12 May 2010, 22:01

Estonia next euro country?

Estonia next euro country?

After creating a euro stabilization fund, the European Union is going to its Euro-Parliament with a package of measures to tighten financial control around the EU   and avert meltdowns of the kind that threatened Greece. Indeed, although the euro is not a dead project, it is a seriously wounded one.

After creating a euro stabilization fund, the European Union is going to its Euro-Parliament with a package of measures to tighten financial control around the EU  and avert meltdowns of the kind that threatened Greece. Indeed, although the euro is not a dead project, it is a seriously wounded one. 

The single European currency is a powerful economic and political integrator of European countries. The problems with it arise from a rapid Eurozone expansion, which has created an economic patchwork. Unfortunately, this patchwork includes East and Southeast European nations which are not up to the mark in economic terms  and often fail to comply with the national deficit criteria under the agreements in Maastricht that created the euro, said Russian financial analyst Dr. Alexander Yakovlev.

The expansion, however, is still on, and the 17th Eurozone member will be the former Soviet republic of Estonia. It will be in from the coming January. There have been announcements about this from Estonian members of the European Parliament and from Euro-Commission President Jose Manuel Barroso. 

Is Estonia up to the mark? We put this question to the Russian stock market watcher Dr. Igor Kostikov. 

Yes, it is. Its public deficit is well within the 3-percent of the GDP, as required by the Maastricht agreement. This makes Estonia an even better budgetary performer than Belgium and France, let alone Greece and other countries in Southern Europe. Estonia’s entry would be a signal of Eurozone readiness to encourage frugal economies, said  Kostikov. In Estonia meanwhile, the opinion is mixed but weighted on the ‘yes’ side. The lure of the euro remains irresistible.

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