ECONOMY

Slovenia set for 2007 euro entry

ROME (Reuters) – Slovenia could possibly adopt the euro currency in a year, European Central Bank Executive Board member Lorenzo Bini Smaghi said, a move likely to make it the first EU newcomer to join the monetary union. «Slovenia is certainly the country that is coming closest in terms of the (economic) indicators,» Bini Smaghi told Italy’s Rai radio in an interview broadcast on Saturday. «One could put forward the hypothesis of an entry in exactly a year.» Bini Smaghi cited Slovenia’s low inflation and budget deficit, but said fellow candidates Lithuania and Estonia had problems with inflation which could take longer to resolve. The ECB and European Commission must assess whether euro hopefuls meet the requirements for joining the 12-nation currency club. Six of the 10 countries which joined the European Union in 2004 have entered the exchange rate mechanism, a proving ground for euro membership. Austrian Finance Ministry sources told Reuters on Friday that Vienna, which holds the European Union presidency, will lobby EU finance ministers next week to allow Slovenia to adopt the euro in 2007. Slovenia’s central bank and finance ministry have both said the former Yugoslav country is ready for euro entry next year. The country meets euro entry requirements for its public debt, budget deficit and interest rates, and in November it managed to bring its inflation down to the maximum level allowed for euro candidate countries. When Slovenia joined the exchange rate mechanism, the central parity of the tolar was set at 239.64 to the euro. It has been stable since. European Monetary Affairs Commissioner Joaquin Almunia said on Thursday that neither Lithuania nor Estonia currently meet the euro criteria. Estonia has already said it will wait.

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