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