2014/509/EU: Council Decision of 23 July 2014 on the adoption by Lithuania of the euro on 1 January 2015

proposal that Lithuania joins the euro area in 2015. ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to take account of Parliaments opinion. BACKGROUND: Lithuania is one of the countries with a derogation in regard to the adoption of the euro. Article 140(1) of the Treaty on the Functioning of the European Union provides that at least once every two years or at the request of a Member State with a derogation, the Commission and the European Central Bank have to report to the Council on the progress made in the fulfilment by Member States with a derogation of their obligations regarding the achievement of economic and monetary union. The Council adopted a recommendation approving Lithuania's membership of the euro area on 1 January 2015. It agreed with the Commission's assessment that Lithuania has achieved a high degree of sustainable convergence and therefore fulfils the necessary conditions for adoption of the euro as its currency is thus set to become the 19th member of the euro area. The Council is to adopt the decision on Lithuania’s membership in July 2014, after consulting the European Parliament and after a debate during the European Council on 26-27 June. The recommendation draws on reports from the Commission and the European Central Bank which confirm: · the compatibility of Lithuania's legislation with EU treaty provisions and with the statute of the European system of central banks; · the progress made by Lithuania in fulfilling the convergence criteria – namely price stability, the government's budgetary position, exchange rate stability and long-term interest rates – and several other factors. The Committee on Economic and Monetary Affairs adopted the report by Werner WANGEN (EPP, DE) on the proposal for a Council decision on the adoption by Lithuania of the euro on 1 January 2015. It approved the Commission proposal and endorses the adoption of the euro by Lithuania on 1 January 2015 . Members recalled that according to the European Central Bank Convergence Report published on 4 June 2014, Lithuania meets all the convergence criteria. They welcomed the fact that: in the year ending in April 2014 Lithuania had a mean inflation rate of 0.6%, and therefore fulfils this convergence criterion; in the reference year 2013 Lithuania had a budget deficit of 2.1% and a government debt of 39.4% of Gross Domestic Product, and therefore fulfils this convergence criterion; there have been no tensions surrounding the litas-euro exchange rate during the two-year assessment period; during the reference period from May 2013 until April 2014 long-term interest rates in Lithuania averaged 3.6%; legislation in Lithuania is fully compatible with the compliance duty under Article 131 of the Treaty on the Functioning of the European Union, in particular with the principle of central bank independence. The European Parliament adopted by 545 votes to 116, with 34 abstentions, a legislative resolution on the proposal for a Council decision on the adoption by Lithuania of the euro on 1 January 2015. Parliament approved the Commission proposal and endorses the…

Official title: 2014/509/EU: Council Decision of 23 July 2014 on the adoption by Lithuania of the euro on 1 January 2015

Summary extracted from the European Parliament's own per-stage procedure record. Data © European Union (Decision 2011/833/EU). Methodology.