No easy escape from eurozone

TALLINN - The euro region should have a mechanism allowing member countries to exit the single currency, Estonian Finance Minister Jurgen Ligi said, reports Bloomberg. “This isn’t about throwing people out, this is about the criteria,” Ligi said in an interview in Krynica, Poland on Sept. 9.

“Where the initiative comes from isn’t really important, it just has to be based on strict rules and sanctions.”
Estonia was the first former Soviet republic to adopt the euro when it made the currency switch in January. Its 13.8 billion euro economy benefited from the move even with the sovereign-debt crisis, through increased economic confidence, Ligi said.
Ligi, named Europe’s Finance Minister of the Year in January by The Banker magazine, said he was confident the euro won’t collapse, as there is strong political commitment. Leaving the currency union wouldn’t necessarily help countries with their difficulties, he added.

“I don’t see any advantages for countries if they left: they would still have to pay their debts, cut expenditure and increase income,” he said. “They would still have to make structural reforms and change their mindsets.”
Estonia’s economy has grown at the fastest pace in the European Union this year, helped by a low comparison base after the second-worst recession in the 27-member bloc in 2008-2009, behind Latvia. It is the least-indebted euro-region member, at 6.6 percent of gross domestic product, and the sole nation in the currency area to have had a budget surplus last year.

There are no talks on Greece, which received bailout loans last year of 110 billion euros and is currently seeking further help, potentially leaving the euro, European Commission economics spokesman Amadeu Altafaj said in Brussels last week. Neither exit nor expulsion is possible and euro-area membership is irrevocable, he said.