Author Topic: Euro Estonia  (Read 30907 times)

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Offline chrisild

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Re: Euro Estonia
« Reply #15 on: April 04, 2010, 07:19:08 PM »
Originally the currency union was not planned to have "choose your preferred entry date" plans; a member state is theoretically obliged to join when it meets the convergence criteria. But since attempting to force any country in would probably damage the euro even more, it makes sense to let all of them pick a "no sooner than" date ...

As for Estonia in particular, well, that is the only country* that may join the euro area in the foreseeable future. Currently things look good, and 1-Jan-2011 may well be the day. This article http://derstandard.at/1269448738707/Ostbeitritte-Euro-Zug-hat-Verspaetung (in German) says that the Greece crisis has slowed the enthusiasm down in both the euro countries (regarding the acceptance of new members) and in the member states that do not have the euro (as far as the plans to join are concerned). Let's wait and see what the Commission and the Council say.

* According to that article, no other countries will introduce the euro until 2015.

Christian
« Last Edit: April 04, 2010, 07:33:11 PM by chrisild »

Offline chrisild

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Re: Euro Estonia
« Reply #16 on: May 12, 2010, 02:34:53 PM »
Estonia has pretty much made it: The European Central Bank just published its latest convergence report, and the European Commission recommended today to let the country introduce the euro on 1 January 2011.  And even though the ECB sounds a bit more skeptical than the Commssion, a No from the Council (which makes the ultimate decision) is extremely unlikely ...

"ECB publishes its Convergence Report 2010"
http://www.ecb.europa.eu/press/pr/date/2010/html/pr100512.en.html

European Commission: "Estonia fit for euro"
http://ec.europa.eu/news/economy/100512_1_en.htm

Guess that, for the reasons mentioned in previous posts, Estonia will be the last country to join the currency union. Well, at least the people in Finland may find it interesting to have a neighboring euro country. :)

Christian
« Last Edit: May 12, 2010, 03:03:49 PM by chrisild »

Offline Rasmus

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Re: Euro Estonia
« Reply #17 on: May 12, 2010, 06:25:49 PM »
here is information what will happen next:

Decisions by several more bodies are needed for the plan to switch to the euro from the start of next year to become final.

On June 8 a meeting of EU finance ministers, Ecofin, will take place that will discuss enlargement of the eurozone on the basis of the assessments of the Commission and the European Central Bank (ECB) and the Commission's proposal.

The European Parliament is due to give its opinion on the enlargement decision at the session taking place from June 14-16.

A summit of EU leaders is scheduled for June 17-18 that will offer an assessment of the convergence report by the ECB and the proposal as regards eurozone enlargement.

The final decision about enlargement of the eurozone will be made at a meeting of Ecofin. According to the practice of so far it is the Ecofin meeting taking place immediately after the summit. That would be on July 13, but there is no obligation to make the decision at the meeting immediately after the summit.

The Ecofin decision has to be unanimous.

Before the Ecofin decision a positive recommendation has to come from the euro group, or the finance ministers of eurozone members. This is a step added by the Lisbon treaty that has never been used before. Therefore there is no procedural practice for that decision.

The euro group meets a day before Ecofin.

Offline Bimat

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Euro Estonia
« Reply #18 on: May 13, 2010, 07:22:46 PM »
Estonia 'ready' to adopt euro

May 13 2010

As the euro faces its greatest crisis since it was first circulated in 2002, the EU has announced that Estonia is now ready to join the single currency.

Six years after it joined the EU, Estonia has met the requirements for adopting the euro according to the European Commission. The commission announced on Wednesday that it would recommend that EU governments let the country switch to the currency in January next year.

Estonia, which currently uses the kroon, would become the 17th nation to adopt the euro.

The announcement was accompanied by a new report which says eight other EU countries do not yet satisfy the conditions for euro area membership - Bulgaria, the Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden.

The UK and Denmark have opted not to join.

To qualify, candidates must show that their public finances are in good shape  and the exchange rate and prices are stable. Their interest rates must also be low, and national legislation on monetary matters must be in line with EU law.

The euro was introduced to world financial markets in 1999. The coins and banknotes went into circulation three years later. The most recent country to adopt the euro was Slovakia - in 2009.

Some 329 million people now use the euro every day, nearly two-thirds of the EU population of about 500 million.

The single currency has taken a battering in the markets in recent weeks as concern of Greece's mammoth debt rises. Commentators have speculated over the future of the euro as eurozone countries struggle to cope with large budget deficits, public debt and low growth.

Source: Inside Ireland
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Offline chrisild

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Re: Euro Estonia
« Reply #19 on: July 11, 2010, 01:54:43 PM »
The Estonian government published a new version of the Euro Communication Schedule a few days ago. Here is the English version:
http://euro.eesti.ee/EU/Prod/Euroveeb/Main_Page/download/Eurokommi_kalenderplaan__ingl_k.pdf

Note that for some time this month (no date specified) a trip to the Mint of Finland for Estonian journalists is/was planned, as part of the euro changeover campaign. The coins will literally be shipped to Estonia by the way - the total weight of the pieces will be about six hundred tons (600,000 kg) which, from what I have read, translates to about 30 truckloads ...

Christian

Offline Figleaf

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Re: Euro Estonia
« Reply #20 on: July 11, 2010, 02:07:40 PM »
It makes sense to have the coins minted in Finland. Finland has quietly been a major benefactor of the Baltics since their independence. Of course, an important reason was that Finland feared an influx of migrant workers, but the fact remains that they performed very well. Countries afraid of migrant hordes (from North Africa, Turkey, Mexico, North Korea etc.) could do worse than study the Finnish example.

I searched the document for the word "inflation" and got no occurrences. Yet, this might be the biggest worry of the population and it's not being addressed.

Peter
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Offline chrisild

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Re: Euro Estonia
« Reply #21 on: July 11, 2010, 03:19:35 PM »
I searched the document for the word "inflation" and got no occurrences. Yet, this might be the biggest worry of the population and it's not being addressed.

Search for "prices" and "pricing" instead. Somewhere in the communication schedule you will find this "Arrival of euro does not bring about increase in prices; companies joining AHK, ensure transparent pricing." And more than one time you'll see: "Monitoring the prices and informing the public" ...

Also, prices have to be displayed in both krooni and euro between July 2010 and June 2011, see:
http://euro.eesti.ee/EU/Prod/Euroveeb/Main_Page/News/July_1.jsp and
The euro info site also has some information regarding consumer prices, here for example:
http://euro.eesti.ee/EU/Prod/Euroveeb/Main_Page/News/Consumer_Protection_Board.jsp

So sure, possible price increases (see here http://www.fin.ee/index.php?id=105776 too) are a concern, although the annual inflation rate is below zero now. That may change again (remember the boom years with high inflation rates), but I think that issues such as (un)employment play a bigger role these days.

Christian

Offline Rasmus

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Re: Euro Estonia
« Reply #22 on: July 12, 2010, 04:58:22 PM »
Well, actually inflation is already growing  :(

According to Statistics Estonia, the consumer price index increased 3.5% in June 2010 compared to June of the previous year and 0.4% compared to May this year.

Full story here : http://www.stat.ee/37784

Offline Ukrainii Pyat

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Re: Euro Estonia
« Reply #23 on: July 12, 2010, 08:06:04 PM »
No small feat for a country to make such a transformation from a command economy under the thumb of Moscow.

"Coin"cidentally I got a piece of mail from Estonia this morning with a commemorative banknote and coin for 90th Year of Independence.  Will post pictures later.
Донецк Украина Donets'k Ukraine

Offline Figleaf

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Re: Euro Estonia
« Reply #24 on: July 12, 2010, 08:40:39 PM »
According to Statistics Estonia, the consumer price index increased 3.5% in June 2010 compared to June of the previous year and 0.4% compared to May this year.

Sounds bad, but a quick glance at the underlying figures tell you that at least haf of the rise is due to energy and transportation and the latter is probably due to energy as well. The point is that energy prices are due to outside influences, so no amount of policy making can change it. It is likely that the only recipe is "just sit there, don't do something". At best, you could ape some Obama policies to save energy, if the money is there, but it won't make much difference in the short run. This is not a complicated analysis, so I am pretty sure the people in Brussels can make it also. However, my guess is that people will still blame the euro for it. This is normal. One of the functions of the Brussels institutions is taking the blame.

Peter
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Offline chrisild

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Re: Euro Estonia
« Reply #25 on: July 13, 2010, 01:36:34 PM »
It is now official: "The Council has today decided to allow Estonia to adopt the euro as its currency with effect from 1 January 2011. This decision will extend the euro area to a 17th Member State (...) conversion rate is set at 15,6466 Estonian kroonid to one euro, which corresponds to the current central rate of the kroon in the EU's exchange rate mechanism (ERM II)." http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/115791.pdf

Christian

Offline Figleaf

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Re: Euro Estonia
« Reply #26 on: July 13, 2010, 01:48:08 PM »
Congratulations to Estonia. If someone would have predicted this 25 years ago he'd have been taken for quite insane.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline Ukrainii Pyat

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Re: Euro Estonia
« Reply #27 on: July 13, 2010, 06:01:53 PM »
Somehow I don't think those Estonians will cook the books like some other countries in the southern part of Europe are alleged to have.
Донецк Украина Donets'k Ukraine

Offline chrisild

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Re: Euro Estonia
« Reply #28 on: July 13, 2010, 06:43:40 PM »
Probably not, but you may have noticed that the ECB's report was a little skeptical regarding the mid/long term development in Estonia. Also, Eurostat (the EU's statistical office) has so far not had the competence to check the data provided by member state governments; that will now change according to an agreement made earlier this year. Had they had that option before Greece joined in 2001, a few things might have been different. Ah well, Estonia will probably the last member state to "get in" for quite a while anyway.

Christian

Offline chrisild

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Re: Euro Estonia
« Reply #29 on: July 15, 2010, 12:33:46 PM »
On Tuesday (20 July) Rahapaja Moneta, the Finnish Mint, will start producing the Estonian euro coins. The first pieces will have to be in Estonia by September when the frontloading to financial institutions begins. Here are two articles about this; the first one is in Finnish, the second one in German. You may want to use a service such as http://translate.google.com/ to get them sort-of-translated. :)

http://www.hs.fi/talous/artikkeli/Kauppalehti+Viron+eurokolikoiden+tuotanto+alkaa+Suomessa+jo+pian/1135258575957
http://www.vol.at/news/tp:vol:special_wirtschaft_aktuell/artikel/muenze-finnland-beginnt-mit-praegung-der-estnischen-euros/cn/news-20100714-05103876

Here is a short video that shows the reception in Brussels two days ago. Well well well, those Estonian 1 coins are way too big. ;)
http://tvnewsroom.consilium.europa.eu/story/index/vocabulary_id/tags/term_id/247/story_id/15541/media_id/34011
Click the "Play" button or bar to see that "Euro festivities 2010" video, and have a look at the giant coins from roughly 1:30 to 2:00. The video has no comment, just the original sound (speeches and background noise). In case you want to know who is who, click the "Shotlist (PDF file)" link.

Christian