Slovenia is set to adopt the euro on January 1st, 2007, following a positive recommendation issued yesterday by the European Commission and the European Central Bank (ECB).
The central European state will become the first of the 10 new member states that joined the EU in May 2004 to enter the euro zone.
Slovenia will become the 13th member of the euro club when it joins in January.
Another euro candidate Lithuania failed to meet the membership criteria, prompting a defiant response from its government, which said it would try to persuade EU leaders in a summit in June to support its membership despite the negative recommendation.
Lithuanian finance minister Zigmantas Balcytis said his country's entry should not be delayed. "Based on economic arguments, Lithuania could be admitted to the euro zone," said Mr Balcytis, who argued that the inflation criteria on which Lithuania was judged by the commission and the ECB was too narrow.
To join the euro zone, an EU candidate has to have an average annual inflation no higher than the average of the three best performers in the EU plus 1.5 percentage points. The inflation rates of the three - Poland, Sweden and Finland - plus the margin set the ceiling at 2.6 per cent for the 12-month reference period ending in March. Lithuania's inflation rate was 2.7 per cent.
Lithuania has argued that the inflation qualification should be calculated only from the rates of the 13 countries in the euro zone rather than all 25 EU member states. The commission acknowledged that the difference was small but said it expected inflation to rise further in the Baltic state later this year.
"Lithuania meets all the convergence criteria except the one on inflation," said economy and monetary affairs commissioner Joaquín Almunia.
