Baltic countries are fighting for euro


Published on

Published in: Travel, Business
  • Be the first to comment

  • Be the first to like this

Baltic countries are fighting for euro

  1. 1. Baltic countries are fighting for euro Tõnn Laos
  2. 2. <ul><li>Article from: </li></ul><ul><li>8 minutes </li></ul>
  3. 3. Introduction <ul><li>Euro criterias (the Maastricht criteria) </li></ul><ul><li>Fulfilment of criteria </li></ul><ul><li>Target dates </li></ul><ul><li>The situation </li></ul><ul><li>Conclusion </li></ul>
  4. 4. Euro criterias <ul><li>Inflation rates : No more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) member states of the EU. </li></ul><ul><li>Government finance : </li></ul><ul><ul><li>Annual government deficit: </li></ul></ul><ul><ul><li>The ratio of the annual government deficit to gross domestic product (GDP) must not exceed 3% at the end of the preceding fiscal year. If not, it is at least required to reach a level close to 3%. Only exceptional and temporary excesses would be granted for exceptional cases. </li></ul></ul><ul><ul><li>Government debt: </li></ul></ul><ul><ul><li>The ratio of gross government debt to GDP must not exceed 60% at the end of the preceding fiscal year. Even if the target cannot be achieved due to the specific conditions, the ratio must have sufficiently diminished and must be approaching the reference value at a satisfactory pace. </li></ul></ul>
  5. 5. Euro criterias <ul><li>3. Exchange rate : Applicant countries should have joined the exchange-rate mechanism (ERM II) under the European Monetary System (EMS) for two consecutive years and should not have devalued its currency during the period. </li></ul><ul><li>4. Long-term interest rates : The nominal long-term interest rate must not be more than 2 percentage points higher than in the three lowest inflation member states. </li></ul>
  6. 6. Fulfilment of criteria 5.15% 29.3% -3.2% -0.4% Lithuania 10.54% 36.1% -1.1% -4.0% Latvia 6.1% 7.2% -0.4% 1.4% Estonia Max 6.5% Max 60% Max 3% Max 3.2% Reference value Long-term interest rate Gross government debt Annual government deficit Inflation rate Criteria
  7. 7. Targets <ul><li>Estonia- Official euro adoption date is the 1. january in 2011. Expected adoption date is also the 1. january 2011 </li></ul><ul><li>Latvia- Official euro adaption date is the 1. january in 2014. Expected adaption date is year 2014 </li></ul><ul><li>Lithuania- expected entry date is year 2014 </li></ul>
  8. 8. The situation <ul><li>Budget deficits </li></ul><ul><li>Zealous converts </li></ul><ul><li>Fallen capital inflows </li></ul><ul><li>Conpetitiveness </li></ul>
  9. 10. The dark side <ul><li>Rapidly falling GDP </li></ul><ul><li>Big unemployment rate </li></ul><ul><li>Falling domestic demand </li></ul>
  10. 11. Conclusion <ul><li>All countries focuses on budget deficits </li></ul><ul><li>Low public debt and long-term interest rates do not appear problematic </li></ul><ul><li>Inflation problems </li></ul>
  11. 12. <ul><li>Thank you! </li></ul><ul><li>Questions? </li></ul>