[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Monday, 28 June, 2004, 06:00 GMT 07:00 UK
EU newcomers prepare to join euro
Finnish man examines euro note
The euro could soon mystify a new batch of people
Estonia, Lithuania and Slovenia have fixed the value of their currencies against the euro as the first step in adopting the single currency.

They are the first of the European Union's 10 newcomers to take such a step and aim to adopt the euro in 2007.

The countries will ensure that their currencies do not rise or fall by more than 15% against the euro.

Central banks would have to intervene in the currency markets should there be a deviation of more than this amount.

The three countries' finance ministers promised to pursue "sound fiscal policies" to keep their budgets in control and not undermine the stability of the single currency.

The move comes as the rules which govern spending and the euro, the Growth and Stability Pact, are being rethought

Change the rules

Germany and France, the two largest EU economies, have failed to stick to the rules which prevent a country's budget deficit from rising to more than 3% of its Gross Domestic Product (GDP).

Italy and Portugal are also expected to breach the 3% ceiling this year.

Earlier this month, the EU's economic affairs commissioner Joaquin Almunia said the pact had been "too stringent" and announced a formal review into the treaty.

Six of the 10 newcomers to the EU, including Slovakia, have budget deficits of more than 3% of GDP.

Estonia, Lithuania and Slovenia were amongst the 10 new countries which joined the 15-country EU on 1 May.


SEE ALSO:
Euro pact rules to be reviewed
24 Jun 04  |  Business
Fresh call for euro pact reform
14 Jun 04  |  Business
The fall and rise of the euro
05 Jan 04  |  Business
Dollar drags down Europe's firms
22 Jan 04  |  Business


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific