New Member States urged to join euro in step

Date: 02/12/04

By Anna McLauchlin

The European Commission has said that the new member states should adopt the euro in one step rather than passing through the original transitional phase for the current eurozone members.

As it stands, four states - Estonia, Lithuania, Slovenia and Cyprus - have announced that they will join the single currency by 2007 and the other six have said that they want to join by 2010 at the latest. The former three have already entered the 'euro waiting room', which is an exchange rate mechanism that pegs national currencies to the single currency for at least two years to ensure stability.

All countries in the euro area except Greece went through a three-year transitional period before introducing euro notes and coins on 1 January 2002, but the Commission said in November that this was “neither necessary nor advisable” for the new countries.

Five new member states are considering a 'big bang' scenario where they would lock their currency into the euro exchange rate and launch notes and coins simultaneously.

The Commission will launch an information campaign on the single currency after an independent survey published in October found that most citizens in the new member states were unfamiliar with the facts surrounding the introduction of the euro.

The European Commission announced in November 2004 that new Member States should not go through the 3-years transitional period the original eurozone members had to apply from 1999-2001 before adopting the single currency. Instead they might lock their currency into the euro exchange rate and launch euro notes and coins simultaneously.