ECB’s Šimkus: Euro Adoption ‘One of the Best Economic Decisions Over the Last 30 Years’

16 December 2024

ECB’s Šimkus: Euro Adoption ‘One of the Best Economic Decisions Over the Last 30 Years’
Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania, at the European Central Bank Forum on Central Banking, 27 June 2023 in Sintra, Portugal. © Sérgio Garcia/Your Image for ECB

By David Barwick – VILNIUS (Econostream) – European Central Bank Governing Council member Gediminas Šimkus on Monday drew a positive balance regarding Lithuania’s accession to the euro area.

Speaking at a conference to mark the 10th anniversary of Lithuania’s adoption of the euro, Šimkus, who heads the Bank of Lithuania, called the introduction of the common currency ‘one of the best economic decisions over the last 30 years’ that ‘has brought tangible economic benefits to the people.’

In this regard, Šimkus cited benefits in terms of trade and improved financial stability.

‘The euro reduces downside risks to our economy’, he said. ‘That is most evident in crisis situations.’

An example of this was the pandemic, during which, ‘despite a complete shutdown of economic activity and huge uncertainty about the future, international capital markets were lending to Lithuania at low interest rates’, he said.

The avoidance of sharp economic contraction during the pandemic because of the euro was sharply different from the experience of Lithuania during the global financial crisis, when the country was not yet in the euro area, he said.