Estonia to become 17th country in the Eurozone
July 14th, 2010 - 1:29 am ICT by BNO NewsBRUSSELS (BNO NEWS) — Estonia will become the 17th European Union (EU) country to share the Euro currency as of January 1st, the EU said on Tuesday.
During the approval process, which began on May 12, the Commission determined that Estonia fulfills all the necessary conditions to join the euro.
“Estonia has achieved a high degree of sustainable economic convergence and is ready to adopt the euro on 1 January 2011. We commend Estonia for its long-standing commitment to prudent policies,” Olli Rehn, EU Commissioner for Economic and Monetary Affairs said.
“To ensure that the adoption of the euro is a success, Estonia must pursue its efforts to maintain a prudent fiscal policy stance. Estonia needs also to remain vigilant and react early and decisively in case signs of build-up of macroeconomic imbalances and/or losses of competitiveness were to appear. Estonia must now continue with its practical preparations to ensure that the changeover takes place smoothly”, Rehn added.
Estonia will enter the eurozone in a strong position and good public finances. Estonia recorded a budget deficit of 1.7% of GDP last year, well under the EU’s 3% limit. Government debt was also low– just 7.2% of GDP. 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.
Estonia, Latvia and Lithuania had originally planned to join the Eurozone in 2009 but their entry was delayed by two years due to the financial crisis. Hungary, Poland, Romania, and Czech Republic are other European countries which are hoping but have yet joined the Eurozone.
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Tags: bno, budget deficit, changeover, competitiveness, czech republic, economic convergence, estonia latvia, european countries, eurozone, exchange rate, financial crisis, fiscal policy, gdp, government debt, january 1st, limit government, monetary affairs, necessary conditions, policy stance, public finances