Cyprus plans to apply to join the EU's Economic and Monetary Union (EMU) next February or March, a key step to join the eurozone in 2008, Cyprus News Agency reported on Friday.
Cypriot Finance Minister Michalakis Sarris was quoted as saying that the country will state the reasons which show that it is ready to join the eurozone in its application for EMU.
The application will be assessed by competent organs in the European Commission by next June, and then submitted to the European Council for ratification.
Earlier this month, Sarris told the House of Representatives that Cyprus' budget deficit could fall to 1.5 percent of GDP this year, with growth rate estimated at around 3.7 percent.
Keeping inflation low and containing the fiscal deficit below the Maastricht criteria of 3 percent are key to the government's economic strategy to ensure Cyprus adopts the euro on time.
Cyprus has been pursuing an austerity program to keep its deficit below 3.0 percent of GDP and reel in its public debt, now exceeding 60 percent of GDP but on a declining trend.
EU Commissioner for Economic and Monetary Affairs Joaquin Almunia visit the island last month and viewed Cyprus' economic situation for entering the eurozone as a positive one.
The Republic of Cyprus joined the EU in May 2004 and has set as a strategic goal to enter the eurozone in January 2008.