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)
Date: 2005-06-14
Institutions: European Central Bank
Subjects: Lithuania, euro, euro area, monetary integration, money, national law

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 based on Article 105(4) of the Treaty establishing 

the European Community and the first three indents of Article 2(1) of Council Decision 98/415/EC 

of 29 June 1998 on the consultation of the European Central Bank by national authorities regarding 
draft legislative provisions1, 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 references 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  withdrawal  of  litas  from  circulation  and  the  continuing 

status of litas as legal tender for 15 calendar days after the date of introduction of the euro, (xi) that 

1  

OJ L 189, 3.7.1998, p. 42. 

 
 
 
                                                      
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  litas  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 the 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 explanations 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 legal acts which are to be implemented by adopting 

the  draft  law.  The  ECB  understands  that  the  inclusion  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 three concepts: (i) the date of introduction of the 

euro; (ii) the irrevocably fixed conversion rate between the euro and litas; and (iii) the exchange of 

litas into euro. First, the date of introduction of the euro is defined as a date laid down in a decision 

of  the  Council  to  abrogate  the  derogation  concerning  Lithuania  by  following  the  procedure  laid 

down  in  Article  122(2)  of  the  Treaty.  Second,  the  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 coins as well as the crediting 

of a client’s account by applying the 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  legislation  on  monetary  matters  (in  particular 

Council  Regulation  (EC)  No  1103/97  of  17  June  1997  on  certain  provisions  relating  to  the 
introduction of the euro2, 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-participating Member States, only 

provides  for  the  euro  changeover  in  the  original  11  participating  Member  States  (and  later  in 

2  

3  

4  

OJ L 162, 19.6.1997, p. 1. Regulation as last amended by Council Regulation (EC) No 2595/2000 of 27 November 2000 
(OJ L 300, 29.11.2000, p. 1). 
OJ L 139, 11.5.1998, p. 1. Regulation as last amended by Council Regulation (EC) No 2596/2000 of 27 November 2000 
(OJ L 300, 29.11.2000, p. 2). 
OJ  L  359,  31.12.1998,  p.  1.  Regulation  as  last  amended  by  Council  Regulation  (EC)  No  1478/2000  of  19  June  2000 
(OJ L 167, 7.7.2000, p. 1). 

2 

 
                                                      
relation to Greece, which adopted the euro on 1 January 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 the draft law to be adopted in the second half of 

2005,  and  that  implementing  regulations  will  be  adopted  by  1  July  2006.  However,  although  the 

date of entry into force of the draft law is left blank in the draft law, it is intended that the draft law 

and  related  implementing  regulations  should  enter  into  force  only  upon  abrogation  of  the 

derogation  in  respect  of  Lithuania.  The  ECB  understands  the  purpose  of  adopting  national 

legislation supplementing Community legislation on monetary matters at an early stage. However, 

it should be remembered that the exclusive competence on monetary matters regarding the euro lies 

with the Community. National legislation on monetary matters may only complement Community 

law  when  Community  law  provides  for  it,  as  was  the  case  with  Regulation  (EC)  No  974/98. 

Therefore,  as  a  preliminary  remark,  the  ECB  considers  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 regarding 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 inconsistency 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 circulation period of 15 calendar days with respect to 

banknotes and coins denominated in litas and states 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 adoption 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 drafted 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  euro  banknotes  and  coins  are  widely  available  in 

Member States with a derogation. Given the difference 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 authorities 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 

3 

 
Article 13 of the draft law, and evaluate whether this 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  pertaining  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 Regulation (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 alphabets’. 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 pursuant to Article 5(3) of the Act concerning the 
conditions  of  accession7.  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  singleness  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 singular case is legally required to be consistently 

rendered in all national legal acts as the ‘euro’.  

5  
6  

7  

Published in October 2004 pursuant to Article 122(2) of the Treaty. 
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. 
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 Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, 
the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is 
founded (OJ L 236, 23.9.2003, p. 33). 

4 

 
                                                      
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 the draft law also states that euro banknotes issued by 

the ECB and by the national central banks (NCBs) and euro coins and euro cent 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 the 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 draft law is therefore to substitute 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 appropriate sanctions which were not provided for in 

a  regulation  and  may  continue  to  regulate  various  related  issues  which  are  not  covered  in  a 
regulation9 or may use appropriate methods to prevent 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  measures11.  The  technique  of  incorporating 

provisions  of  Community  regulations  into  national  law  may  only  be  accepted  under  exceptional 

circumstances. In this regard, the Court of Justice has stated, in Case 272/83 Commission v Italian 
Republic12, that in that particular instance the application in Italy of a system for encouraging the 

8  

9  
10  
11  
12  

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  obligations  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  Community’.  This  position  was  also  reiterated  in  Case  50/76 
Amsterdam Bulb BV v Produkschap voor Siergewassen [1977] ECR 137. 
Case 50/76 above. 
Case 39/70 Norddeutsches Vieh- und Fleischkontor GmbH v Hauptzollamt Hamburg-St. Annen [1971] ECR 49. 
Case C-403/98 Azienda Agricola Monte Arcosu v Regione Autonoma della Sardegna [2001] ECR I-103. 
[1985] ECR 1057. 

5 

 
                                                      
formation  of  producer  groups  could  not  be  ensured  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  comprehensible  to  the  persons  to  whom  they  apply,  some 

elements  of  Community  regulations,  cannot  be  regarded,  in  the  Court’s  view,  as  a  breach  of 

Community law.  

13.  Considering  that  Community  secondary  legislation  on  monetary  matters  will  apply  directly  in 

Lithuania  once  its  application  is  extended  to  Lithuania  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 (EC) 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  draft  law  deals  with  references  to  the  litas  in  the 

following  instruments:  (i)  legal  acts;  (ii)  contracts;  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 Regulation (EC) No 974/98 as ‘legislative and statutory 

provisions,  acts  of  administration,  judicial  decisions,  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, that 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 does not prejudice the general principle of parties’ 

contractual autonomy and would not prevent debtors and creditors to agree on discharging debts by 

way of non-cash money or in a currency other than the one being legal tender. 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 discharge of debts. In addition, mandatory law and 

customary law may indicate limits to the unrestricted use of cash as means for debt settlement. 

Publication of images of euro banknotes 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 

6 

 
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, since it is not clear from Article 4 of the draft law 

whether it also applies to euro coins 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 banknotes and coins falls within that definition. In 

respect  of  the  precise  wording  of  that  definition,  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, the 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 balances 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  branches  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 accept, 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  period  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  will  be  obliged  to  exchange  litas  to  euro  without 

charge.   

Conversion rate and supplementary rounding rules 

20.  With respect to the conversion rate and the recalculation 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 conversion from litas into euro. The ECB notes that 

in  certain  circumstances  a  more  precise  conversion  of  monetary  amounts  may  be  appropriate,  in 

particular  when  the  application  of  general  rounding rules  would  result  in  numbers  different  from 

those  expected  by  interested  parties,  e.g.  consumers,  as  demonstrated  in  a  recent  case  before  the 

7 

 
Court of Justice13. Therefore, the Lithuanian authorities may consider it relevant to assess each case 

individually in order to determine whether interim 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 Community 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 draft law states that the exchange of litas into euro is 

based on the irrevocably fixed conversion rate, whilst 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 refers to the conversion of prices by applying, in 

accordance  with  the  procedure  laid  down  in  Article  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 Article 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  euro14.  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  institutions  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 financial, 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  
14  

Case C-19/03 Verbraucher-Zentrale Hamburg eV v O2 (Germany) GmbH & Co. OHG [2004] 0000.  
OJ L 130, 1.5.1998, p. 22. 

8 

 
                                                      
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  Offered  Rate)  in  legal  acts,  agreements,  and  other 

documents by references to EURIBOR (Euro Interbank Offered Rate). References to the VILIBOR 

overnight interest rate are replaced by references to EONIA (Euro Overnight Index Average). The 

ECB understands that VILIBOR is currently published 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  intermediary  stage  during  which a  national  substitute 

rate for VILIBOR will be organised. The changes proposed by the draft law are therefore welcome, 

since they will further the unity of the Europe-wide 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 draft 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 national legal acts with a view to verifying whether 

the replacement of VILIBOR with EURIBOR or EONIA, 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  late  payment  in  commercial  transactions16  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  renominalisation  of  public  debt.  The  method  chosen, 

15  

16  

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). 
OJ L 200, 8.8.2000, p. 35. 

9 

 
                                                      
i.e. based on individual holdings and rounding to the 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, the 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 relation to the redenomination of debt securities, for 

example: (i) the allocation to the issuer/borrower of the costs of redenomination/renominalisation 

and (ii) a short limitation period for challenging redenomination/renominalisation measures.  

Conversion of shares 

33.  Pursuant to Article 10(3) of the draft law, the nominal 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 securities 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 the 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. Any difference resulting from such change should be 

transferred to the company’s reserves. 

34. 

In this context, the ECB notes that pursuant to Article 40(6) of the Act on enterprises17 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  applied,  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  therefore  suggests  that  the  Lithuanian  authorities  should 

consider whether to adopt special rules concerning such 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. 

10 

 
                                                      
Dual display of prices 

36.  The  dual  display  of  prices  is  governed  by  Article  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 irrevocably 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 statements, could also be considered.   

Exchange of mutilated euro banknotes and coins  

38.  As regards the exchange of mutilated euro banknotes and coins provided 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 banknotes19 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  draft  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  
19  

OJ L 130, 1.5.1998, p. 26. 
OJ L 78, 25.3.2003, p. 16. 

11 

 
                                                      
Adjustment of certain ‘round amounts’ 

40.  The  ECB  notes  that  the  draft  law  does  not  deal  with  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  authorities  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, the blank reference in Article 16(1) of the draft law 

may appear somewhat misleading, since various provisions of the draft law will not enter into force 

at  the  same  time.  For  example,  provisions  concerning  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 Lithuania. With respect to at least some provisions 

of the draft law, the Lithuanian authorities should consider 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 abrogation enters into force. In addition, once these 

decisions are taken by the Community, the Lithuanian 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 number 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 15th 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, Article 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  monetary  matters  will  be  the  competence  of  the 

Community. Provisions of national law, such as those 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, which was established in 1991 pursuant to the Act 

on the issuance of money, will be dissolved on the repeal of the Act on the issuance of money and 

that  no  separate  resolution  for  the  dissolution of  the Litas  Committee  will  be  passed  by  Lietuvos 

12 

 
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 circulation, 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 Government of 16 June 1993 on the withdrawal of the 
Lithuanian talonas from circulation in Lithuania20 which makes it mandatory to effect all payments 

only  in  litas,  and  Resolution  No  585  of  Lietuvos  bankas’  Board  and  the  Government  of 

30 July 1993 on a prohibition on trade in foreign currency in the internal market of the Republic of 
Lithuania which, in addition, makes it mandatory 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  and  national  persons  may  open  accounts  in  foreign 

currency  with  credit  institutions  operating  in  Lithuania;  (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 currency; (iv) that foreign currency may be used for 

non-cash payments, if the parties so agree; the parties may also agree to use the euro for both cash 

and non-cash payments; (v) that loans granted by foreign 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  credit  institutions  are  obliged  to  carry  out  their 

accounting in accordance with the official litas exchange rate and the reference rates published by 

Lietuvos bankas.  

45.  With  respect  to  the  Act  on  foreign  currency,  the  ECB  understands  that  after  its  repeal,  foreign 
exchange  services  will  be  provided  pursuant  to  the  Act  on  financial  institutions23  and  that  the 

persons entitled to provide such services will not necessarily only be credit institutions. In addition, 

it  appears  that  with  the  repeal  of  the  Act  on  foreign  currency:  (i)  the  obligation  to  report  on  the 

opening of accounts abroad will be governed by other 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  credit  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  
21  
22  
23  

Valstybės žinios, 1993, No 25-587.  
Valstybės žinios, 1993, No 34-790. 
Valstybės žinios, 1993, No 28-640. 
Valstybės žinios, 2002, No 91-3891. 

13 

 
                                                      
adoption and entry into force of the draft law, the ECB notes that Lithuanian law currently provides 

for a fixed exchange rate regime. Therefore, a variety of legal acts refer to two distinct concepts: 

(i) the official litas exchange rate; and (ii) exchange 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  moment,  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 matters25 (see, for instance, Article 111 of the Treaty).  

The  ECB  notes  that  Lietuvos  bankas  currently  publishes  exchange  rates  for  litas  against  major 

currencies. As a general remark, in view of the Community’s exclusive competence over exchange 

rate  matters  and  the  currently  existing  market-based  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 participants would be obliged to trade at these rates. A 

Eurosystem  member  may,  however,  establish  reference  exchange  rates  in  accordance  with  the 

Eurosystem’s  own  criteria  and  methodology.  Participating  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  Criminal  Code  does  not  make  counterfeiting  of 

banknotes and coins which have been withdrawn from circulation a criminal offence, although an 

attempt to exchange such counterfeits might be subject to other provisions of the Criminal Code. 

Nevertheless, the ECB suggests that Lithuanian criminal 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 exchange 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  involved  in  the  euro  changeover  in  Lithuania  will 

24  

25  

Resolution No 112 of Lietuvos bankas’ Board of 28 June 2001 on the establishment of the base 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 the 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 endorsement 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). 
Opinion of the ECB of 4 November 2004 at the request of the Belgian Ministry of Finance on a draft law introducing a 
tax on exchange operations involving foreign exchange, banknotes and currency (CON/2004/34).  

14 

 
                                                      
vigorously  enforce  all  measures  necessary  to  prevent  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 are legal tender (cf. the definition 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 law will impose an obligation on Lietuvos bankas to 

exchange unlimited amounts of litas, be it legal tender 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, the 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  during  the  dual  circulation  period  which  may  pose 

practical  difficulties,  especially  if  the  conversion  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 reference 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. 

15