* Timetables must be credible, or they will feed bubbles
* Skipping, loosening euro adoption criteria "not an option"
* CEE countries still need to address budgets, imbalances
(Recasts with more quotes)
By Boris Groendahl and Krisztina Than
VIENNA, Nov 16 (Reuters) - The European Union's eastern
members need to adjust their timetables for joining the euro
currency to avoid the risk of creating new bubbles again with
overly ambitious plans, policymakers warned on Monday.
European Central Bank Executive Board member Gertrude
Tumpel-Gugerell told a conference in Vienna that credible
strategies for adopting the euro were essential and that some
countries may need a correction due the financial crisis.
"The recent financial crisis ... has moved euro adoption
further into the future," Tumpel-Gugerell said.
"Overly ambitious timetables for adopting the euro can be
rather costly for the country concerned," she said. "This may
encourage market participants to pursue strategies which may
prove risky if the timetable turns out not to be achievable."
In the past, too ambitious timetables have led to credit
bubbles in central and eastern Europe, Tumpel-Gugerell said.
"Therefore, individual countries' timetables have to be
carefully looked at and adjustments may be necessary."
A Reuters poll last week showed analysts expect Estonia to
be the next country from Central Europe to join the euro zone in
2012, a year sooner than predicted in August. Further entrants
would not come before 2014, the poll showed. []
Tumpel-Gugerell and other policymakers speaking at a
conference hosted by the Austrian central bank reiterated the
euro had provided stability to the countries that have adopted
it already during the current financial crisis.
They also repeated the mantra that rushing into the common
currency would not help the central and eastern European
countries -- which were hit hard by the crisis partly because
most of their currencies float.
European Union Economic and Monetary Affairs Commissioner
Joaquin Almunia told the conference accelerated adoption of the
euro by waiving or loosening entry criteria is not an option for
those countries.
"An accelerated euro area enlargement that would require a
waiver or a loosening of the entry criteria specified by the
treaty is not an option," Almunia said.
"Euro adoption should not be seen as a quick fix to economic
vulnerabilities," Almunia said a speech delivered to the
conference. "(Euro membership) does not eliminate the need to
work out underlying imbalances."
It is the European Commission, the EU's executive arm, that
has the power to recommend a country is ready to join the euro
zone, which now has 16 members.
E.EUROPE GOVERNORS AGREE
Tumpel-Gugerell's and Almunia's points were not lost on
central bank governors from some of the countries concerned
speaking in Vienna.
Hungary's governor Andras Simor, one of the first in the
region who had to fight attacks on his currency shortly after
Lehman Bros collapsed, said he learnt to keep as short as
possible the transition period in which rates are already fixed.
"We have ... learned that we should enter the EMU as soon as
possible because the country is more vulnerable outside but only
once convergence is right on track," he said.
"And we should still spend as little time in ERM-2 as
possible and legally necessary because it makes the currency
more vulnerable to attacks."
Simor also said it was unrealistic to give a target date
before the Hungarian elections due next year: "There will be
elections next April or May so at this point it would be
inappropriate to announce a target date."
Conference host Ewald Nowotny, head of the Austrian central
bank, said the main challenge was currently the budget deficit
target as many emerging European countries have loosened fiscal
policy to fight the financial crisis.
"Against the backdrop of the current crisis, the discussion
is revolving around the fiscal stance of countries," he said.
"It is ... a challenge to manage the trade-off between
providing support to those hit hardest by the crisis and
correcting fiscal imbalances to ensure sustainability and to
qualify for (euro entry)," he said.
However, Nowotny noted that differences were stark between
different countries in the European Union and euro adoption
should be decided case-by-case.
Estonia's deputy central bank governor Marten Ross said on
the sidelines of the conference that his country could meet the
conditions for adopting the euro by the spring of next year.
(Additional reporting by Sylvia Westall, Eva Komarek and Balazs
Koranyi; editing by Patrick Graham)
