EU Leaders OK Euro for Cyprus, Malta

BRUSSELS, Belgium — Cyprus and Malta received the go-ahead Thursday from European Union leaders to join the euro currency zone in January.
Final approval will come from EU finance ministers on July 10, bringing the number of countries using the currency to 15.
Cyprus and Malta bring just over 1 million people to the 318 million who now use the euro. Their economies account for only 0.2 percent of euro-zone gross domestic product.
One area of concern was what might happen if the Greek Cypriot part of the island reunites with the breakaway northern Turkish Cypriot republic.
As things stand, only the Greek Cypriot state is recognized by the European Union and will adopt the euro, leaving the Turkish lira as the currency in northern Cyprus.
EU officials insist that letting Cyprus into the euro zone is purely an economic issue. Formal documents barely mention northern Cyprus beyond a minor reference in a European Central Bank report that predicts substantial costs to develop the Turkish Cypriot part after reunification.
EU Economic and Monetary Affairs Commissioner Joaquin Almunia has warned the Turkish Cypriots against using the euro even though it is not part of the euro zone _ as non-EU members Montenegro and Andorra do.
The Greek Cypriot part of the island joined the EU in May 2004, a month after voting against a United Nations plan that would have led to reunification with the northern state. Turkish Cypriots had voted in favor of the plan.
Larger EU newcomers _ Poland, Hungary, the Czech Republic, Romania and Bulgaria _ have yet to set a date for their entry into the euro zone.
Estonia had originally planned to join next year but is likely to delay that as its growing economy sees inflation surge, a problem that has also slowed Latvian and Lithuanian plans. Slovakia is scheduled to join in 2009.