(Refiles to correct links listed at end of story)
By Jonathan Cable
LONDON, April 22 (Reuters) - Slovakia will become the newest
member of the euro club when it adopts the currency next year
but other Eastern European nations are several years away, a
Reuters poll showed.
A poll of 29 analysts and strategists, taken April 11-22,
found Estonia and Lithuania joining the euro zone in 2012, and
the Czech Republic, Latvia and Poland in 2013.
Bulgaria's entry was not expected until 2014, a year later
than forecast in a January poll, while Hungary was seen joining
in 2014 and Romania in 2015, the same as in January.
"Our outlook for euro adoption in Central Europe has overall
become somewhat less optimistic. The main drive for this is the
recent surge in inflation combined with the continued external
imbalances," said Dagmar Alpen at Oppenheim.
Spiralling inflation and controlling budget deficits are
seen as the biggest hurdles for all potential candidates before
they ditch local currencies.
The fiscal effect forced the Czech government to abandon
plans to adopt the euro in 2009-2010, while inflation -- and the
ability to maintain low price growth sustainably -- could
potentially scupper Slovakia's early entry.
A condition of entry to the euro zone is that government
deficits must not exceed 3 percent of gross domestic product and
inflation must be no more than 1.5 percentage points higher than
an average of the three lowest among EU states.
CURRENCY VALUATIONS
Slovakia was seen revaluing its currency within the next 12
months before adopting the euro in 2009, but 13 of 19 said it
would not be able to hold its inflation rate within the
Maastricht criteria for two years after ditching the crown.
"Ensuring that medium-term inflation will remain under
control could prove problematic and may be used as a
justification to delay accession," said Sharon Fisher at Global
Insight, who predicts Slovakia will sign up in 2009.
"Still, we see any delays as rather unlikely."
The Czech Republic may revalue its currency within the next
12 months, said seven of 14 analysts, while five of 13 and five
of 16 saw Romania and Hungary respectively devaluing their
currencies within the year.
Poland's new centre-right Civic Platform government is more
pro-euro than the previous conservatives but says euro zone
entry is unlikely before its term ends in 2011.
Estonian central bank Governor Marten Ross has also said it
was unrealistic for his country to adopt the euro before 2011
and Czech Prime Minister Mirek Topolanek said this month his
administration was in no hurry to enter the euro zone.
Malta and Cyprus took euro zone membership to 15 countries
earlier this year, but added only 0.2 percent to the region's
economy.
The euro <EUR=> hit a record high against the dollar last
week as high inflation data cemented views the European Central
Bank would hold interest rates steady as the U.S. Federal
Reserve continues to slash rates to fight off a recession.
EU ENTRY
Analysts see Croatia as the next entrant to the European
Union, following Romania and Bulgaria's entry last year, but not
until 2009 at the earliest, with a median forecast entry date of
2011.
Macedonia, Montenegro and Serbia are seen joining the
27-member bloc in 2015, Albania and Bosnia will sign up in 2016,
while Turkey will not join until 2020, according to the Reuters
poll.
Turkey began membership talks in 2005 but negotiations have
slowed sharply amid disputes over penal reforms, human rights
and the division of Cyprus into an internationally recognised
Greek Cypriot south -- an EU member -- and a breakaway Turkish
Cypriot state.
Analysts gave a median 30 percent probability that the EU
would suspend negotiations with Turkey and the same chance that
Turkey would pull out. This compares to 20 and 25 percent
respective forecasts in January's poll.
"While the Turkish government insists that it remains
committed to EU membership, the pace of reform has slowed down
considerably over the past couple of years," said James
Ker-Lindsay at Kingston University.
