Lithuania PM: Aiming For Euro By 2010-2011 - AFP

VILNIUS (AFP)--Lithuania could join the euro zone by 2010 or 2011 after reining in inflation, which has proven the key hurdle to entry, Prime Minister Gediminas Kirkilas said Tuesday. "If we apply our fiscal discipline plan scrupulously, we will meet the convergence criteria and I think Lithuania will be able to join the euro zone in the time frame of 2010 to 2011," Kirkilas said in an interview with Lithuanian radio. "Inflation should fall to 6.5% in the middle of next year, and the falling trend should then continue," he said. Lithuania's 12-month inflation rate jumped to 7.6% in October from 7.1% in September and 5.5% in August. Average annual inflation, one of the key indicators for countries wishing to join the euro zone, also continued its steady climb, rising to 5.1% in October from 4.8% the previous month. Lithuania joined the E.U. in 2004, 13 years after winning back its independence from the crumbling Soviet Union. It had planned to switch from its national currency, the litas, to the euro from the beginning of this year. But the bloc's executive body, the European Commission, barred the Baltic state after it failed to meet E.U.-set inflation criteria by one-tenth of a percentage point. Curbing inflation is a key plank of the E.U.'s "convergence" criteria for would-be members of the euro zone, which currently comprises 13 countries. Lithuania's Baltic neighbors Latvia and Estonia have also had to put their euro-zone plans on hold after failing to dampen inflation.