EC officially recommends Estonia for eurozone entry

  • 2010-05-12
  • Oskars Magone

Estonia will become the first of the Baltic States given permission to adopt the euro as of January 2011.

TALLINN -- The European Commission has officially endorsed Estonia's bid to enter the eurozone as of January next year.

The Commission said that Estonia meets the Maastricht criteria -- the rules governing which countries are allowed to adopt the single currency -- and will be able to join the eurozone at the beginning of next year.

"Estonia has achieved a high degree of sustainable economic convergence and is ready to adopt the euro on January 1 2011," European Commissioner for Economic and Monetary Affairs, Olli Rehn said in a statement. The endorsment comes despite concerns over the stability of the inflation rate in the country. "In sum, there are concerns regarding the sustainability of inflation convergence in Estonia," the ECB said in a report. The Estonian government has warmly greeted the news, saying that adopting the euro will have numerous positive effects on the country's economy, which is the strongest of the three Baltic States. "Close integration with the EU economy as well as higher investment activity should, in the coming years, lead to stable growth in employment in both the industrial and the services sector. Economic growth and the increased corporate profitability, brought along by productivity growth, will contribute to a faster increase in wages," the foreign ministry said in a statement on its website.