EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 14 June 2005 
at the request of Lietuvos bankas  
on a draft law on the adoption of the euro 
(CON/2005/21) 
 
Introduction 1. On 9 May 2005, the European Central Bank (ECB)  received a request from Lietuvos bankas for an 
opinion on Lietuvos Respublikos euro įvedimo Lietuvos Respublikoje įstatymo projektas  (draft law 
on the adoption of the euro in the Republic of Lithuania (hereinafter the ‘draft law’)).   
2. The ECB’s competence to deliver an opinion is b ased on Article 105(4) of the Treaty establishing 
the European Community and the first three inde nts of Article 2(1) of Council Decision 98/415/EC 
of 29 June 1998 on the consultation of the Europ ean Central Bank by national authorities regarding 
draft legislative provisions
1, as the draft law relates to currency matters, means of payment and to 
the tasks of Lietuvos bankas, insofar as the draft law imposes certain duties on Lietuvos bankas. In accordance with the first sentence of Article 17. 5 of the Rules of Procedure of the European 
Central Bank, the Governing Council has adopted this opinion.   
Structure and scope of the draft law 3. The draft law covers a wide range of topics with  a view to ensuring a smooth introduction of the 
euro in Lithuania. It either replaces or amends  the existing currency law and regulates issues 
relating to the introduction of the euro in Lithuania. 
4. In particular, the draft law provides as follows: (i ) for the introduction of the euro as the monetary 
unit of Lithuania and that euro banknotes and coins will become legal tender in Lithuania, (ii) for 
the publication of images of euro banknotes and coins and euro cent coins, ( iii) for the exchange of 
Lithuanian litas into euro, (iv) for the conversion of balances in litas on clients’ accounts into euro, 
(v) that all references to the litas in Lithuanian  legal acts, contracts and other documents will be 
replaced by references to the euro, (vi) that all re ferences to national interbank reference rates will 
be replaced by references to EONIA and EURIBOR,  (vii) for the renominalisation of securities, 
(viii) for the dual display of prices, (ix) for the exchange of mutilated litas and euro and of litas 
withdrawn from circulation, (x) for the withdraw al of litas from circulation and the continuing 
status of litas as legal tender for 15 calendar days afte r the date of introduction of the euro, (xi) that 
                                                     
 
1  OJ L 189, 3.7.1998, p. 42. 
 
2 breaches of the draft law will be sanctioned in accordance with Lithuanian law and, (xii) the 
temporary operation of certain laws concerning the litas. Moreover the draft law: (i) refers to the 
irrevocably fixed exchange rate between the lita s and the euro and sets out some supplementary 
rounding rules, (ii) instructs the Lithuanian Government to prepare laws necessary for the 
implementation of the draft law, (iii) mandates th e Lithuanian Government to adopt legal acts in 
the fields of employment and social security law with a view to expressing relevant amounts in 
euro rather than in litas, (iv) suggests that the Lithuanian Government, Lietuvos bankas, the 
Lithuanian Securities Commission, Insurance Supervisory Commission and other institutions 
prepare legal acts, recommendations and explanatio ns relating to the introduction of the euro, and 
(v) repeals the Act on the credibility of the litas.  
An annex to the draft law lists the Community le gal acts which are to be implemented by adopting 
the draft law. The ECB understands that the incl usion of such an annex is consistent with 
legislative practice in Lithuania. The draft law does not provide for the date of its entry into force. 
Instead, the reference to the date in  Article 16(1) of the draft law is left blank, on the understanding 
that it will be completed later.  
5. Article 2 of the draft law defines the following th ree concepts: (i) the date of introduction of the 
euro; (ii) the irrevocably fixed conversion rate betw een the euro and litas; and (iii) the exchange of 
litas into euro. First, the date of introduction of the eu ro is defined as a date laid down in a decision 
of the Council to abrogate the derogation concerni ng Lithuania by following the procedure laid 
down in Article 122(2) of the Treaty. Second, th e irrevocably fixed conversion rate between the 
euro and the litas is defined as the exchange rate between the euro and the litas, which will be laid 
down by a decision of the Council following the procedure laid down in Article 123(5) of the Treaty. Third, the exchange of litas into euro is  explained as the exchange of litas banknotes and 
coins and litas cent coins for euro banknotes and coins and euro cent coin s as well as the crediting 
of a client’s account by applying th e irrevocably fixed conversion rate.  
Timing for the adoption of the draft law and preconditions for its adoption 
6. The ECB notes that current Community secondary legi slation on monetary matters (in particular 
Council Regulation (EC) No 1103/97 of 17 June  1997 on certain provisions relating to the 
introduction of the euro
2, Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of 
the euro3 and Council Regulation (EC) No 2866/98 of 31 December 1998 on the conversion rates 
between the euro and the currencies of  the Member States adopting the euro4), although forming 
part of the acquis communautaire  of both participating and non-pa rticipating Member States, only 
provides for the euro changeover in the original  11 participating Member States (and later in 
                                                      
2  OJ L 162, 19.6.1997, p. 1. Regulati on as last amended by Council Regula tion (EC) No 2595/2000 of 27 November 2000 
(OJ L 300, 29.11.2000, p. 1). 
3  OJ L 139, 11.5.1998, p. 1. Regulati on as last amended by Council Regula tion (EC) No 2596/2000 of 27 November 2000 
(OJ L 300, 29.11.2000, p. 2). 
4  OJ L 359, 31.12.1998, p. 1. Regulation as last ame nded by Council Regulation (EC) No 1478/2000 of 19 June 2000 
(OJ L 167, 7.7.2000, p. 1). 
 
3 relation to Greece, which adopted the euro on 1 Ja nuary 2001). This legislation does not, however, 
address the euro changeover in Member States joining the euro area at a later stage.  
Considering the above, the ECB provides its comments on the draft law with reference to 
Community secondary legislation currently in force and this opinion is issued without prejudice to any future Community legislation relating to the euro changeover in any of the current Member 
States with a derogation.  
7. The ECB understands that Lietuvos bankas expects th e draft law to be adopted in the second half of 
2005, and that implementing regulations will be ad opted by 1 July 2006. However, although the 
date of entry into force of the draft law is left bla nk in the draft law, it is intended that the draft law 
and related implementing regula tions should enter into force only upon abrogation of the 
derogation in respect of Lithuania. The E CB understands the purpose of adopting national 
legislation supplementing Community legislation on m onetary matters at an early stage. However, 
it should be remembered that the exclusive compet ence on monetary matters regarding the euro lies 
with the Community. National legislation on m onetary matters may only complement Community 
law when Community law provides for it, as wa s the case with Regulation (EC) No 974/98. 
Therefore, as a preliminary remark, the ECB cons iders that, inasfar as the draft law relates to 
monetary matters which fall within the Community ’s exclusive competence, it would be legally 
undesirable as well as impractical to adopt the draft law before the Council itself takes a decision to allow for national legislation in Lithuania regardi ng the introduction of the euro or at least before 
any agreed draft of the relevant Community legal act is published in the Official Journal of the 
European Union . Early adoption of the draft law implies a risk of inconsistenc y with forthcoming 
Community legislation and might require further adaptation of national law once Community legislation is adopted. Thus, the desired objective of providing for more legal certainty would not 
be achieved but rather compromised. 
8. Article 13 of the draft law proposes a dual circulati on period of 15 calendar days with respect to 
banknotes and coins denominated in litas and stat es that ‘litas banknotes and coins and litas cent 
coins shall be used as legal tender and means of payment which it is mandatory to accept for 
15 calendar days following the date of the adopti on of the euro’. In addition, Lietuvos bankas and 
commercial banks as well as branches of foreign banks will be prohibited from the date of 
introduction of the euro from dispensing litas banknotes and coins to their clients. In this context, 
the ECB recalls that Article 15 of Regulation (EC) No 974/98, which governs banknotes and coins 
denominated in a national currency unit, was dr afted at a time when no euro banknotes and coins 
were available and people and businesses still had to adapt and get used to the new currency, 
whereas the situation is different now, when eu ro banknotes and coins are widely available in 
Member States with a derogation. Given the differen ce in the situation, it could also well be that 
Community law establishes no dual circulation period or a very short one.   
As an additional consideration, the Lithuanian au thorities should clarify the precise meaning of the 
expression ‘shall be used as legal tender and means of payment which it is mandatory to accept’ in 
 
4 Article 13 of the draft law, and evaluate whether th is provision must apply to all natural and legal 
persons. 
9. The ECB notes that no amendments have been proposed to the Lietuvos bankas Act and to the 
Lithuanian Constitution with respect to amendments  to Lithuanian law necessary to comply with 
the Treaty and the Statute of the European System  of Central Banks and of the European Central 
Bank. The ECB identified various aspects pertai ning to Lithuania’s legal convergence in its 
Convergence Report 20045, and the Lithuanian authorities need to address these well before the 
introduction of the euro in Lithuania. It should be  noted that this opinion is without prejudice to 
any future convergence reports which the ECB is required to compile under Article 122(2) of the 
Treaty. 
Name of the single currency 10. The ECB notes that the Lithuanian language version of the draft law refers to the ‘euras’ in the 
nominative singular case as opposed to the ‘euro’. In this regard the ECB would like to remind the 
Lithuanian authorities that Article 2 of Regula tion (EC) No 974/98 stipulates that ‘…the currency 
of the participating Member States shall be the euro’
6. Recital 2 to this Regulation notes that, at its 
meeting in Madrid on 15 and 16 December 1995,  the European Council considered that ‘…the 
name of the single currency must be the same in all the official languages of the European Union, 
taking into account the existence of different alpha bets’. Taken together, these two provisions make 
it clear that the name of the single currency is the ‘euro’ and that this name should be identical in 
legal acts published in all Community languages. Furthermore, the ECB would like to note that new Member States are under an unquestionable legal obligation to comply with political 
agreements concluded by the European Council pursu ant to Article 5(3) of the Act concerning the 
conditions of accession
7. Thus, conclusions of the Madrid European Council with regard to the 
name of the single currency are binding on the new Member States even if they were not recorded 
in the recitals to Regulation (EC) No 974/ 98. The Community, as the exclusive holder of 
competence in monetary matters, determines alone the name of the single currency. As a single 
currency, the name of the euro needs to be identical in the nominative singular case in all 
Community languages to ensure that its singlen ess is apparent. On the basis of these legal 
considerations and in view of the supremacy of Community law the ECB is of the opinion that the 
name of the single currency in the nominative singul ar case is legally required to be consistently 
rendered in all national legal acts as the ‘euro’.  
                                                      
5  Published in October 2004 pursuant to Article 122(2) of the Treaty. 
6  See the English language version of Regulation (EC) No 974/ 98 and all the other official  language versions, with the 
exception of the Greek language version. 
7  Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the 
Republic of Latvia, the Republic of Lit huania, the Republic of Hungary, the Repub lic of Malta, the Republic of Poland, 
the Republic of Slovenia and the Slovak Re public and the adjustments to the Treaties on which the European Union is 
founded (OJ L 236, 23.9.2003, p. 33). 
 
5 Recognition of the Community’s competence in monetary matters  
11. Article 3(1) of the draft law states that from the date of introduction of the euro, the monetary unit 
of Lithuania shall be the euro. Article 3(2) of th e draft law also states that  euro banknotes issued by 
the ECB and by the national central banks (NCBs) an d euro coins and euro cen t coins issued by the 
Member States whose currency is the euro shall be legal tender in Lithuania and, in compliance 
with Community law, it is mandatory to  accept them as a means of payment.  
In addition, Article 8(1) of the draft law provides that, with effect from th e date of introduction of 
the euro, references to the litas in legal acts,  agreements and other documents which remain 
effective thereafter for the remainder of their term  shall be regarded as references to the euro, and 
that amounts in litas shall be regarded as having been expressed in euro and shall be converted 
following the procedure laid down in the draft law. 
The combined effect of Articles 3 and 8(1) of the dr aft law is therefore to s ubstitute the euro for the 
litas. In this context, the ECB would like to make  the following observations relating to the direct 
applicability of Community regulations.  
12. The ECB notes that, in accordance with Article 249  of the Treaty, a Community regulation ‘shall 
be binding in its entirety and directly applicable  in all Member States’. A Community regulation 
therefore does not need to be transposed into the domestic law of Member States8. If a Member 
State transposes a regulation into national law, the fact that the provision was a Community law 
provision may be obscured. In addition, if a Member  State transposes a regulation in even a slightly 
different form, there is a risk that its content will be altered.  
Nonetheless, Member States may provide for appropri ate sanctions which were not provided for in 
a regulation and may continue to regulate vari ous related issues which are not covered in a 
regulation9 or may use appropriate methods to preven t breaches of Community rules if national law 
is in conformity with the Community rules10. Pursuant to Article 10 of the Treaty, Member States 
are even obliged to take necessary measures to ensure fulfilment of the obligations arising from the 
Treaty or resulting from action taken by Community institutions. Also, a regulation may itself require Member States to adopt implementing measures
11. The technique of incorporating 
provisions of Community regulations into na tional law may only be accepted under exceptional 
circumstances. In this regard, the C ourt of Justice has stated, in Case 272/83 Commission v Italian 
Republic12, that in that particular instance the appli cation in Italy of a system for encouraging the 
                                                      
8  As stated by the Court of Justice of the European Communities in Case 34/73 Fratelli Variola S.p.A. v Amministrazione 
italiana delle Finanze  [1973] ECR 981, ‘[b]y virtue of the obligat ions arising from the Treaty and assumed on 
ratification, Member States are under a duty not to obstruct the direct applicability inherent in regulations and other rules 
of Community law. Strict compliance with this obligation is an indispensable condition of simultaneous and uniform 
application of Community regulations throughout the Commu nity’. This position was also  reiterated in Case 50/76 
Amsterdam Bulb BV v Produkschap voor Siergewassen [1977] ECR 137. 
9  Case 50/76 above. 
10  Case 39/70 Norddeutsches Vieh- und Fleischkontor GmbH v Hauptzollamt Hamburg-St. Annen  [1971] ECR 49. 
11  Case C-403/98 Azienda Agricola Monte Arcosu v Regione Autonoma della Sardegna  [2001] ECR I-103. 
12  [1985] ECR 1057. 
 
6 formation of producer groups could not be ensu red by Community regulations alone, it rather 
depended on the combination of a number of provisions adopted at Community, national and 
regional level. In such special circumstances, the fact  that regional laws incorporate, for the sake of 
coherence and in order to make them comprehensib le to the persons to whom they apply, some 
elements of Community regulations, cannot be re garded, in the Court’s view, as a breach of 
Community law.  
13. Considering that Community secondary legislatio n on monetary matters will apply directly in 
Lithuania once its application is extended to Li thuania following the procedure laid down in the 
Treaty, the ECB suggests deleting Articles 3 and 8(1) of the draft law, since these provisions 
merely repeat Articles 2, 3 and 14 of Regulation (E C) No 974/98 and Article 106(1) of the Treaty. 
The ECB considers that the aforementioned provisions of Regulation (EC) No 974/98 and the Treaty are sufficiently coherent and comprehensive making it unnecessary to repeat or reflect them 
in Lithuanian law. Alternatively, these provisions  of the draft law should refer explicitly to the 
Community legal acts on the basis of which the euro is being introduced in Lithuania.  
14. As an additional point, Article 8(1) of the draf t law deals with references to the litas in the 
following instruments: (i) legal acts; (ii) cont racts; and (iii) other documents. To contrast, 
Article 14 of Regulation (EC) No 974/98 refers to  ‘legal instruments’, the latter concept being 
defined in the second indent of Article 1 of Regul ation (EC) No 974/98 as ‘legislative and statutory 
provisions, acts of administration, judicial deci sions, contracts, unilateral legal acts, payment 
instruments other than banknotes coins, and other instruments with legal effect’. The ECB considers that Article 8(1) of the draft law is  insufficiently precise in comparison and therefore 
proposes that it should be deleted or, alternatively, th at the wording of the draft law is aligned with 
the provisions of Regulation (EC) No 974/98.  
The concept of legal tender 15. With respect to the mandatory acceptance of euro  banknotes and coins as provided in Article 3(2) 
of the draft law, the ECB understands that this do es not prejudice the general principle of parties’ 
contractual autonomy and would not prevent debtor s and creditors to agree on discharging debts by 
way of non-cash money or in a currency other than  the one being legal tende r. As an enhancement 
of the draft law, the ECB recommends clarifying that Article 3(2) of the draft law does not prevent parties from agreeing on other methods for the dischar ge of debts. In addition, mandatory law and 
customary law may indicate limits to the unrestri cted use of cash as means for debt settlement. 
Publication of images of euro bankno tes and coins and euro cent coins 
16. The ECB notes that pursuant to Article 4 of the draft law, Lietuvos bankas will publish information 
on samples of the front side and the reverse side of euro banknotes and the common side (reverse) and the national side (obverse) of euro coins and euro cent coins with  descriptions of their 
authentication features. The ECB welcomes this provision since it will make the Lithuanian public more familiar with euro banknotes and coins. For the sake of completeness, Lietuvos bankas could 
 
7 also publish images of all of the national designs to be found on the obverse of euro coins issued by 
the Member States that have adopted the euro, sin ce it is not clear from Article 4 of the draft law 
whether it also applies to euro coin s issued by other Member States.  
Exchange of litas banknotes and coins 17. Article 2(2) of the draft law, inter alia , defines the term ‘exchange of litas into euro’, and the 
exchange of litas banknotes and coins into euro bank notes and coins falls within that definition. In 
respect of the precise wording of that definiti on, the ECB recommends deleting the reference to 
‘litas cent coins’. The ECB understands that both litas cent coins and litas coins fall under the 
general concept of ‘litas coins’. Furthermore, th e ECB recommends clarifying in the definition of 
exchange of litas into euro that the crediting of  a client’s account with a corresponding amount in 
euro is in consideration of the exchange of litas banknotes and coins, as otherwise this might be 
confused with the simple conversion of bala nces on bank accounts from litas into euro which will 
result from the introduction of the euro without  any exchange of banknotes and coins necessarily 
taking place, as will be provided for in Community legislation.   
18. The ECB welcomes the provisions of Article 5 of the draft law concerning the exchange of 
unlimited amounts of litas into euro free of charge  by Lietuvos bankas and, for a limited period of 
time, by commercial banks and Lithuanian bran ches of foreign banks. The ECB also notes that 
Article 16 of Regulation (EC) No 974/98 states that the issuers of banknotes and coins of the Member States will continue to ac cept, against euro at the conversion rate, the banknotes and coins 
previously issued by them ‘in accordance with the laws or practices’ of each participating Member 
State. The draft law therefore now expressly clarifies that Lietuvos bankas will exchange litas banknotes and coins into euro for an unlimited pe riod of time. The ECB understands that this 
conforms with the current practice applied by Lietuvos bankas and welcomes this provision as it 
enhances legal clarity.  
19. As an additional point, the Lithuanian authorities may wish to specify in the draft law whether 
there should be any limit on the amount of fees to  be charged by banks for exchange operations 
after expiry of the period during which they w ill be obliged to exchange  litas to euro without 
charge.   
Conversion rate and supplementary rounding rules 20. With respect to the conversion rate and the recalcula tion rules, Article 6 of the draft law refers to 
the irrevocably fixed exchange rate and the rules set  out in EU legal acts. This Article further lays 
down rules for interim rounding of amounts on conv ersion from litas into euro. The ECB notes that 
in certain circumstances a more precise conversi on of monetary amounts may be appropriate, in 
particular when the application of general r ounding rules would result in numbers different from 
those expected by interested parties, e.g. cons umers, as demonstrated in a recent case before the 
 
8 Court of Justice13. Therefore, the Lithuanian authorities ma y consider it relevant to assess each case 
individually in order to determine whether inte rim conversion of amounts is fair and acceptable. 
21. Moreover, the Lithuanian authorities may wish to  specify how and by whom the ‘more precise 
principles of expression’ referred to in Article 6(3)  of the draft law will be determined and what 
rules the application of these principles may require.  
22. In the context of converting monetary amounts, the ECB notes that Article 6 of the draft law states 
that the exchange and conversion of litas into euro  is based on the irrevocably fixed conversion rate 
and that the conversion rules laid down in Communi ty legal acts apply. However, it appears that 
the provisions of the draft law referring to the conversion of monetary amounts are not uniform in all instances. For instance, Article 2(2) of the draf t law states that the exchange of litas into euro is 
based on the irrevocably fixed conversion rate, wh ilst other provisions, such as Articles 7 and 8(1), 
refer to the conversion of monetary amounts ‘in accordance with the procedure laid down in the 
draft law’. Finally, Article 11(2) of the draft law re fers to the conversion of prices by applying, in 
accordance with the procedure laid down in Articl e 6 of the draft law, the irrevocably fixed 
coversion rate. For the sake of clarity, the draft law should contain a uniform and explicit reference 
to Community requirements for conversion to avoid the risk of the draft law being misinterpreted with the result that Community rounding and expression rules do not apply in all circumstances. 
Conversion of deposits and accounts 23. Article 7 of the draft law provides that deposits and other balances on clients’ accounts in litas will 
be converted into euro on the date of introduction of  the euro free of charge  in accordance with the 
procedure laid down in the draft law.  
24. Whilst not legally indispensable in the light of Ar ticle 14 of Regulation (EC) No 974/98, Article 7 
of the draft law supplements the Community rule to the extent that it adds a prohibition on imposing any charges for converting deposits or other balances. This conforms with the standards 
of good practice, as described in Article 2 of Commission Recommendation 98/286/EC of 23 April 1998 concerning banking charges for conversion to the euro
14. In addition, the ECB 
suggests that the Lithuanian authorities could include a provision in the draft law stating that balances on all types of accounts with credit instit utions and other entities are to be converted 
without charge.  
Financial reporting and other related documents 25. Article 8(2) of the draft law states that financia l, statistical and tax reporting for the periods until 
the date of the adoption of the euro are drawn up in litas, unless other legal acts provide otherwise. 
The ECB does not object to this provision of the draft law, to the extent it is in line with 
Community law.   
                                                     
 
13  Case C-19/03 Verbraucher-Zentrale Hamburg eV v O2 (Germany) GmbH & Co. OHG [2004] 0000.  
14  OJ L 130, 1.5.1998, p. 22. 
 
9 Replacement of national reference rates 
26. Article 9(1) of the draft law replaces, with effect  from the date of introduction of the euro, all 
references to VILIBOR (Vilnius Interbank Offere d Rate) in legal acts, agreements, and other 
documents by references to EURIBOR (Euro Interb ank Offered Rate). References to the VILIBOR 
overnight interest rate are replaced by referenc es to EONIA (Euro Overnight Index Average). The 
ECB understands that VILIBOR is currently publis hed by Lietuvos bankas pursuant to Resolution 
No 211 of Lietuvos bankas’ Board of 10 December 199815.  
27. The ECB understands that there will be no interm ediary stage during which a national substitute 
rate for VILIBOR will be organised. The changes pr oposed by the draft law are therefore welcome, 
since they will further the unity of the Europe-w ide money market and avoid the maintenance of 
national reference rates. The ECB also notes that  it is proposed that VILIBID (Vilnius Interbank 
Bid Rate), which is currently published by Lietuvos bankas, will cease to exist from 
1 January 2006, as set out in Resolution No 68 of Lietuvos bankas’ Board of 28 April 2005. The ECB also suggests inserting a provision in the draf t law allowing parties to deviate from the rule 
described in this paragraph by mutual agreement. 
28. Given that VILIBOR will be replaced by respective euro area reference rates, the draft law should 
also instruct Lietuvos bankas to stop publishing VILIBOR from the date of introduction of the euro in Lithuania (with the exception of historical data ). Alternatively, the ECB expects that Lietuvos 
bankas will amend its Resolution No 211 of 10 December 1998 to the effect that publication of 
VILIBOR will cease.  
29. The Lithuanian authorities should review all nationa l legal acts with a view to verifying whether 
the replacement of VILIBOR with EURIBOR or E ONIA, respectively will always be appropriate. 
For instance, Article 3(1)(d) of Directive 2000/ 35/EC of the European Parliament and of the 
Council of 29 June 2000 on combating la te payment in commercial transactions
16 explicitly 
requires, with regard to participating Member States,  that the interest rate applied by the ECB to its 
main refinancing operations is used when  calculating penalties for late payments.   
Renominalisation of debt securities 30. Pursuant to Article 10(1) of the draft law, the nominal value of all Government securities 
denominated in litas will be changed by dividing, using the conversion rate, the total nominal value 
of securities held by each particular investor in  each individual account, then multiplying it by 100 
and rounding it to the last whole number in accordance with the procedure laid down in Article 6 of 
the draft law. Effectively, the nominal value of securities is then expressed in euro cent. The ECB 
welcomes the regime envisaged for the renominal isation of public debt. The method chosen, 
                                                     
 
15  Valstybės žinios (Lithuanian Official Bulletin), 1998, No. 112-3121,  as amended by Resolution No 68 of Lietuvos 
bankas ’ Board of 28 April 2005 ( Valstybės žinions , 2005, No. 59-2089). 
16  OJ L 200, 8.8.2000, p. 35. 
 
10 i.e. based on individual holdings and rounding to th e euro cent, is similar to the method chosen by 
many Member States on the eve of the entry to the third stage of economic and monetary union.  
31. As proposed in Article 10(2) of the draft law, th e method described in paragraph 30 will also apply 
to other dematerialised debt securities, unless the issuer and the debt holders agree on a different 
method. It is unclear, however, whether Article 10( 2) of the draft law would apply to convertible 
bonds.  
32. The ECB notes that the draft law does not address a number of issues that other Member States 
have considered it appropriate to regulate in rela tion to the redenomination of debt securities, for 
example: (i) the allocation to the issuer/borrowe r of the costs of redenomination/renominalisation 
and (ii) a short limitation period for challengi ng redenomination/renominalisation measures.  
Conversion of shares 33. Pursuant to Article 10(3) of the draft law, the nom inal value of equity securities will be changed by 
dividing the total nominal value in litas of issued securities of the same class and nominal value by 
the conversion rate and the number of issued securitie s of that class and nominal value. In addition, 
Article 10(4) of the draft law prescribes that a decision on the changes to the nominal value of 
equity securities (exact to at least one euro cent) should be taken by the shareholders of a company 
in general meeting at least 30 calendar days before the date of introduction of the euro and that the 
shareholders should decide whether any resulting increase of authorised capital should be covered 
from additional contributions to the capital of th e company or from company funds, and whether 
the difference resulting from any decrease should be transferred to the company’s reserves. 
Article 10(5) of the draft law concerns situations  in which no decision is taken by shareholders 
within the specified time limit and states that the nominal value of equity securities in euro 
calculated as described above should be corrected  to two decimal places to result in a nominal 
value for equity securities in whole euro cent. A ny difference resulting from such change should be 
transferred to the company’s reserves. 
34. In this context, the ECB notes that pursuan t to Article 40(6) of the Act on enterprises
17 the nominal 
value of a share has to be expressed in a whole number of litas without reference to cents. If the 
conversion rules described in paragraph 33 are a pplied, the nominal value of a share may be an 
amount other than a whole amount. The Lithuanian authorities should therefore consider amending 
the Act on enterprises accordingly.  
35. The ECB also notes that entities other than companies operating under the Act on enterprises may 
be affected by the euro changeover and therefor e suggests that the Lithuanian authorities should 
consider whether to adopt special rules concerning su ch entities and in particular with regard to the 
conversion into euro of their authorised capital, shares and other subscriptions to their capital. 
                                                      
17  Valstybės žinios , 2000, No 64-1914. 
 
11 Dual display of prices 
36. The dual display of prices is governed by Artic le 11 of the draft law which lays down the 
following: (i) persons engaged in the sale of goods  (services) will be obliged to display prices of 
goods (services) in euro and in litas no later than 60 calendar days prior to the date of introduction 
of the euro and for 60 calendar days after the date  of introduction of the euro; (ii) prices that are 
displayed will be calculated by applying the irre vocably fixed conversion rate in accordance with 
the procedure laid down in Article 6 of the draft law; (iii) prices displayed in euro and in litas 
should be easy to understand and should not be misleading or presented along with superfluous 
information.  
37. Taking into account Commission Recommendation 98/287/EC of 23 April 1998 concerning dual 
display of prices and other monetary amounts18, it is suggested that the Lithuanian authorities could 
consider providing for rounding to the nearest euro  cent for prices which have been converted from 
litas into euro and for an obligation to clearly indicate what is the unit in which the price is 
determined and what is the counter-value. Certain other issues, such as the display of dual prices on 
receipts, payslips or other financial stat ements, could also be considered.   
Exchange of mutilated euro banknotes and coins  38. As regards the exchange of mutila ted euro banknotes and coins provi ded for in Article 12(3) of the 
draft law, the ECB notes that this provision should  not feature in the draft law. This matter is 
already regulated by Decision ECB/2003/4 of the ECB of 20 March 2003 on the denominations, specifications, reproduction, exchange  and withdrawal of euro banknotes
19 and, in order to ensure 
uniform application of this Decision and thus protect the people’s confidence in euro banknotes and coins, national authorities of Member States without a derogation should refrain from implementing the Decision in national law. In addition, there is no need to mention Decision ECB/2003/4 in the Annex to the draf t law which lists the Community legal acts 
implemented by the draft law.  
Conversion of salaries, pensions and other social benefits 39. The second point of Article 15(1) of the draft law mandates the Government to prepare 
amendments to legal acts concerning the payment of  salaries, pensions and other social benefits. 
The draft law provides for the rounding rules when converting amounts of salaries, pensions and other social benefits, and the ECB understands that the described method would ensure that 
rounding is effected in a neutral manner or in favour of recipients. However, the Lithuanian 
authorities should carefully review the cases in which the above amounts are used as a threshold 
rather than a payable amount.  
                                                     
 
18  OJ L 130, 1.5.1998, p. 26. 
19  OJ L 78, 25.3.2003, p. 16. 
 
12 Adjustment of certain ‘round amounts’ 
40. The ECB notes that the draft law does not deal w ith the adjustment of ‘round amounts’ such as 
fines, charges, taxes etc., after they have been converted into euro. An adjustment of such amounts 
after conversion is a prerogative of national auth orities which may contribute to greater legal 
certainty and transparency, and increase acceptance of the single currency.  
Entry into force of the draft law and repeal of certain other laws 41. As regards the entry into force of the draft law, th e blank reference in Article  16(1) of the draft law 
may appear somewhat misleading, since various provi sions of the draft law will not enter into force 
at the same time. For example, provisions con cerning the dual display of prices will become 
effective prior to the introduction of the euro, while certain other provisions may only enter into force on the date of introduction of the euro in L ithuania. With respect to at least some provisions 
of the draft law, the Lithuanian authorities should c onsider providing for them to enter into force if 
and when the Council, acting in accordance with Article 122(2) of the Treaty, decides that 
Lithuania fulfils the necessary conditions for the adoption of the euro and abrogates the derogation 
of Lithuania or, where relevant, when such an abro gation enters into force. In addition, once these 
decisions are taken by the Community, the Lithuani an authorities might need some time, before the 
draft law becomes effective, to review the latter’ s consistency with the new Community legislative 
framework. 
42. Article 16(2) of the draft law states that a numbe r of laws, including (but not limited to) the Act on 
the issuance of money, the Act on money and the Act on foreign currency in the Republic of 
Lithuania, are repealed from the 15
th day after the date of introduction of the euro. With respect to 
the period starting after the date of introduction of the euro and ending on the 15th day thereafter, 
the aforementioned laws will apply, as stated in Article 16(2) of the draft law, insofar as they do not contradict the draft law. In the ECB’s view, Ar ticle 16(2) of the draft law should be amended to 
provide that the identified laws are, insofar they concern national competencies over monetary 
matters, repealed from the date of introduction of the euro since provisions of national law 
governing monetary matters may not remain in force after the introduction of the euro in Lithuania. 
As soon as the abrogation of the derogation becomes effective with respect to Lithuania, i.e. from 
the date of introduction of the euro, all mone tary matters will be the competence of the 
Community. Provisions of national law, such as t hose governing the national currency, will have to 
be aligned with Community law or, where necessary, repealed from that date. It is important to 
note that national law may set out the modalities of the changeover, but only to the extent this is 
delegated by Community legislation or is not foreseen in and does not contradict Community 
legislation.  
43. The ECB understands that the Litas Committee, whic h was established in 1991 pursuant to the Act 
on the issuance of money, will be dissolved on th e repeal of the Act on the issuance of money and 
that no separate resolution for the dissoluti on of the Litas Committee will be passed by Lietuvos 
 
13 Respublikos Seimas  (the Parliament). However, some of the provisions of the Resolution of the 
Litas Committee of 14 June 1993 on the introduction of Lithuania’s national money and the withdrawal of temporary money-talonas from circul ation, on the basis of which litas banknotes and 
coins of particular denominations were put into circulation, may still need to be repealed by the 
Litas Committee or by the Parliament. Similarly,  the Lithuanian authorities may review other 
Lithuanian legal acts adopted on the basis of the Act on the issuance of money, such as Resolution 
No 461 of Lietuvos bankas’ Board and the Govern ment of 16 June 1993 on the withdrawal of the 
Lithuanian talonas from circulation in Lithuania
20 which makes it mandatory to effect all payments 
only in litas, and Resolution No 585 of Liet uvos bankas’ Board and the Government of 
30 July 1993 on a prohibition on trade in foreign curren cy in the internal market of the Republic of 
Lithuania which, in addition, makes it ma ndatory to express all prices in litas only21.  
44. Points 10 to 19 of Article 16(2) of the draft law repeal the Act on foreign currency in the Republic 
of Lithuania22, as amended (hereinafter the ‘Act on foreign currency’). This act provides, in general 
terms, for the following: (i) that foreign a nd national persons may open accounts in foreign 
currency with credit institutions operating in Lithua nia; (ii) that foreign exchange services may 
only be provided by licensed credit institutions ; (iii) that Lietuvos bankas is empowered to 
establish the rules for the exchange of foreign curre ncy; (iv) that foreign currency may be used for 
non-cash payments, if the parties so agree; the par ties may also agree to u se the euro for both cash 
and non-cash payments; (v) that loans granted by fore ign institutions have to be registered with the 
Ministry of Finance (if the State guarantees their repayment) or Lietuvos bankas; and (vi) that all enterprises, institutions, organisations and cred it institutions are obliged to carry out their 
accounting in accordance with the o fficial litas exchange rate and the reference rates published by 
Lietuvos bankas.  
45. With respect to the Act on foreign currency, th e ECB understands that after its repeal, foreign 
exchange services will be provided pursuan t to the Act on financial institutions
23 and that the 
persons entitled to provide such services will not n ecessarily only be credit institutions. In addition, 
it appears that with the repeal of the Act on fore ign currency: (i) the obligation to report on the 
opening of accounts abroad will be governed by othe r Lithuanian legal acts; (ii) loans granted by 
foreign persons will no longer be registered; and (iii) payments in any foreign currencies will, to 
the extent parties consent to such payment, be allowed. 
46. Article 6 of the Act on foreign currency merits special consideration. This Article states that all 
enterprises, institutions, organisations and cr edit institutions conduct their accounting in 
accordance with the official litas exchange rate and exchange rates between litas and foreign 
currencies, as published by Lietuvos bankas. While  the latter provision is to be repealed on the 
                                                      
20  Valstybės žinios , 1993, No 25-587.  
21  Valstybės žinios , 1993, No 34-790. 
22  Valstybės žinios , 1993, No 28-640. 
23  Valstybės žinios , 2002, No 91-3891.  
 
14 adoption and entry into force of the draft law, th e ECB notes that Lithuanian law currently provides 
for a fixed exchange rate regime. Therefore, a vari ety of legal acts refer to two distinct concepts: 
(i) the official litas exchange rate; and (ii) exch ange rates between litas and foreign currencies, as 
published by Lietuvos bankas.  
The official litas exchange rate  against the anchor currency is established by Lietuvos bankas, in 
coordination with the Government. At the mome nt, the anchor currency for litas is the euro, 
pursuant to resolutions adopted by Lietuvos bankas and the Government24. Any provisions of 
Lithuanian law which provide for a fixed exchange rate regime will need to be repealed upon the 
introduction of the euro in Lithuania in view of the Community’s exclusive competence over exchange rate matters
25 (see, for instance, Article 111 of the Treaty).  
The ECB notes that Lietuvos bankas currently publ ishes exchange rates for litas against major 
currencies. As a general remark, in view of th e Community’s exclusive competence over exchange 
rate matters and the currently existing market-bas ed exchange rate regime in the euro area, a 
Eurosystem member may not individually establish or  ‘fix’ official exchange  rates for any currency 
against the euro with the effect that market partic ipants would be obliged to  trade at these rates. A 
Eurosystem member may, however, establish refe rence exchange rates in  accordance with the 
Eurosystem’s own criteria and methodology. Par ticipating Member States may not impose such 
reference rates on parties who may agree, acting in good faith, on a different exchange rate for their 
transactions which could then be used for the purpose of accounting or financial reporting, for 
example.    
Other issues 47. With regard to the application of penal provisions  on the counterfeiting of banknotes and coins, the 
ECB notes that Article 213 of the Lithuanian Cr iminal Code does not make counterfeiting of 
banknotes and coins which have been withdrawn fro m circulation a criminal offence, although an 
attempt to exchange such counterfeits might be su bject to other provisions of the Criminal Code. 
Nevertheless, the ECB suggests that Lithuanian cr iminal law should provide  for protection against 
counterfeiting of litas banknotes and coins even after they cease to be legal tender in Lithuania, 
especially given the fact that Lietuvos bankas will ex change them into euro for an unlimited period 
of time.   
48. As far as the protection of the financial system  against money laundering is concerned, the ECB 
expects that all institutions and entities invol ved in the euro changeover in Lithuania will 
                                                     
 
24  Resolution No 112 of Lietuvos bankas’ Board of 28 June 2001 on the establishment of the ba se currency and the official 
litas exchange rate ( Valstybės žinios , 2001, No 57-2073); Decision of the Government of 25 June 2001 (protocol No. 30-
18); Resolution No 113 of Lietuvos bankas’ Board of 28 June 2001 on the establishment of th e official Lithuanian litas 
exchange rate ( Valstybės žinios , 2001, No 57-2074); Resolution No 15 of Lietuvos bankas’ Board of 1 February 2002 on 
the base currency and the official litas exchange rate ( Valstybės žinios , 2002, No 12-453); Resolution No 157 of the 
Government of 1 February 2002 on the e ndorsement of the proposal of Lietuvos bankas concerning the base currency and 
the official litas exchange rate and the repeal of resolutions of the Government ( Valstybės žinios , 2002, No 12-417). 
25  Opinion of the ECB of 4 November 2004 at the request of th e Belgian Ministry of Finance on a draft law introducing a 
tax on exchange operations involving foreign exchange, banknotes and currency (CON/2004/34).  
 
15 vigorously enforce all measures necessary to prev ent money laundering. As a specific comment, 
the ECB notes that the Act on the prevention of money laundering26 only applies to operations 
involving banknotes and coins which ar e legal tender (cf. the definiti on of ‘money’ in Article 2(7) 
of the Act). There is resulting uncertainty as to  whether the requirements of the Act on prevention 
of money laundering apply to the exchange of  non legal tender banknotes and coins and in 
particular to the acceptance of such non legal tender banknotes and coins by financial institutions 
and other entities. The Lithuanian authorities should therefore consider what action is needed in 
order to remove this uncertainty . In addition, the ECB notes that it is not clear whether Lietuvos 
bankas is itself obliged under the Act on the prevention of money laundering to report suspicious financial or other operations to  relevant national authorities. The Lithuanian authorities could 
consider inserting such an explicit obligation into  the Act on the prevention of money laundering, 
especially taking into account that the draft la w will impose an obligation on Lietuvos bankas to 
exchange unlimited amounts of litas, be it legal tend er or not, into euro for an unlimited period of 
time.  
49. Regarding the obligations of economic agents in relation to the preparation of automatic vending 
machines in anticipation of the euro changeover, th e draft law could provide for specific rules. As 
the draft law stands now, it appears that the entire non-banking community will be obliged to 
accept both litas and the euro as legal tender durin g the dual circulation period which may pose 
practical difficulties, especially if the conversi on of litas amounts into euro results in uneven 
figures.  
50. Certain provisions of the draft law, such as Articles 2(2), 3(2) and 4, refer to ‘euro cent coins’. The 
ECB understands that both euro cent coins and euro  coins fall under the general concept of ‘euro 
coins’ and therefore a specific referenc e to euro cent coins is unnecessary.  
51. This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 14 June 2005. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                     
 
26  Valstybės žinios , 1997, No 64-1502.