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EU ministers back Greek euro-zone entry |
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June 6, 2000
LUXEMBOURG, JUNE 5 (AP) - European Union finance ministers Monday backed Greece's bid to adopt the euro on New Year's Day and become the 12th member of the euro-zone currency bloc, EU officials said.
Although EU leaders still need to endorse the decision, they seem certain to do so at a summit meeting June 19-20 in the Portuguese town of Santa Maria da Feira.
Greece was excluded from the launch of the currency on Jan. 1, 1999, because it failed to meet the entry criteria of low inflation, deficit and debt.
Since then, tight economic policies by the government of Prime Minister Costas Simitis have seen Greece fulfill the membership terms of the monetary union. The European Commission and the European Central Bank have already endorsed Greek membership.
"Greece has made a huge improvement," said French Finance Minister Laurent Fabius.
Critics have claimed bringing one of the EU's poorer economies into the currency bloc could weaken the euro, but ministers were adamant Greece was now ready to join.
"Greece will become a member for sure. It meets all the requirements for membership," Austrian Finance Minister Karl-Heinz Grasser told reporters.
The European Commission last week recommended the drachma be absorbed into the common currency at a rate of 340.75 per euro.
Grasser said Greek membership should encourage Britain, Sweden and Denmark to drop their opt out of the single currency.
Ministers from the 11 current euro-zone nations expressed optimism that the euro's rebound in recent days was the start of a period of strength after months of decline against the dollar.
"The euro still has potential to appreciate," said Luxembourg's Prime Minister Jean-Claude Juncker who also serves as finance minister.
The euro has been bouncing back amid signs of a cooling U.S. economy and sustained European growth. The European currency was at 94.35 cents in early trading Monday. That's well up from its early May low of 88.45, but still some 20 percent down from its launch value of dlrs 1.17.
"Euro fundamentals are excellent," Fabius told reporters. "We need a strong and stable euro."
Other ministers appeared to express support for French proposals to strengthen a body known as the "euro-11 council" which comprises euro-zone finance ministers, so the bloc can speak with a more coherent voice on monetary issues.
"The euro-11 (ministers) cooperated well in the past and they should continue to strengthen," said Dutch minister Gerrit Zalm. Fabius said Greece should be allowed to participate in the euro group meeting from July, if the summit in Portugal confirms its membership.
Monday's meeting failed to resolve years of deadlock over plans to crackdown on cross-border tax dodges within the EU as Luxembourg led resistance to a proposals to phase out banking secrecy across the bloc over five years.
The finance ministers will meet in Santa Maria da Feira on June 18 in a last ditch attempt to wrap up a deal before summit in the Portuguese town starts the following morning.
But they were not hopeful of overcoming Luxembourg's opposition to the plan which the EU's smallest country sees as a threat to its thriving international banking center.
"I'm not so very optimistic about Feira," said Finnish Finance Minister Sauli Niinisto.
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