European Union finance ministers have given Cyprus and Malta the go-ahead to adopt the euro. To meet strict EU economic rules for euro nations, the two countries had taken various measures; among them, Cypriot workers accepted lower wage rises to avoid inflation while Malta paid off debt to cut its budget deficit.
The Portuguese finance minister Teixeira dos Santos chaired the ministers monthly meeting in Brussels because Portugal holds the rotating presidency of the European Union until the end of the year.
He told reporters: “Cyprus and Malta will join the euro on 1 January next year. I would like to congratulate these two countries for this achievement, which is the result of appropriate policies.”
The ministers also expressed concern at delays in euro zone countries balancing their budgets, which they have agreed to do by 2010.
However the new French President Nicolas Sarkozy and his finance minister Christine Lagarde now say it could take longer. The French deficit was supposed to fall to 1.8% of GDP this year, France says in fact it will be 2.4%. Italy’s deficit reduction programme is also falling behind schedule and its deficit this year is also forecast to be 2.5%.
To justify the delays, the French are promising structural reforms and Dos Santos responded: “ We can’t ignore that, due to the size of its economy, the French structural reforms programme will certainly, have a positive impact in the euro area and in the EU.”