After joining the European Union in 2004, Estonia is now about to join the euro area. But is the tiny Baltic State ready to abandon its national currency – the kroon, on the 1st of January 2011 ?
With only a few weeks to go before the official introduction of the euro in Estonia, practical preparations have now entered the final phase. In its October report on the enlargement of the euro area, the European Commission concluded that it felt confident about the changeover process.
On the 1st of January, Estonia will thus become the 17th Member State to adopt the single currency.
Like in most former euro candidate countries, Estonians wonder what impact the euro will really have on their daily lives, and on the economy.
However, euro supporters continue to outnumber opponents, according to a survey conducted in October for the Estonian Finance Ministry.
“The Estonian kroon is pegged to the euro anyway. If something happens with the euro, it will effect the kroon as well. I think that joining the eurozone is quite logical,” says teacher Robin Hazlehorst.
“I am a pensioner and of course, I am worried because of price increases,” says Russian-speaker Olga Ostavolevic.
In October, the euro-related general price increase was of concern for 68% of the respondents.
To help people to adjust to changeover all prices have been displayed both in Estonian kroon and euros since July. Since then, undercover consumer protection inspectors have been cracking down on questionable conversion rates.
“Everything is under control”, insists the Estonian government, which views euro area membership associated with a tight lid on inflation as the best way to steer the country out of the crisis.
Many in business agree, saying euro area membership should attract more foreign investments too. Already today, roughly two-thirds of Estonia’s exports are going to other EU countries.
Adopting the euro could also boost tourism, particularly with over two- thirds of Estonia’s tourists coming from eurozone countries.
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