The European Commission has today given Estonia the green light to become the 17th country to adopt the single currency after its regular Convergence Report concluded it now meets the required economic and legislative criteria.
“Estonia has achieved a high degree of sustainable economic convergence and is ready to adopt the Euro on 1 January 2011,
” Olli Rehn
, the Commissioner for Economic and Budgetary Affairs, said this morning.
But he repeated that to ensure that the adoption of the Euro is a success, “Estonia must pursue its efforts to maintain a prudent fiscal policy stance… [and] remain vigilant and react early and decisively
” should any problems emerge.
The latest report comes on the back of the recent announcement of a €750 billion economic stabilisation programme for Eurozone countries to protect the currency from further instability
and Mr Rehn said today's decision on Estonia "is also a strong signal about the euro area
" which "underpins the role of the Euro as medium-term policy anchor"
for the bloc as a whole. That said, Estonia's finances are rather well managed in comparison to other Eurozone countries - it has comparatively little public debt (only 7% GDP) and an annual budget deficit of 1.7% GDP in 2009.
The 2010 Convergence Report
also shows that the other eight
countries with a so-called 'derogation
' have made uneven progress on the road to the single currency, and so are not yet ready
to adopt the Euro.
As required by Article 140(1)
of the TFEU, the Commission (alongside the European Central Bank) reassesses the status of each country holding this status at least every two years or at the request of a particular member state.
The eight countries that consequently will have to wait longer to join the currency bloc are Bulgaria
, the Czech Republic
The Council of EU finance ministers (ECOFIN
) will take the final decision on Estonia’s adoption of the Euro in July once the European Parliament has given its opinion and the EU Heads of State and Government have discussed the subject at their summit meeting in June.