Estonia to join Eurozone on 1 January 2011

Having received approval from both the European Commission and the European Central Bank on its bid to enter the Eurozone in January 2011, Estonia can now be expected to receive the final green light to join next month. This decision will undoubtedly raise eyebrows in some quarters, given the recent Euro crisis and emergency measures.

On close inspection, it however becomes clear that Estonia's fiscal, deficit and debt policies have been solid for most of the past two decades and that the country easily fulfills the criteria for adoption. Moreover, the decision to admit is historic in the sense that it will be the first country of the former Soviet Union adopting the common European currency, which, 65 years after the end of World War II, is a fitting symbol for a future Europe that is more united than ever.

While a country of 1.3 million may not seem a very significant addition to the Eurozone, it represents the first of a member in the Baltic Sea region since Euro coins were first introduced in 2002. As a consequence, once the current Euro crisis has passed, Estonia's entry into the Eurozone will likely contribute to a changing awareness in other Baltic countries trying to make up their minds about Euro adoption. These include not only obvious countries like Lithuania and Latvia, but more significantly, Denmark and Sweden as well. A Baltic Sea region with most countries sharing one currency will make an attractive prospect, which has just become more realistic with one more piece having been added to the mosaic.