EU Commissioner to back Cyprus’ entry into eurozone

European Union Commissioner for economic and monetary affairs Joaquin Almunia is to propose Cyprus’ entry into the eurozone at next week’s Commission meeting.
Almunia’s suggestion was discussed on Thursday at a special meeting of EU technocrats and today senior officials were due to meet to prepare next Wednesday’s meeting in Brussels.
The Commission draft proposal to the EU finance ministers points out that Cyprus fulfills the criteria relating to fiscal deficit, public debt, inflation, long-term interest rates and a two-year stay in ERM.
The European Central Bank will also submit a proposal on Cyprus’ entry into the eurozone and both documents will be presented to the finance ministers on June 5 and then for a political decision on the matter at the EU summit on June 21-22.
Almunia will also suggest the accession of Malta to the eurozone on January next year.
Public deficit stood at 1,5 per cent of the GDP in 2006, while the ceiling in the EU is 3 per cent.
Public debt in 2006 in Cyprus was 65,3 per cent of the GDP with a downward trend, which is expected to continue in 2007. EU regulations stipulate that public debt must not exceed 60 per cent of the GDP.
According to EU criteria, inflation must not be higher than 1,5 per cent from the average of the top third better figures in the EU.
Inflation in Cyprus stands at 2 per cent and its criterion for entry to the eurozone is 3 per cent.