Malta would be ready to adopt the euro by 2005, even though the currency was likely to be introduced sometime between 2006 and 2007, Finance Minister John Dalli said yesterday.

Speaking to the press after a meeting between the finance ministers of European Union and candidate countries, Mr Dalli said Malta was taking the necessary measures to be able to adopt the euro, including reducing the deficit and unemployment.

Mr Dalli attended two consecutive meetings while in Brussels yesterday. The first was an informal meeting between finance ministers of applicant countries, who get together every six months to share experiences and information about the negotiations.

The minister said one of the issues discussed at this meeting yesterday was the proposed budget for acceding countries.

"Emphasis was laid on the fact that each country has specific circumstances and the EU cannot place all the candidate countries in the same basket. Malta does not have Poland's problems in the agriculture sector, but has a problem with insularity," Mr Dalli said.

In the following meeting with the EU finance ministers, the proposed budget was again discussed.

"Stress was put on the importance of controlling the deficit and following policies and undertaking the necessary restructuring that would help achieve the deficit reduction goal. The EU insists that the deficit should be around three per cent of the GDP," Mr Dalli said.

He said the EU finance ministers acknowledged the steps being taken by the Maltese government to control the deficit.

The other important issue on the agenda was the introduction of the euro.

"Countries were urged to adopt the euro as soon as possible after accession. A two-year period has to elapse following membership before it can be introduced, and countries have to satisfy certain criteria. I am convinced that we would be meeting those criteria by 2005," Mr Dalli said.

He envisaged that Malta would not have any problems in adopting the common currency. Malta's imports and exports were mostly with countries in the Eurozone.

"The introduction of the euro would bring more stability to Malta as it would eliminate any instabilities that may be caused by the exchange rate. Seventy per cent of the Maltese lira is already pegged to the euro," he said.