Estonia introduces Euro as main currency 1/1/2011

Is Estonia embracing the new currency or are they having restraints? In this blog post you will learn about the advantages of the new replacement for the traditional Estonian Kroon, former national currency.

Has dismal financial past in Europe been overcome?

The EURO-zone had problems in 2010. Our blog took a look on the situation in Spain and how they failed to collect money. Another article in our blog even discusses pros and cons on making the Eurozone smaller. We concluded that new financial regulatory utilities are necessary in order to prevent future crisis of the scope we just experienced. Shortly after I wrote an article about plummeting bond prices in the EU region. Especially EU peripherals had problems selling their bonds due to bad economy as this bravenewfincance article outlines. After all, our blog more or less focussed on the very bad situation of EU economy, here and also here.

The EU commission just introduced three brand new organisations which are designed to tackle financial sources of fire. (FTD 1/6/11 p17 “Vertrauen ist gut…”) So that problem seems solved for now.

However, crisis was last year. New year – new chances. Is this Estonias motivational slogan for introducing the EU as primary currency?

Optimism

Me, being naturally optimistic, see it that way: Estonia is boarding a ship of longterm success. Strength in unity is one of nature’s basic rules and also applies for states. I am not talking about war here but about agreeing on lower fairs and taxes within the European Region. Paying as well as receiving money in Euro currency has many advantages such as no conversion, changing money when travelling, no hedging costs for instable currencies and so forth.

Tere Euro – Hello Euro

In Estonia, this is the parole of the hour. A baltic newspaper explains how Estonia struggled with inflation four years ago. This was a reason why they couldn’t introduce the Euro back then. Indicators are still no reason to jumping for joy but they are in line with most European countries if it comes to inflation or national debt. Unemployment rate is somewhere around 14% which seems high at first glance but Estonia just has 1.4m residents.

More than just escaping from Russian influence

15.65 Kroons will exchange for one Euro and this will please most of the Estonians. Some arguments claim this change in currency is an offense to Russia. I think this is just pathetic. Turning the argument for 180 degrees means that Estonia is escaping Russian influence by adopting to the Euro. Who except for Russians would consider this a disadvantage?

The blogosphere is filled with pros and cons on this topic. I hope to having made myself clear. I welcome it very much that I can now pay with Euro in Estonia.

Voices with different opinion, such as this much debated comment on a very dismal 2011 by Bruce Stokes, will be lined out by KizzelKay in his following blog post on this topic.

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Wishing all of you a successful 2011!

rudi2020

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7 Responses to Estonia introduces Euro as main currency 1/1/2011

  1. vivipre says:

    Thank you for this nice contribution and for keeping us up to date with the €-zone situation.

    With their adoption of the Euro Estonia not only tries to reduce influence of Russia but also hopes to lure investors by removing fear of devaluation of their currency and making borrowing more secure for its people as this new video shows.

    As Estonia will be among the poorest members of the Euro zone, let’s hope their economic development is steadily improving and it is not just another country that needs financial support.

    I’m looking forward to read about the criticism by Kizzel! 😉

  2. bravenewloock says:

    Thanks Rudi, I think its great to have a look at these countries as well when looking at the Euro as they are often overlooked. In fact, countries like Estonia might play a vital role for the €uro in 2011.

    Check out the preface of an IMF report on Eastern European countries in the EU: “In the past decade, however, growth in most of the CEECs has been clearly above the average of emerging market countries; in fact, the three Baltic countries (Estonia, Latvia, and Lithuania) have been in the top five emerging market performers.”

  3. Pingback: What’s up in 2011? | BraveNewFinance.

  4. rudi2020 says:

    With the 3 baltic states ranking top in growth of emerging European countries, I predict that it is just a matter of time when Latvia and Lithuania are joining the single European currency. Also looking forward to this moment. (I am just no big fan of exchanging money because it is a reason for banks to squeeze more money out of my already-very-thin wallet.)

  5. olexa5 says:

    Speaking of changing money (although I found it great when being abroad as a kid): I guess the way the banking business works, they probably found another way to squeeze your wallet at another step. I’m sorry rudi 😉

  6. Pingback: Estonia’s Euro – the dark side | BraveNewFinance.

  7. Pingback: Estonia’s Euro – the dark side | BraveNewFinance.

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