Fitch expects to upgrade Malta

Fitch ratings agency said yesterday it expects to upgrade the ratings of Cyprus and Malta once they get the final go-ahead to join the euro zone.

Its statement came just five days after the European Commission and European Central Bank said the two Mediterranean islands were ready to adopt the European single currency next January.

EU finance ministers and the European Parliament are due to discuss their ecommendations next month before an EU summit gives the final green light on June 22.

Fitch said, in a statement, it would expect to upgrade Cyprus's credit ratings to AA- from A+ and those of Malta to A+ from A when the final decision is taken.

In both cases, it would expect to change its outlook to stable from positive.

"We believe that the EU Council will accept the EC's view that Cyprus and Malta have achieved a high and sufficient degree of sustainable economic convergence and that these countries will adopt the euro on January 1, 2008," said Chris Pryce, director in Fitch's European Sovereign Group in London.