Estonia Looking Good For Euro Adoption Next Year
News Posted On: 15 January 2010
The European Commission, the executive division of the European Union will meet in the coming months to decide whether or not Estonia has met the criteria (the convergence criteria) to adopt the European Union single currency (Euro).
The convergence criteria states as follows:
To be able to adopt the Euro a country's inflation rate must be less than 1.5% above the average rate of the three best performing (lowest inflation) member states. The government deficit must be no more than 3% of Gross Domestic Product, or very close. The government must be less than 60% of GDP in debt. The country must have joined the Exchange Rate Mechanism (ERM II) as part of the European monetary System (EMS) for at least 2 years. And the long-term interest rate must be no more than 2% higher than that of the three lowest inflation countries.
Analysts have been forecasting for some time that Estonia would be the next country in the EU to adopt the Euro. Estonia has faced one of the worst recessions in the world, but this is not least because the government took steps to meet the convergence criteria that left the economy in worse shape.
One can only suspect that increased stability is Estonia's goal from adopting the Euro, and that is why they have pursued the goal with what can only be described as single-mindedness at times. None the less, their efforts will pay off in the long run, because they have done enough -- experts predict -- to be successfully welcomed into the European single currency fold.
The latest: German Foreign Minister Guido Westerwelle, who told Estonian Prime Minister Andrus Ansip during a brief stopover in Tallinn that "Estonia is on a good way for euro introduction in 2011."
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