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05-28-2010, 07:39 AM
MEPs back Estonia's euro ambitions

Despite the current economic crisis and tensions in the euro, Estonia is set to adopt the single currency in January. A low budget deficit and low inflation have persuaded MEPs on the Economic and Monetary Affairs Committee. and the European Commission that the small Baltic State is ready for euro membership. However, there are still concerns over the jobless rate, which is approaching 20%.


During an economics committee hearing in Strasbourg on 20 May, Edward Scicluna, the Maltese Socialist Member who drafted the report on Tallinn's euro ambitions said, "it is very significant that such a small country knocks at the eurozone's door at the time of the worst financial, economic and social crisis". His report will be put to the vote by all MEPs in June.

Pre-requisite stable prices and low budget deficit

As well as low inflation Estonia's "Kroon" has been stable and the country is strongly integrated into the wider European economy with most of its trade being with fellow European Union countries.

Irish MEP Gay Mitchell of the centre right European People's Party welcomed the fact "that such a small country becomes part of the euro at such a time of wild speculation". Praising the country's "impressive performance", he said that Estonia could be a "flagship for the region", showing other Baltic countries that if "you do meet the criteria, you can join".

For some MEPs, the knock-on effect for Estonia's neighbours Latvia and Lithuania was the most striking aspect. Latvian MEP Artūrs Krišjānis Kariņš said, "Kudos to our Northern neighbour", adding this will be "an important signal for the region".

Swedish Liberal Olle Schmidt said "congratulations to Estonia - if it only could have been my own country".

"High unemployment, low wages"

However, some thought the price of euro membership was too high. Speaking to us after the hearing Greek MEP Nikolaos Chountis of the leftist (GUE/ NGL) bloc deplored "the economic policies implemented by the Estonian government, in order to meet these criteria (which) led to high unemployment, low wages and social inequality"

Estonia's former minister of finance, Socialist MEP Ivari Padar said Estonia had previously embraced measures which the European Union is now urging on others. "We took control over the budget to be able to join euro zone," he said.