January 4, 2011
Starting January 1st 2011, tiny Estonia has joined the Euro zone as its 17th member country. After Cyprus, Malta, Slovenia and Slovakia it is the fifth Euro country among the 14 countries that have joined the EU after 2003. By joining the Euro zone Estonia fulfils the commitments taken in 2004 to introduce the Euro as soon as its economic and financial situation would enable it to do so.
Considering its healthy budget situation, with a budget deficit of less than two percent of GDP and a very low level of public debt, Estonia is unlikely to cause any problems to the Euro zone.
It will rather constitute an asset for other disciplined Euro zone member countries.
The other newcomers having joined the EU in 2004 and 2007 are unfortunately far from fulfilling the basic conditions for Euro zone membership. Latvia and Lithuania envisage 2014 as a possible date for membership. Poland and the Czech Republic express no hurry; nor have the two late comers Bulgaria and Romania.
This is wise. The new member countries should be granted the necessary time for adapting their economic and social structures to the harsh competitive situation in a monetary union that no longer authorises exchange rate adjustments, even if that implies delaying the Euro introduction well beyond 2015.
Sweden and Denmark are more urgent candidates to press for Euro zone membership.
Brussels 03.01. 11 Eberhard RheinAuthor : Eberhard Rhein