Lithuania Euro adoption of cost-benefit analysis

Abstract

After signing the accession treaty with the European Union in 2004, Lithuania pledged to adopt euro when ready. 2015 is the year when Lithuania is granted a permission to join the euro zone. While euro zone is on a brink of a second recession, Lithuania is determined to adopt the common currency as its only way of future economic development. The goal of this paper is to summarise the effects of euro on selected countries and identify how adopting the euro will affect Lithuanian economy. The results of calculated prediction state that euro should increase Lithuanian consumers` purchasing power by an additional 4% compared with European Union average purchasing power.