Prime Minister Andrius Kubilius says that Lithuania will press ahead with a plan to adopt the euro in 2014 and accompanying fiscal reforms

Lithuania’s central bank governor Vitas Vasiliauskas said the country was unlikely to hit that target due to price pressures, setting the scene for above-target inflation to thwart its ambition of joining the single currency for the second time.

Analysts agreed it would be no surprise if Lithuania missed the target, but Prime Minister Andrius Kubilius said his government would not waver from its accession programme.

"The government is aware of the inflation challenge, but is going to stick to its plan to meet the euro adoption criteria by the end of 2012, including budget deficit," Kubilius told Reuters via his spokesman.

Lithuania missed euro adoption in 2007 after inflation overshot the entry criterion, as stipulated by the Maastricht Treaty, by a whisker.

Data earlier on Wednesday showed consumer prices rose at their fastest rate in two years in May.

"Inflation is going to be the main obstacle (again)," said Vasiliauskas, citing high energy prices and becoming the first top official to say the entry timetable was unrealistic.

"Our forecasts show that we will not be able to meet the (entry) criteria in 2012 or in 2013...

"The fact is that under our forecasts, 2014 does not look like the year when we can have the euro ...," he told a news conference.

The central bank expects inflation to rise to 3.9 percent in 2012 from 3.8 percent this year.

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http://www.reuters.com/article/2011/06/08/lithuania-euro-idUSLDE7570MH20110608