Global General

Estonia becomes 17th member of euro zone

(Xinhua)
Updated: 2011-01-01 07:09

TALLINN - Estonia on Saturday officially adopted the euro, the single European currency, becoming the 17th member of the eurozone.

After the bell rang for the New Year of 2011, Estonian Premier Andrus Ansip, in a symbolic move, withdrew the Baltic country's first euro note from an ATM in the capital city.

A woman carries shopping bags as she passes a poster informing people about the adoption of the Euro in Parnu on Ded 28, 2010. [Photo/Reuters]

Estonia, a country of some 1.4 million people and poor in natural resources, declared independence from the former Soviet Union in 1991. From then on, successive Estonia governments had shown strong resolve to joining the European Union and the eurozone.

To this end, Estonia had made tough reforms to meet a Common Monetary Standard for Europe, including reforming the social security system and the taxation system, pegging the Estonia kroon in a currency board-type arrangement to the euro, and restraining inflation and unemployment rate.

In March 2009, the Estonian government decided to change the national currency to the euro on January 1, 2011.

In July 2010, the economic and finance ministers of all 27 European Union countries approved Estonia's accession to the eurozone from January 1, 2011.

The Council of the European Union agreed that Estonia had achieved a high degree of sustainable economic convergence and was ready to adopt the euro on January 1, 2011.

During its transition period, Estonia successfully met the eurozone's rules on public finances, with its gross debt in 2009 accounting for only 7.2 percent of GDP, and government deficit lowered to 1.7 percent.