Commission recommends 11 Member States for single European currency
The European Commission has published, on 25 March 1998, its report on economic convergence in Europe which recommends that 11 Member States meet the necessary conditions to join the single currency, the euro, from 1 January 1999. According to the Commission's report, Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, The Netherlands, Austria, Portugal and Finland have attained a sufficient level of economic convergence, as set out in the Maastricht Treaty. The final list of countries to participate in the single currency will be confirmed on 2 May 1998 following special meetings of the European Council (heads of state and government), the European Parliament, and the Council of Economic and Finance Ministers (ECOFIN). Of the remaining Member States, Denmark and the United Kingdom have exercised their opt-outs and will not participate in Economic and Monetary Union, at least from the start. The Commission finds that Greece and Sweden have not yet attained the conditions necessary to participate, and these two will not therefore be able to participate from January 1999. If all 11 countries identified by the Commission participate from the start, the euro zone would encompass almost 300 million inhabitants, and represent 19.4% of world GDP and 18.6% of world trade. It may be recalled that banking and accounting in the euro will be possible from 1 January 1999, but notes and coins in the new denomination will only start circulating from 1 January 2002. The Commission believes that the report demonstrates a background of sound economic recovery in Europe, and that the efforts made by Member States to prepare their economies for the euro have contributed to the positive economic fundamentals in Europe at the moment. In its accompanying economic forecast, the Commission states that the present recovery should continue to strengthen due to low inflation, favourable monetary conditions, high profitability and sustained external demand. Forecasting 2.8% growth in 1998 and 3.0% growth in 1999, the Commission believes that this will lead to the creation of over 3.4 million jobs. This positive result illustrates the benefits of low inflation and improved public finances in terms of both investment and growth.