| Abstract [eng] |
This paper analyzes the legal framework of the Exchange Rate Mechanism II (ERM II), its objectives and practical aspects. This mechanism is the exchange rate policy of the euro area and non-euro area EU Member States participating in this mechanism, which aims to ensure the economic stability of the European Union and to prepare the countries for the adoption of the euro. ERM II plays an important role in Economic and Monetary Union as mean to ensure a stable economic and monetary system and stable prices. Moreover, it is one of the stages for countries to join the euro area. The ERM II is regulated in the most important legal acts of the European Union - the Treaties of Rome and Maastricht, as well as in more detailed legislation - the resolution and the treaty. When a Member State joins ERM II and agrees on central exchange rate and fluctuation margins, it is supported by intervention at the marginal and coordinated intramarginal intervention mechanisms. Intervention at the marginal is performed automatically, but also countries can agree on coordinated intramarginal intervention. Both types of intervention are carried out by the national banks of the Member States and the European Central Bank through the intervention to the foreign exchange market and thus adjusting the exchange rate. For a long time, Lithuania used the currency board as a currency management mechanism and used to fix the litas exchange rate with the US dollar. Finally, Lithuania became one of the first ERM II members, of those who joined the European Union in 2004. ERM II was used by Lithuania for more than ten years before the euro was introduced in 2015. ERM II will continue to be one of the key mechanisms in the European Union's public finance sector, but most of its participants will only be temporary as their participation is only one of the convergence requirements. |
