Brussels, 08/03/2004 (Agence Europe) - On Monday evening in Brussels, the Economy and Finance Ministers of the euro zone member countries discussed participation by acceding countries in the European Exchange Rate Mechanism II (ERM II), a necessary stage before adoption of single currency. Furthermore, the Eurogroup, chaired by Irish Finance Minister Charlie McCreevy, noted strong recovery in the world economy and confirmed that the resumption (albeit currently moderate) of economic activity in Europe will be stepped up in 2004 and 2005. Ministers held an exchange of views on the subject of budgetary policies in the euro zone, mainly in Germany, Spain, Portugal and Belgium (for which stability programmes must be assessed on Tuesday by the Ecofin Council).
The European Commission recently increased its contacts with the authorities of acceding countries to seek to convince them not to rush into ERM II. To date, no official request has been presented by the new countries but it is already known that Latvia and Estonia are to apply for ERM II participation from 1 May. Commissioner Pedro Solbes and the euro zone ministers recalled that the new Member States should adjust their economic policies and improve their public finance before taking part in the European exchange rate mechanism. ERM II integration procedure is quite subtle as participation by new members is voluntary and possible at any time, while the main characteristics (fixing a pivotal rate and band width) must be defined between all those participating in the mechanism. After this, the new Member States will not be able to adopt single currency until they have spent at least two years in ERM II, complying with the normal fluctuation margins (i.e. 15% on either side of the pivotal rate of the currency of the acceding country) and without devaluation.
On the fringe of the seminar organised on Friday in Paris on enlargement and single currency, the president of the European Central Bank (ECB), Jean-Claude Trichet, provided for a certain number of countries among the ten new Member States to be an integral part of the euro zone "before 2010", but without taking too many risks.