Slovenia to join euro, no Lithuania

Slovenia will join the euro on Jan. 1, but high inflation couldn’t allow Lithuania to do the same. EU finance ministers had "a lengthy debate" about the merit of admitting two EU newcomers, but no final decision was made.

Photo: Slovenia to join euro, no Lithuania

Slovenia to join euro, no Lithuania

Officials noted the other finance ministers were in no mood to bend the rules for Lithuania whose inflation rate is expected to soon reach 3.5 percent, well over a maximum of 2.6 percent.

The 25 EU leaders who meet in Brussels next week will likely endorse that view. The European Commission has upset Lithuania by saying it meets all euro membership criteria except for the inflation ceiling and that there is no room for compromise.

Lithuanian officials have reacted angrily to that rebuff which was based on figures showing that the average inflation rate in Lithuania during the 12 months to March 2006 was 2.7 percent, just above a 2.6 percent guideline.

The "no" to Lithuania has caused friction at the EU head office itself, where Lithuania 's EU Commissioner Dalia Grybauskaite has complained that the rules were being applied dogmatically.

Slovenia a country of 2 million that is one of the most prosperous in southeast Europe with an inflation rate of under 3 percent and economic growth at about 4 percent remains on track to join the common currency in 2007.

The EU finance ministers are to make a final decision July 11, reports the AP.

N.U.