No Change To Euro Entry Rules Now, Maybe Later-EU

`There are some (countries) that want to get into the ERM2 (quicker). That we can think about,` Merkel said.

Changing euro zone entry rules now would be a mistake, European Union leaders agreed on Sunday, but they left the door ajar for a possible shortening of the currency stability test in the future.

Euro hopefuls must have low inflation and interest rates, a budget deficit no higher than 3 percent of GDP, debt no higher than 60 percent of GDP, and a currency that is stable in a +/-15 percent band around a central parity rate for two years.

Hungary last week called for shortening the two-year rule in the Exchange Rate Mechanism 2 to bring the EU's eastern members under the euro currency shield more quickly to protect them from the global financial crisis.

"There was broad agreement it would be an error to change the rules of the game at the moment," Czech Prime Minister Mirek Topolanek, whose country holds the rotating EU presidency, told a news conference after an EU summit.

But Jean-Claude Juncker, Luxembourg's prime Minister and the chairman of euro zone finance ministers, said the two-year stability test should be discussed.

"I can understand that there may be a slight question mark over the condition that one needs to be member of the monetary system (ERM2) for two years, we will discuss this calmly," Juncker told a news conference.

"This specific problem ... needs particular consideration," he said, although he made it clear earlier that changing entry rules, which are part of EU law, could not be done quickly.

French President Nicolas Sarkozy also signalled he was open to discussions on euro zone entry criteria in the future.

"Yes, we need convergence criteria. There's no question of that. The Treaty exists, so there's no question of starting a discussion of it now," he told a news conference.

"But in the future, when the crisis is over, should we look and see what we have learnt from the crisis ... to see whether we should integrate new criteria," he said.

EAGER TO JOIN

Hungarian Prime Minister Ferenc Gyurcsany said Sarkozy's views on accelerated euro zone entry procedures were close to his own.

"It is in Europe's interest to bring everyone into the euro zone. We consider his (Sarkozy) remarks as support of our common interest to enlarge the euro zone as fast as possible," he said.

German Chancellor Angela Merkel said that while the current criteria for joining the euro should be observed, there could be a faster way of bringing candidates into ERM2 itself.

"There are some (countries) that want to get into the ERM2 (quicker). That we can think about," Merkel said.

"But the treaties cannot simply be changed, so let's stick with what we have got," she said.

"I didn't speak about shortening the period (in ERM2). But we should look at countries that want to join the ERM2 quickly to see if they meet the criteria," she added.

The global financial and economic crisis has made many EU countries more eager to join the single currency, now shared by 16 nations, because of the exchange rate stability it offers.

Poland, whose zloty has fallen by as much as a third against the euro since peaking in July 2008, started ERM2 entry talks in February with a view to adopting the euro in 2012.

On Sunday, Polish officials did not support Hungary's call for a shorter ERM2 period, saying the Polish economy was strong enough for the country to join in line with current rules.

"But if it (such a relaxation) were to take place...we would be happy," Finance Minister Jacek Rostowski said.

Poland also said the large volatility of the zloty should be a matter of concern for the euro zone as well.