The European Commission gave Slovenia a green light today to join the euro zone sharing Europe's single currency next year, but held off on offering approval to Lithuania.
The EU executive's recommendation opens the way for Slovenia to become the first former communist country to join the currently 12-nation currency club on January 1, 2007.
EU member states and the European Parliament also have to approve of Slovenia joining the euro zone next year for the ex-Yugoslav republic's euro debut to go ahead next year.
Economic and Monetary Affairs Commissioner Joaquin Almunia praised Slovenia after assessing whether it and Lithuania were ready to join the euro zone next year.
'Slovenia meets all the convergence criteria, an achievement which results from a track record of stability-oriented policies and reforms and leads the Commission to propose that it adopts the euro in January 2007,' he said.
But the commission told Lithuania, which also wanted to join the euro zone next year, that the Baltic country's inflation was not in line with a euro zone limit. Lithuania's inflation rate during the 12 months to March 2006 averaged 2.7%, just a whisker above 2.6% target required to join the EU.
Fellow Baltic state Estonia had also originally wanted to join the bloc next year but abandoned its euro zone ambitions last month until 2008 because its inflation is also too high.
