Draghi welcomes Lithuania to Eurozone, money supply in single currency area grows faster than expected

Mario Draghi, speaking at the Euro Conference in Vilnius, Lithuania welcomed the country to the Eurozone, which it will join in the beginning of next year, becoming the 19th member of the single currency area. ECB President mentioned structural reforms, which were important for Lithuania to adopt the Euro and it managed to carry them out successfully. Last year, country's economy rose 3.3% and budget deficit decreased to 2.1% of GDP, compared with 9.4% back in 2009. As a result, Lithuania will become the last Baltic country to join the Eurozone, as Estonia and Latvia did it in 2011 and 2014, respectively.

In addition to that, money supply in the common currency area is rising faster than predicted. The broad monetary aggregate M3 added 2% in August, up from 1.8% growth a month before and 1.6% in June. Taking into account M1 aggregate, which consists of cash and overnight bank deposits, it surged 5.8% last month. On the other hand, loans to the private sector decreased 1.5% in the previous month, even though the pace of decline slowed from 1.6% in July and 1.8% in June. As the ECB is now taking active actions to heat up economy of the region, loans to real economy will play a key role in that. Last week, the European Central Bank started its TLTRO program, aimed to lend cheap funds to banks. During the first offering Eurozone's financial institutions borrowed 82.6 billion euro.