a news that I would read...
Hungary, Poles May Adopt Euro in 2013, UniCredit Says
By Elizabeth Konstantinova http://www.bloomberg.com/apps/news?pid=20601095&sid=aC_uQRhd3hE4&refer=east_europe
May 12 (Bloomberg) -- Euro-adoption targets for most
central and eastern European nations have been pushed back as
far as 2013 and 2014 because of accelerating inflation, said
UniCredit Group SpA, Italy's largest bank.
Hungary, Poland and the Czech Republic, which joined the
European Union in 2004 will be able to adopt the single
currency by 2013, UniCredit said in an e-mailed statement
today. Bulgaria and Romania, which joined the 27-nation bloc in
2007, will meet terms for euro adoption by 2014, the bank
forecast.
``The prospect of euro adoption is an important anchor for
most countries that joined the EU in 2004 and 2007,'' Unicredit
said. ``Meeting the inflation criterion poses a special
challenge, because of the price pressure observed almost all
over central and eastern Europe.''
Eastern Europe is being hurt more than the West by rising
food and fuel prices because of lower wages and living
standards. The European Central Bank said on May 7 Bulgarian
inflation will continue to accelerate ``over the coming years''
as the EU's poorest state catches up with the bloc's price
levels. The Balkan nation had the second-highest inflation rate
in the EU after Latvia in March, at 13.2 percent, according to
EU-harmonized data.
Slovaks Approved
Slovakia won approval on May 7 to scrap the koruna for the
euro on Jan. 1, becoming the 16th member of the European single
currency. Even so, the ECB said in a report on the same day that
it has ``considerable concerns'' about whether the country can
keep inflation capped afterward.
UniCredit's economists estimate Slovakia's chances of euro
entry on Jan. 1 at 90 percent, according to the statement.
Its switchover must still be approved by European Union finance
ministers in July.
Plans by the Baltic states to join the euro region in 2011 or
2012 are ``optimistic,'' UniCredit said. Estonia, Latvia and
Lithuania, already members of the exchange-rate mechanism, or
ERM, were forced to delay adoption plans because of soaring
inflation. Lithuania says it hopes to join the euro zone after
2010, Estonia in 2011, Latvia in 2012 or 2013.
To adopt the euro, applicants must keep their 12-month
average inflation rates within 1.5 percentage points of the
average of the three EU countries with the slowest price growth
and show that it is sustainable.
Other requirements include keeping budget deficits below 3
percent of gross domestic product, holding government debt to
within 60 percent of GDP, keeping currencies stable and
aligning interest rates with the euro region.
To contact the reporter on this story:
Elizabeth Konstantinova in Bucharest at
ekonstantino@bloomberg.net
Last Updated: May 12, 2008 02:40 EDT
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