians oppose joining the eurozone against 40 percent in favour, according to a November Eurobarometer survey, the most recent available.

But analysts say there may now be greater backing because of Russia's actions in Ukraine, as Vilnius seeks to further anchor itself in the West.

"The sense of insecurity over Russia has the psychological effect of encouraging us to nestle up to Europe," Vilnius economist Ruta Medaiskyte told AFP.

Lithuania spent five decades under Soviet occupation until 1991, before joining NATO and the EU in 2004.

It then narrowly failed to meet the inflation criteria to adopt the euro in 2007.

The economy is expected to grow 3.4 percent this year and 4.3 percent in 2015, making it one of the fastest growing in the EU.


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