New Euro Player – Estonia

• December 31st, 2010
• Posted by EUEditor

The government of Estonia has declared it has done the right thing, taking up the Euro currency from the first day of 2011.
PASSING THE TESTS

The last year has seen the currency tested, under pressure from the sovereign debt crisis affecting four of the “Eurozone” states – Greece, Ireland, Portugal and Spain.

This month the German Chancellor, Angela Merkel, declared the Euro system had shown itself “crisis proof”, successfully defended through the establishment of back-up funds as a Stabilisation Mechanism – with Germany a major contributor.

See EUAustralia Online: “Counting up money”, 16.12.10.

Scepticism continues about that, in different quarters, but in Estonia accession to the Euro is being hailed as a huge opportunity.

HARD WORK ON THE EURO

The small Baltic country, with 1.5-million inhabitants, has worked to meet the necessary qualifying standards of economic management and performance, receiving final approval from the European Union last July, to become the 17th member state to take up the shared currency.

Government leaders there point out that Estonia’s economy is trade orientated, with at least 70% of business being done with Eurozone countries – making for automatic economies.

The state was managed out of the inflation crisis that affected it as a former part of the Soviet Union, in  the early 1990s; its Crown – or Kroon- was pegged against the Deutschmark and later the Euro, delivering stability and, until the global financial crisis, generally prosperous times.

As of 1.1.11 the Euro will be in use in 17 of the 27 EU countries; the other twelve have contracted by Treaty to join it in the end, some waiting to achieve the criteria, others putting off the day, inhibited by political and nationalist considerations, principally.

The European Commission announced Estonia’s accession:

“Estonia joined the EU in 2004 and has fervently pursued economic reform, earning itself the nickname ‘Baltic Tiger’. The economy is highly flexible and, while not immune to the crisis, has shown its ability to operate and adjust under a fixed exchange rate for close to two decades.

“But euro adoption is not the end of the road. As the 17th Eurozone member, Estonia will be required to pursue policies on debt and budget deficits that support economic growth, job creation and a stable inflation rate.

“Other recent additions to the euro area include Slovenia, which joined in 2007, Cyprus and Malta in 2008 and Slovakia in 2009.”

Reference

Euractiv, Brussels, “Estonia gets final OK to join euro in 2011”, 16.7.10. http://www.euractiv.com/en/euro/estonia-gets-final-ok-join-euro-2011-news-496398, (30.12.10).

Stephen Fidler, “So Long, Estonian Kroon”, Wall Street Journal – Blogs, NY, 30.12.10. http://blogs.wsj.com/brussels/2010/12/30/so-long-estonian-kroon/, (30.12.10).

EC, Brussels,”Estonia adopts the euro”, 28.12.10.
http://ec.europa.eu/news/economy/101228_en.htm, (30.12.10).

Pictures

New EU notes and coins, Estonian designs; capital city Tallinn. Travelblog.org

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