Malta and Cyprus won approval from the European Commission on Wednesday to adopt the euro next year.

The two Mediterranean countries have achieved a high degree of sustainable economic convergence with the euro zone member states and met the necessary conditions to adopt the euro, the European Union's executive arm said in its convergence reports.

Both Malta and Cyprus, which joined the EU in May 2004, asked the commission in February to assess whether they were qualified to be admitted into the present 13-nation bloc sharing the same currency.

The commission's approval lifted the biggest hurdle on their path to the euro zone, but they still have to await formal endorsement of EU leaders in June and EU financial ministers in July, which will also fix the conversion rates for their respective currencies.

If approved, Malta and Cyprus will become the 14th and 15th member of the euro zone as from January 2008, following Slovenia, which adopted euro at the beginning of this year.

Before eligible to join the euro zone, any candidate country should meet five different criteria, namely price stability, sound public finances, exchange rate stability and convergence in long-term interest rates as well as compatibility of national legislation with EU rules. It is up to the European Commission to make an assessment.