STRASBOURG, July 17 (Xinhua) -- Lithuania's admission into the eurozone was approved Wednesday by the European Parliament (EP).
The EP voted in favor of Lithuania joining the single currency by 545 votes to 116, with 34 abstentions, opening the door for the Baltic state to become the eurozone's 19th member from the start of 2015.
The final decision will be taken by member state finance ministers in the Council of the European Union before the end of July. At the same time they will fix the exchange rate at which the 'lita' will be converted into euros. It is currently 3.45 litas for 1 euro.
In June the European Commission said Lithuania met all the criteria for joining the euro. To be eligible, a member state has to comply with five main criteria set out in the Maastricht Treaty in 1992.
Annual inflation should be a maximum 1.5 percentage points above the average of the three best performing EU countries; the budget deficit should be at most 3 percent of GDP; government debt cannot exceed 60 percent of GDP; long-term interest rates should be at most two points above the average of the three best performing EU countries in terms of price stability; and finally the country should have been participating in the European exchange rate mechanism, which limits fluctuations between the euro and national currencies, for two years.
For some of these criteria there are leeways if a country is close to a particular limit or has made significant progress on reaching it.
In addition, a country's legislation must fully comply with all the requirements for adopting the euro as laid down in the EU treaties, especially the independence of its central bank.
Also in June the European Central Bank (ECB) said Lithuania was ready for the single currency but warned about maintaining low inflation rates.
"Maintaining low inflation on a sustainable basis in Lithuania will be challenging in the medium term, as it may be difficult to control domestic prices pressures and avoid economic overheating in an environment of fixed exchange rates," the ECB said.
But the Economic and Monetary Affairs Commissioner Olli Rehn told a news conference that the European Commission (EC) was not overly worried about the country's inflation performance.
He said the EC expected inflation in Lithuania to rise to 1.1 percent this year and 1.8-1.9 percent in 2015 from a 12-month average of 0.6 percent measured to April 2014.
"The analysis of fundamentals ... clearly support a positive assessment of the price stability criterion," Rehn said at the time.