Banks swamped as Malta and Cyprus become latest members of euro zone

Banks were swamped yesterday with Cypriots seeking euros on the first full day of trading in the currency. On New Year's Day, Cyprus and Malta, two of the 10 countries that joined the EU in 2004, entered the euro zone, boosting the number adopting the currency to 15.

Maltese celebrated with fireworks while Cypriots received their first look at the silvery national €1 coin, bearing the cruciform image of an ancient female idol, when they cut into the traditional vasilopita, a new year's bread or cake, shortly after the televised countdown to 2008.

Slices of the cake are designated for Christ, the house and family members, from oldest to youngest. The person who finds the coin is meant to have good luck in the new year.

Although sorry to bid goodbye to the strong pound issued at independence in 1960, Cypriots generally support the shift to the euro because it binds the island republic more closely to Europe and because the currency's value has risen by more than 11 per cent against the dollar over the past year. The transition from pound to euro has been managed with the help of advisers from Ireland.

Cyprus president Tassos Papadopoulos expressed optimism that the adoption of the euro could "create favourable conditions" leading to the reunification of the island, divided since Turkey occupied the north in 1976.

However, analysts fear that Ankara will tighten its grip on the north to counter the gradual integration into the EU of the inter- nationally recognised republic.