Lithuania joins warning of 7 north European countries on scope of euro zone reform

In a joint letter, the finance ministers of the Baltic states, Denmark, Sweden, Finland, Ireland and the Netherlands called for a focus on completion of the Banking Union, stronger compliance to budget rules and creation of the European Monetary Fund, leaving other ideas for later.

“Further deepening of the Economic and Monetary Union (EMU) should stress real value-added, not far-reaching transfers of competence to the European level,” reads the letter.

“For that reason the discussion on the deepening of the EMU should find a consensus on ‘need to haves’, instead of focusing on ‘nice to haves’,” said the finance ministers.

They also emphasized that “new EMU initiatives should be open on a voluntary basis to non-euro area.” Out of the countries that signed the letter, Denmark and Sweden have not adopted the euro.

Lithuania’s Finance Minister Vilius Šapoka told BNS that the letter was intended to encourage the bloc to focus on solution of existing issues and leave other ideas for later.

“We have to make decisions on matters that plans have already been endorsed for – I mean the completion of the Banking Union, development of the capital market union, consolidation of the common deposit insurance system, and all other matters can be discussed at a later date,” said the minister.

The countries that signed the letter gave a cautious view of the ambitious plans of French President Emmanuel Macron to reform the euro zone and establish a shared budget or a finance ministry.

In Šapoka’s words, Lithuania disapproves of the French idea of founding the position of finance minister for the euro zone.

“We are rather skeptical about the proposal because, as I have mentioned, we should first of all focus on the matters that have already been agreed – completion of the Banking Union, development of the capital union and consolidation of the stability mechanism,” the minister told BNS.

The joint letter came after German politicians reached agreement on a new government headed by Angela Merkel. In Sapoka’s words, the deal facilitates a discussion on the future of the euro area.