Cyprus and Malta will adopt the euro on 1 January 2008 after EU finance ministers gave them the final go-ahead.

The 27 ministers decided that one euro would replace 0.585274 Cyprus pounds and 0.4293 Maltese lira.

They will be the second and third of the countries that joined the EU in 2004 to enter the eurozone. Slovenia started using euros on 1 January 2007.

New members have to meet strict criteria on inflation, interest rates, debt, deficits and currency stability.

Lithuania, which had also wanted to adopt the euro in 2008, failed because of its high inflation rate.

Slovakia is next in line, hoping to switch to the single currency in 2009.