NICOSIA (AFP) - Cyprus on Saturday welcomed its entry into the European Exchange Rate Mechanism (ERM II), with the country set to adopt the euro as soon as 2007.

“Preparations for the introduction of the euro as soon as possible have already begun with the implementation of a strategic plan,” said a statement by President Tassos Papadopoulos.

Cyprus officially joined the ERM II on Friday night, along with Latvia and Malta. The three countries were among the 10 countries that joined the EU last May.

Papadopoulos said joining the ERM II will bring “specific and tangible benefits to the island’s economy.”

“I am pleased to announce that the important economic goal we had set to see the Republic of Cyprus join the ERM II has been achieved.” The president said the decision vindicated the government’s austerity drive, which has cut the public deficit to 4.2 percent of GDP in 2004 from a high point of over double the Maastricht convergence criteria of 3 percent.