2 countries adopt euro
NICOSIA, Cyprus — EU newcomers Cyprus and Malta adopted the euro today, bringing to 15 the number of countries using the currency with increasing clout over the slumping U.S. dollar.
The Mediterranean islands, both former British colonies, scrapped the Cyprus pound and Maltese lira at midnight.
Maltese Prime Minister Lawrence Gonzi had to wait a little before getting his hands on the new currency. An automated teller machine did not work when Gonzi tried to withdraw euros, and he was obliged to use a different ATM.
Both countries welcomed the euro with outdoor celebrations, including a fireworks display in Malta's rainy capital Valletta.
The euro has risen more than 11 percent against the dollar during the year and nine East European countries are waiting to convert.
The euro's strong exchange rate of $1.4599 on Monday — up 79 percent from its lowest point of 82 cents in 2000 — has given more pocket power to European tourists in the U.S., while curtailing the movements and spending of many American tourists and workers abroad. U.S. budget and trade deficits, along with recent interest rate cuts by the Federal Reserve, have undermined the dollar's value.
"We are in a region that could have some geopolitical surprises," Cyprus Finance Minister Michalis Sarris told The Associated Press.
"Although the pound has been a loyal and faithful servant of the Cyprus economy, we felt that things could happen that could destabilize a small open economy, so it was to your benefit to join the euro zone as soon as possible."
Only the southern, Greek-speaking part of Cyprus will use the euro. The government in the north is recognized only by Turkey, but many Turkish Cypriot merchants will also accept euros along with Turkish lira.
Cyprus' euro coins will be inscribed in both Greek and Turkish, with designs that include the mouflon, or wild sheep, a national symbol. Malta's 1 euro and 2 euros coins will bear the Maltese cross.
"We're sorry to say goodbye to our pound but happy to welcome the euro," Cyprus President Tassos Papadopoulos said moments after midnight.
