Economic warning to EU candidates

MALMO, Sweden -- European Union finance ministers have expressed concern at the economic impact which could arise from the bloc's enlargement.

The ministers meeting in the Swedish city of Malmo on Sunday said they remain committed to expansion but warned central and eastern European counterparts to get their economies in order.

Italian Treasury Minister Vincenzo Visco said, in the short term, enlargement required existing EU members to take a hard look at what they have achieved in the sensitive area of tax harmonisation.

"The economic problems linked to enlargement are very relevant," Visco said, adding that Estonia did not currently impose any corporate tax.

The front-runners among the candidates are the Czech Republic, Estonia, Hungary, Poland, Cyprus, Slovenia and Malta, who may join as early as 2004. Bulgaria, Latvia, Lithuania, Romania, and Slovakia would join later.

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The ministers also said the newcomers into the Union may have to wait longer before they can adopt the euro currency due to come into common circulation in 12 EU nations next year.

"Many candidate countries are under the impression they can join the euro within two years after joining the union," Dutch Finance Minister Gerrit Zalm said, "It is better to join a few years later than under the wrong conditions."

EU enlargement chief Guenter Verheugen said the 2004 entry date was "very, very realistic" but was conditional on the performance of the candidates.

German Finance Minister Hans Eichel said: "We want enlargement and don't want to impose additional criteria but the existing criteria have to be fulfilled. That could have possible consequences for the timetable."

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Treaty of Nice

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