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New EU members fall short of euro currency criteria

New EU members fall short of euro currency criteria
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Six of the ten new members of the European Union face a tough time gettting their budgets in shape if they want to use the euro as their currency.

The European Central Bank has said the newcomers will have to work extra hard to cut their budget deficits. Monetary Affairs Commissioner Joaqiun Almunia told reporters: “The conclusion of the 2004 report is that none of the countries examined fulfill all of the conditions for adopting the euro.” Poland heads the list, which includes Hungary, the Czech and Slovak Republics, Cyprus and Malta. Poland wants to join the euro by 2007 if it can slash its budget deficit in time. The European Commissioner said its deficit will be 5.7% GDP this year and 3.9% next year. Poland’s Finance Minister, Miroslaw Gronicki, has said it is realistic to achieve all of the EU’s criteria by the end of 2007. Poland’s central bank has said it will conduct monetary policy in a way that ensures the country can join the euro quickly, but the Warsaw government has a problem with state pensions which could increase the deficit. It is looking for ways to address that and still stay within European Union rules.