Europe’s single currency will be extended to a 17th European Union country on 1 January when Estonia is admitted to the eurozone.
After what was a torrid 2010 for the eurozone – in which national governments were battling with a succession of sovereign debt crises – the admission of Estonia gives the eurozone a positive start to 2011, showing that membership of the single currency is still sought after. The Baltic state with a population of just 1.3 million has worked hard since the economic downturn of 2007-08 to comply with the EU’s rules on fiscal discipline.
Olli Rehn, the European commissioner for economic and monetary affairs, will be in Tallinn, the capital of Estonia, on 1 January to take part in the celebrations. “I am very happy to welcome Estonia into the euro area. This is a great achievement and a fair reward for a country that has been firmly committed to maintaining sound fiscal policies,” he said.
José Manuel Barroso, the president of the European Commission, said the admission of Estonia to the eurozone was “a strong signal of the attraction and stability that the euro brings to member states of the European Union”.
The value of the Estonian kroon has been fixed at a conversion rate of 15.6466 kroon to the euro. The switchover from the Estonian kroon to the euro is scheduled to take just two weeks – the kroon ceases to be legal tender on 15 January – but in practice will be accomplished even more quickly.The old currency can be exchanged for euro at many high street banks until the end of the year and at the national bank for an unlimited period.
The eurozone’s banknotes are standard regardless of where they are printed, but the coins carry a standard European design on one side and a national design on the other. So the admission of Estonia adds another national design to the coins that will circulate through the eurozone. The Estonian design, which is common to all the denominations of coins, shows a map of Estonia with the word “Eesti”.
The eurozone’s expansion
1 January 1999: irrevocable fixing of exchange rates creates European single currency in parallel with national currencies in 11 countries – Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain
1 January 2001: Greece joins eurozone
1 January 2002: euro notes and coins introduced; national currencies of 12 eurozone countries withdrawn
1 January 2007: Slovenia joins eurozone
1 January 2008: Cyprus and Malta join eurozone
1 January 2009: Slovakia joins eurozone
1 January 2011: Estonia joins eurozone