Malta, Cyprus to introduce euro currency Jan. 1

Photo: Malta, Cyprus to introduce euro currency Jan. 1

Cyprus and Malta are ready to introduce the euro on Jan. 1, which will bring to 15 the number of nations sharing the currency the European Union announced Tuesday.

A final assessment of the planned changeover for the two Mediterranean nations found that both had completed preparations, including the delivery of euro notes and coins to banks.

The euro will replace the Cypriot pound and the Maltese lira.

The EU's Monetary and Economic Affairs Commissioner Joaquin Almunia said the two nations, which joined the EU in 2004, had to "pursue policies that continue to deliver economic stability as a precondition for sustained growth and job creation."

The two nations were given the final go-ahead to join the euro zone in July by their EU counterparts.

Cyprus and Malta will bring just over 1 million people to the 318 million who now use the euro. Their economies account for 0.2 percent of euro-zone gross domestic product.

Only one other country that joined the EU at the same time - Slovenia - has so far adopted the euro.

The largest of the EU newcomers - Poland, Hungary, the Czech Republic, Romania and Bulgaria - have yet to set a date for euro entry. Estonia had planned to join next year but will delay membership as inflation surges in its growing economy, a problem that has also slowed Latvian and Lithuanian plans. Slovakia is scheduled to join in 2009.

To keep their shared currency stable, euro nations are supposed to keep overall public debt below 60 percent of gross domestic product.

However, even the largest euro economies have had trouble with these rules and euro candidates can be accepted if they can show that they are on track to meet these limits.

Cyprus became part of the EU a month after Greek Cypriots voted against a United Nations plan that would have led to reunification with the breakaway Turkish Cypriot state in the north of the island. EU officials have warned Turkish Cypriots against starting to use the euro as their currency without approval.