AKEL wants delay in Cyprus euro entry

NICOSIA (Reuters) – Cyprus’s senior governing coalition partner AKEL said yesterday it wanted eurozone admission delayed to 2009, putting it at odds with the rest of the administration which is seeking admission a year earlier. «I think the public will probably welcome admission a year later,» Demetris Christofias, head of the party and speaker in Cyprus’s Parliament, told reporters after a meeting with central bank officials. It is the first time the party has been so categorical in its disagreement with government planning, but state officials said it was unlikely to deflect Cyprus from adopting the euro on the target date of January 1, 2008. The AKEL Communist party, the largest in Cyprus, which is facing a parliamentary election in May, has been floating the idea for several weeks of putting off euro adoption. AKEL party members say Cypriots may need more time to prepare for admission and to avoid any economic shocks a hasty adoption of the euro could bring. Cyprus’s Cabinet last year approved a policy target of euro adoption in January 2008 and this would not change, a Finance Ministry official said. «There has been a decision of the Council of Ministers (Cabinet) to this effect,» the official told Reuters. The Mediterranean state joined ERM 2, the proving ground for euro adoption, in April 2005. Its currency, the pound, is expected to fluctuate within certain limits against the euro for about two years. Jeroen Kremers, Cyprus’s representative on the executive board of the International Monetary Fund, said on Monday the country was «sailing very safely» to euro adoption at the start of 2008.

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