Estonia was invited to join euro zone

The finance ministers of the euro zone decided to invite Estonia to the euro zone from 1 January 2011, chairman of the euro zone countries Jean-Claude Juncker said late on Monday. In the ministers’ opinion, Estonia has met all the criteria for accession to the euro and has conducted a strict and sensible budget policy.
“Estonia will become the 17th member of the euro zone on 1 January 2010,” Juncker said after the meeting. He said the problems of the euro zone could not serve as a pretext to prevent a country that has met the criteria from acceding to it. Finnish Finance Minister Jyrki Katainen added, “We must give equal treatment to everyone. If there is a country that meets all the criteria it must have all the rights that the others had.”
The EU finance ministers’ meeting (Ecofin) took place on 8 June to discuss enlargement of the euro zone at the proposals of the European Commission, the European Central Bank and the European Commission. On 17 June the heads of government of the euro zone will discuss Estonia’s accession to the zone and on 13 July the finance ministers will presumably endorse the decision concerning accession to the euro. A meeting of the European Council planned for 17-18 June will give an assessment to the convergence reports of the European Commission and the European Central Bank and the to the proposal of enlargement of the euro zone.

Source: Estonian Review

EU accepts Estonia into eurozone

European finance ministers backed Estonia’s bid to adopt the euro, overriding the European Central Bank’s warning that the Baltic state may struggle to keep inflation under control. “Estonia will become the 17th member of the euro area on Jan. 1, 2011,” Luxembourg Prime Minister Jean-Claude Juncker told reporters late yesterday after chairing the monthly meeting of euro-region finance ministers in Luxembourg, reports Bloomberg.

The admission of Estonia, a former Soviet republic that entered the European Union in 2004, shows that the EU won’t let the Greece-fueled debt crisis in western Europe prevent it from widening the currency bloc to the east.

Political backing for Estonia to switch to the euro comes in the face of the ECB’s concerns that Estonia’s inflation rate, at 2.5 percent in April, may jump in years ahead as economic growth outstrips the euro-area average.

The euro region’s 16 governments have the formal power over euro entry, with the ECB relegated to an advisory role. Yesterday’s endorsement will be reviewed by government leaders at a June 17 summit, with a formal decision by finance ministers on July 13.

With economic output of 14 billion euros ($17 billion), Estonia would rank as the euro’s second-smallest economy, ahead of Malta.

Read more from BBN