Big boys lagging behind
The European Bank for Reconstruction and Development (EBRD) has said it expects the larger new members of the European Union - Poland, Hungary, Slovakia and the Czech Republic - to remain outside the single currency bloc until the end of this decade.
"We anticipate their entry into the eurozone around 2010," Steven Fries, the EBRD's deputy chief economist, told a news conference during the bank's annual meeting in the Serbian capital of Belgrade.
Fries warned that fiscal policies in the four new members from central Europe remained a threat to swift adoption of the euro, adding that fiscal consolidation already implemented in these countries was mostly due to better economic growth rather than tough spending measures necessary for sustained budget health.
However, he said Estonia, Slovenia and Lithuania, which joined the ERM-2 (exchange rate mechanism) last year, and Latvia, which joined ERM-2 in April, should be able to exchange their currencies for the euro in two to three years' time.
"They will proceed smoothly into the euro zone ... and join in 2007 or 2008," said Fries.
Under the Maastricht Treaty, a country must have its currency inside the ERM-2 for at least two years prior to adopting the single currency.
Fries also said he did not expect possible rejections of the EU Constitution in France and the Netherlands to have any negative impact on currencies aspiring for the eurozone.
"The impact of these votes is likely to be minimal, if at all," he said. "It just means that [EU policy-making] will be more cumbersome, but it will continue ... And I don't think it will complicate [new EU members'] entry to the eurozone." (Reuters)
"We anticipate their entry into the eurozone around 2010," Steven Fries, the EBRD's deputy chief economist, told a news conference during the bank's annual meeting in the Serbian capital of Belgrade.
Fries warned that fiscal policies in the four new members from central Europe remained a threat to swift adoption of the euro, adding that fiscal consolidation already implemented in these countries was mostly due to better economic growth rather than tough spending measures necessary for sustained budget health.
However, he said Estonia, Slovenia and Lithuania, which joined the ERM-2 (exchange rate mechanism) last year, and Latvia, which joined ERM-2 in April, should be able to exchange their currencies for the euro in two to three years' time.
"They will proceed smoothly into the euro zone ... and join in 2007 or 2008," said Fries.
Under the Maastricht Treaty, a country must have its currency inside the ERM-2 for at least two years prior to adopting the single currency.
Fries also said he did not expect possible rejections of the EU Constitution in France and the Netherlands to have any negative impact on currencies aspiring for the eurozone.
"The impact of these votes is likely to be minimal, if at all," he said. "It just means that [EU policy-making] will be more cumbersome, but it will continue ... And I don't think it will complicate [new EU members'] entry to the eurozone." (Reuters)
