On 16 May 2006, the European Commission assessed, at the request of the Lithuanian authorities, whether Lithuania is ready to adopt the euro and concluded that, at the present stage, there should be no change in its status as an EU Member State with a derogation.

"Lithuania meets all the convergence criteria except the one on inflation. The average rate of inflation has been slightly above the reference value since April 2005 and is expected to rise gradually until the end of the year . I commend Lithuania for its strong economic performance and sincerely wish that it will soon be able to meet all conditions for euro area membership, a goal which the Commission supports not only for Lithuania but for all EU Member States," said Economic and Monetary Affairs Commissioner Joaquín Almunia.

Article 122(2) of the Treaty requires the Commission to assess the fulfilment of the conditions for full participation in the Economic and Monetary Union by Member States with a derogation at least once every two years or at the request of a Member State.

The Lithuanian authorities asked the Commission and the European Central Bank on 16 March to assess whether the country was meeting the necessary conditions for adopting the euro. Slovenia made a similar request on 2 March (see press release IP/06/623 published today).

In its so-called Convergence Report, the Commission assesses whether Lithuania has achieved a high degree of sustainable convergence, measured against the criteria set out in Article 121(1) regarding the government budgetary position, price stability, exchange rate stability and convergence of long-term interest rates. Compatibility of the legal framework with the Treaty is also examined. The ECB also issued a Convergence Report on the same day as envisaged by the Treaty.