IMF urges fast adoption of euro for CEE 's FT

The IMF has urged the European Union to allow CEE countries to quickly adopt the euro without enjoying full membership in the eurozone, the Financial Times found on April 6.

The Financial Times cited a confidential report from the International Monetary fund that argued CEE countries should be given a kind of quasi-membership by being allowed to use the euro without meeting the Maastricht criteria but being unable to hold a seat in the European Central Bank.

The currencies of the three Baltic states, along with that of Bulgaria, are pegged to the euro. There has recently been widespread speculation about the ability of the countries to maintain the peg as the economic situation worsens. The countries have all insisted that they will be able to maintain the pegs.

"For countries in the EU, 'euroisation' offers the largest benefitsin terms of resolving the foreign currency debt overhang (accumulation), removing uncertainty and restoring confidence," the IMF reportedly said.

The report cited by the Financial Times, however, is a month old and has been ill-received by authorities in the European Union.

Furthermore, many analysts say that the recommendation is not realistic and that it has likely been trumped by decisions made to support the countries at the recent G20 meeting.

"If it does exist, this could be a document that was used to provide an incentive to EU leaders to push them and help them realise how serious the situation is in central and Eastern Europe," Simon Quijano-Evans, CEE Economist at Cheuvreux, was reported as saying by Reuters news agency.