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EMU : CYPRIOT PARLIAMENT VOTES TO JOIN THE EUROZONE.

At the end of a cliffhanger prior to the pre-presidential campaign, the Cypriot parliament finally adopted on 15 March the law ratifying the withdrawal of the Cypriot pound in favour of the euro on 1 January 2008 despite the opposition of the main party in the coalition government. The Communist AKEL party in fact voted against this law, fearing that the switch to the euro may cut into the incomes of the most vulnerable. But it is above all thanks to the reversal of the pro-European right-wing DISY party that the law could finally be adopted. This reversal was welcomed by all sides. Less than a week ago DISY had threatened to oppose this decisive vote.a"It was a political game," summarised afterwards a confidant to MEP Iannis Kassoulides (EPP-ED, Cyprus). "It was a question of showing that the ruling coalition was deeply divided on a particularly important subject." At the end of a series of meetings with the finance minister, DISY thus finally gave up trying to overturn this law and the eighteen members of the Cypriot parliament voted as one. The final result: by 36 votes to 15 and five abstentions, the euro is now underway. The European Commission and the European Central Bank are expected to give the green light to the Council during the month of May. But, bearing in mind the case of Lithuania (in 2006, Lithuania had maintained its application to join the euro despite objections expressed by the Commission), it appears likely that Nicosia has already received the support of Monetary Affairs Commissioner Joaquin Almunia. At the end of this process, the EcoFin Council will then need to fix (at the beginning of July) the definitive conversion rate between the euro and the Cypriot pound (which is currently 1.73 against the pound).

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Publication:European Report
Article Type:Brief article
Geographic Code:4EXCY
Date:Mar 20, 2007
Words:301
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