I am currently living in Estonia and I'm gonna have to disagree with you on this one.
Sure... Estonia will have to pay its share in all those bailouts, but you can't forget the positive side of adapting the euro. Estonian Kroon was tied to euro anyway, so either way this country was strongly tied to whatever good/bad policies were taken by EU and ECB. However, now this country has a great chance of getting new investments, as well as greater chance of selling their products to other euro-countries.
It is also very important to bear in mind that Estonia is THE strongest country among the euro-users in terms of budget deficit and debt!!! Government debt was just 7.8% and budget deficit just -3% in 2010 (compared to; for example, Germany's 78.7% and -5.9%).
Sure... I'm not saying it's a perfect move by Estonia. Adopting Swiss Franc would have been way better, but it wasn't really a choice. It was hard job enough to sell the ''euro idea'' to Estonian people. As you may know, must folks out there aren't really educated in terms of Monetary policy or anything remotely related to $$$.
As I said, Estonian Kroon already was pretty much euro. So if euro would to crash, so would have Estonian Kroon in that matter. Lose-Lose situation you see. At least now Estonia is seen as a more stable country (first out of the Baltic region to switch to euro). It sure gives this country an serious advantage.
But to answer your question: Estonia was in such a hurry to adopt the euro because of Russia. That's the reason why Estonia joined all those stupid places... EU, NATO, etc. This country and its people want to get as far as possible from this eastern Bear (Russia). Being a part of this ''euro-club'' seemed another great step forward.
Hey Robert,
ReplyDeleteI am currently living in Estonia and I'm gonna have to disagree with you on this one.
Sure... Estonia will have to pay its share in all those bailouts, but you can't forget the positive side of adapting the euro. Estonian Kroon was tied to euro anyway, so either way this country was strongly tied to whatever good/bad policies were taken by EU and ECB. However, now this country has a great chance of getting new investments, as well as greater chance of selling their products to other euro-countries.
It is also very important to bear in mind that Estonia is THE strongest country among the euro-users in terms of budget deficit and debt!!! Government debt was just 7.8% and budget deficit just -3% in 2010 (compared to; for example, Germany's 78.7% and -5.9%).
@ Anonymous 1-2 6:51 am
ReplyDeleteCan you then explain why the European country with the greatest inflow of funds and strongest currency is Switzerland, which does not use the Euro.
A move by Estonia to link to gold instead of European politicians would have been a much wiser move.
Hey again Robert,
ReplyDeleteSure... I'm not saying it's a perfect move by Estonia. Adopting Swiss Franc would have been way better, but it wasn't really a choice. It was hard job enough to sell the ''euro idea'' to Estonian people. As you may know, must folks out there aren't really educated in terms of Monetary policy or anything remotely related to $$$.
As I said, Estonian Kroon already was pretty much euro. So if euro would to crash, so would have Estonian Kroon in that matter. Lose-Lose situation you see. At least now Estonia is seen as a more stable country (first out of the Baltic region to switch to euro). It sure gives this country an serious advantage.
But to answer your question: Estonia was in such a hurry to adopt the euro because of Russia. That's the reason why Estonia joined all those stupid places... EU, NATO, etc. This country and its people want to get as far as possible from this eastern Bear (Russia). Being a part of this ''euro-club'' seemed another great step forward.
http://english.peopledaily.com.cn/90001/90778/90858/90865/7248755.html
ReplyDelete''Pros outweigh cons for Estonia in euro zone: Danish experts''