Meeting in Brussels, they decided to use the existing exchange rate of 15.6466 kroon to one euro as the final conversion rate.
The tiny Baltic state, with a population of 1.3 million, will become the 17th member of the single currency.
Estonia met entry requirements on inflation, debt and deficit levels, interest rates and currency stability, but one can’t help wondering if this is such a good idea and that perhaps Estonians should have second thoughts. When many eastern states joined the European Union a few years ago, adopting the euro currency was the main goal for all of them; the euro was seen as a guarantee of stability.
However, with the financial crisis that shocked the continent and the world, the euro showed that it is not invulnerable. The Greek collapse threatened the entire currency system and forced the EU to create new controls to avoid such crises in the future.
Of the EU’s 27 member states, 16 currently have the euro as their currency. Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Austria and Finland adopted the currency in 2002. Slovenia joined in 2007, followed by Cyprus and Malta in 2008, and Slovakia in 2009.
Although Lord Mandelson had claimed Britain should still join the euro despite the crisis, at present public opinion in the UK is against joining the euro.
Estonian authorities are campaigning strongly to gain the approval of the public, who expect the euro to be a key element in overcoming a crisis that has hit its economy. However, a new currency is anything but new to Estonians. The kroon succeeded the mark in 1928 and was in use until the Russian invasion in 1940, after which it was replaced by the Soviet ruble. Upon regaining independence, in 1992, the kroon was reintroduced. Now the kroon will dissappear again, and the euro will be the official currency when 2011 begins.
