Slovenia to join eurozone in January 2007
LUCIA KUBOSOVA
16.05.2006 @ 18:21 CET
EUOBSERVER / STRASBOURG – Slovenia is set to become the 13th member of the eurozone following a positive assessment of its economic situation by the European Commission on Monday (16 May).
The commission proposed that Slovenia kicks off the "long period of eurozone enlargement" as the first of the ten EU newcomers to join the single currency in January 2007.
However, as widely expected, Lithuania's bid to join the eurozone next year, was rejected by Brussels.
Only the Czech and Lithuanian commissioners reportedly argued in favour of Vilnius during the commission's weekly policy meeting on Tuesday.
Speaking to journalists following the debate among the commissioners, monetary affairs commissioner Joaquin Almunia said both countries were legally prepared to join the euro but Lithuania did not meet one of the five economic criteria, concerning inflation.
He argued the country was not only "slightly above" the reference rate calculated as 2.6 per cent in March by Eurostat, it also failed to prove the sustainability of its current inflation rate.
According to the commission's estimates, Lithuania will record an average inflation of 3.5 per cent in 2006.
"We have taken into account the criteria as they are spelled out in the treaty - nothing else but them," said the commissioner, adding Brussels may still give a positive answer to Vilnius next year if the country's government takes measures to curb inflation.
The rule, which states that euro newcomers should be judged by the average inflation rates in the whole of the EU - not just the eurozone - has been criticised by several economists, including the eurozone's chief Jean-Claude Juncker.
But Mr Almunia commented that a similar thing happened when Greece was joining in 2000, adding that the commission "simply cannot invent a new treaty."
He said EU policy makers did have a possibility to challenge the Maastricht rules during the debate on the new EU constitution, but although "not everybody thought this particular rule was rational, nobody proposed to change it."
Slovenia to make crucial preparation
The commission's recommendation on Slovenia is to be debated by EU leaders at a summit next month and officially endorsed by the bloc's finance ministers on 11 July.
The ministers will also agree on the exchange rate between the country's tolar and the euro.
Mr Almunia urged the Slovenian authorities to use the remaining time to prepare the citizens and business community for the euro and avoid problems that other member states have encountered.
"We have seen cases of price abuses at the time of the switch to the euro, but also good examples of how to prevent them," he noted.
The commissioner also said that Ljubljana should prepare the information campaigns for the impact of the single currency, as the public image of its impact "is usually much worse than reality."
