Accelerated euro entry "not an option" -Almunia

VIENNA, Nov 16 (Reuters) - Accelerated adoption of the euro by waiving or loosening entry criteria is not an option for the European Union's central and eastern European member states, the EU's economic and monetary affairs Commissioner said on Monday. While euro adoption remains a key policy anchor for the new member states in the former Communist bloc, hit particularly hard by the global financial crisis, compliance with convergence criteria remains key for keeping the euro currency in shape. "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," Economic and Monetary Affairs Commissioner Joaquin Almunia told a conference in Vienna. It is the European Commission, the EU's executive arm, that has the power to recommend that a country is ready to join the euro zone, which now has 16 members. "Euro adoption should not be seen as a quick fix to economic vulnerabilities," Almunia said in the text of a speech to be delivered in Vienna. "(Euro membership) does not eliminate the need to work out underlying imbalances." Almunia said that it was unlikely the region would return to pre-crisis potential growth and needed to address fiscal and structural problems. "The scope for CEE countries to benefit from an export-led recovery is limited. Potential growth in the region is also unlikely to return to pre-crisis trends in the short term," he said. "It is important to address further accumulated imbalances and re-establish a robust and sustainable growth and convergence path. This will require continued efforts particularly in the fiscal and structural fields." Almunia said that the economic contraction in the European Union and the euro zone appeared to have bottomed out and that there were reasons to be optimistic about the near-term outlook. "However I should stress that uncertainty about the strength and sustainability of the recovery remains," he said. (Reporting by Boris Groendahl) Keywords: EU/ALMUNIA ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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