19.18 Euro – Lithuania

In 2020, Lithuania's currency situation was defined by its well-established membership in the Eurozone, having adopted the euro on 1 January 2015. Therefore, the national currency was the euro (€), and monetary policy was set by the European Central Bank (ECB), not by Lithuanian authorities. This provided stability and eliminated exchange rate risk within the Eurozone, which was particularly valuable during the economic turbulence of that year. The primary focus for Lithuania was not on currency management but on navigating the broader economic fallout of the COVID-19 pandemic within the constraints and support mechanisms of the single currency area.

The year was dominated by the severe economic shock caused by the global pandemic. Lithuania's economy, heavily reliant on exports and services, contracted sharply in the second quarter. The government responded with significant fiscal stimulus packages to support businesses and households, leading to a widened budget deficit. From a currency perspective, the euro provided a shield against potential speculative attacks or liquidity crises that might have affected a smaller, independent currency, and ensured continued access to ECB support measures like the Pandemic Emergency Purchase Programme (PEPP).

Consequently, domestic economic discussions in 2020 centered on fiscal policy, healthcare, and sectoral support, not on exchange rates or independent monetary tools. The stability of the euro allowed the government to focus its response entirely on budgetary measures. By the end of 2020, as the initial shock subsided, Lithuania's economy showed signs of a faster-than-expected recovery compared to some Eurozone peers, though the year concluded with the currency's role as a bedrock of macroeconomic stability largely unquestioned in the national debate.