Lithuania - among the states with an interesting history.No less fascinating process of formation of the national currency of the State - litas.
Lithuania: finance and history
Lithuania, as you know, has a very complicated history of its formation and development.In the Middle Ages the territory of modern Lithuania were part of a powerful state - the Grand Duchy of Lithuania, which was then merged into a union with another great power - Rzeczpospolita.But in the end section of the state in the late 18th century the territory of modern Lithuania was annexed by Russia.The ruble became the official currency of these lands.
During the First World War, the territory of Lithuania was occupied by the Germans.Changes and the local monetary system - the occupation authorities have introduced a new currency in the form of the eastern German rate.By virtue of the strongest political crisis and war Russian Empire in 1917-18 splits.Lithuania becomes independent.
In the first years of independent development is the Baltic state continues to use the German East ruble.Historians have documented precedents commodity-money payments in other currencies.The uncertainty in monetary turnover forced the authorities to reform the country.Also, changes to the banking system contributed to the post-war crisis.The first step was the introduction of reforms German mark (in Lithuanian "auksinas").It is quite successfully used in financial calculations.But soon the young state in the economy entered a period of hyperinflation (by the way, in most post-war Germany, the economy is not going very well, which affects the rate of the brand).Perform calculations provided the currency rising in price all the time becoming more complex.
How appeared and disappeared lit.
Lithuanian parliament adopted a radical solution.The authorities have decided - once there is the independence of Lithuania, the currency must also have its own.In 1922 came the Central Bank of the state, and almost immediately, the country has introduced its own currency - litas.The economic situation has normalized.
German mark was replaced successfully cast.An interesting fact is that the bill, in accordance with the issuance policy of the Central Bank of Lithuania, published not in the country, as in England or Germany.In Lithuania, only coins were issued.In 1939, the Baltic state again lost its independence, joining the USSR.Change of Lithuania and currency: the ruble and kopecks had to get used again to the Balts.
Lit again in circulation
After the events of the late 80's - early 90's Lithuania is once again becoming a sovereign state and refuses to ruble as deemed many economists and political scientists, at the earliest opportunity, if to underline the willingness to pursue an independent economic policy.However, as soon as the political arena reappeared independent Lithuania, the currency of this country was not implemented immediately.
Practical Lita preceded a return to "common coupons", sometimes called by the people "vagnorki" (they were implemented with the direct participation of Prime Minister Gediminas Vagnoryusa).Only in 1993 litas cash flow returned to the Baltic states.They gradually began to replace a "vagnorki" at the rate of 100 to 1. For some time the "general coupons" and LTL were equivalent means of payment on the territory of Lithuania.
Banknotes and coins
Lithuanian Litas - Lithuanian, which is unparalleled in other countries currency, but it is like a dollar of 100 cents.Now in the cash circulation there are notes from a variety of face value - from 1 to 200 litas.In stores you can find Lithuanian banknote one of two series - those that were issued prior to 1997 and those after.But they are very similar.In 2007, there were updated bills more secure against counterfeiting.
on the banknote depicts LTL emblematic events in the history of Lithuania, famous politicians and cultural figures, monuments and architectural structures.State Mint produces, in addition to standard LTL, also commemorative memorabilia samples of national banknotes.Such coins are minted from copper-aluminum alloys, nickel silver, brass metal combinations contain precious metals (gold, silver).
Subjects commemorative coins can be different.For example, coins were issued devoted significant event - when Lithuania was visiting Pope John Paul II.There was also a series of coins minted in honor of the 60th anniversary of the famous record of Lithuanian pilots Girėnas and Darius, who crossed the Atlantic by air.
litas exchange rate
In the period from 25 June 1993 to late January 2002, the Lithuanian national currency rate had rigid adherence to the national US currency.Lithuanian litas to the US dollar was sold at the rate of 4 to 1. Since February 2002, however, the Baltic currency was now tied to the single European.The rate at which sold Lithuanian litas to the euro was 3.4528 to 1. This proportion has since remained virtually unchanged.
Preparations for joining the Eurozone Lithuania
At the end of the 2000s, the financial authorities of Lithuania began to take active efforts to replace the national currency to the single European.Get into the zone of one of the most powerful world currency - the euro - at the same time is not easy.It is necessary to comply with the so-called Maastricht criteria under which expenditure budget should not exceed revenues by more than 3% of annual GDP, and public debt - no more than 60% of GDP.Inflation in the economy should not be more than 1.5% against the average figure of the three states of the euro area, characterized by the lowest growth in prices.
decisive steps towards the euro zone Lithuania did in early 2014 when the financial authorities of the country developed a plan under which the strategy for accession to the euro area should be carried out in several levels.
assumed that in the spring of 2014, experts of the EU countries that are part of the Eurozone, to assess the progress of preparation of Lithuania to the introduction of the single European currency, the economy will analyze the willingness to fulfill the Maastricht criteria.In the case of a positive assessment by the European partners, the final word was for Balts, everything depended on what she says Lithuania: currency should still be his own, or you can enter the euro zone.
Arguments against Eurozone
Expert opinions regarding the prospects for Lithuania's accession to the Eurozone were different.Some analysts believed that this step - rash, arguing that the European economy is still present crisis.In addition, it is believed supporters of this point of view, integration within the euro area could substantially reduce the economic sovereignty of Lithuania.An example of some countries which are now in the euro area, but can not conduct its own monetary policy, confirms analysts say this thesis.
Lithuania, as some experts believe, it would make sense to pay attention to the Czech Republic: a country with a post-Soviet past, it is in the EU, as well as Lithuania.Currencies also have this Slavic country has its own, and independent monetary policy - it is a national central bank.
Some experts are questioning the ability of the Lithuanian economy to withstand the Maastricht criteria on inflation.Were theses that financial authorities may be tempted to artificially reduce the figures, although the Lithuanians have assured the community that they would not resort to such methods.
case for Eurozone
However, there were also optimistic assessment of the prospects of Lithuania's accession to the Eurozone.Some economists have suggested that the state will receive, just the same, greater economic sovereignty than it is now, when the rate of the litas pegged to the euro.According to them, after entering the eurozone country will be able to actively participate in determining the priorities of financial policy of the European Central Bank.What decided
European partners?
In July 2014 the EU Council of Ministers adopted a decision - to allow Lithuania to enter the euro area from 1 January 2015 year.What at the time of the transition of the Baltic countries to the euro should be the exchange rate?Lithuanian litas is now correlated to the euro at a ratio of 3.4528 units to 1. And this course was decided to fix.Lithuania thus becomes the third former Soviet republic of the Baltic region, followed by Estonia and Latvia, which went down in the euro zone.
