Cyprus and Malta set to join eurozone in 2008
The EU has given Cyprus and Malta a green light to join the common currency, enlarging the eurozone to 15 members.
On 16 May 2007, the Commission, backed by the European Central Bank (ECB) proposed to enlarge the eurozone, admitting Cyprus and Malta in 2008. The two countries managed to meet the necessary Maastricht requirements, concerning budget deficit, currency stability and interest-rate convergence.
Economic and Monetary Affairs Commissioner Joaquín Almunia said that both countries had reached a "high degree of economic convergence with the euro area".
By joining the common currency, Cyprus and Malta hope to boost tourism and foreign investments in their countries.
The final decision, however, rests with member states, which will decide whether to admit the two countries into the eurozone and fix exchange rates for the Cyprus pound and the Maltese lira on 9-10 July.
Slovenia was the first of the new member states, which joined in 2004, to join the euro, in 2007.
The Commission also recommended letting Germany, Greece and Malta off the hook, as the three countries managed to keep their budget deficit below the 3% ceiling.
Almunia stated: "Germany's correction of its deficit is very important for the creditability of the Stability and Growth Pact (SGP)." Germany had broken the stability pact for four consecutive years.
Currently there are still seven countries in excessive deficit procedure: the Czech Republic, Hungary, Poland, Slovakia and the UK, as well as eurozone members Italy and Portugal.