Three new euro zone entrants likely in 2007

Three small east European nations that joined the EU's ERM-2 waiting room for the single currency are likely to adopt the euro at the start of 2007 at the earliest, the European Commission said yesterday.

Estonia, Lithuania and Slovenia on Sunday became the first of the EU's 10 new members to enter the currency grid.

They need to spend at least two years in the system to qualify for euro-zone membership, so mid-2006 is theoretically the earliest possible date. But the EU's executive said the euro zone normally expands at the start of a year, brushing aside speculation that any of the EU newcomers could adopt the euro in mid-2006.

"Usually the countries adopt the euro at the beginning of the year, not in the middle of the year," Commission spokesman Mr Gerassimos Thomas said.

The last country to join the euro zone was Greece.

There are no formal conditions for joining the grid, where currencies are allowed to fluctuate versus the euro in a band of 15 per cent around a central rate, while countries are judged on their ability to stay close to the central rate.