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Economy

Estonia to embrace euro along with New Year

media A woman carries shopping bags as she passes a poster informing people about … Reuters/Ints Kalnins

Estonia was on Friday preparing to farewell its currency, the kroon, and adopt the euro. The move has been pitched by the government as economic good sense, but has earned a tepid response from the public. The Baltic state will usher in the euro along with the New Year, at the stroke of midnight.

Estonia adopted the kroon in 1992 to replace the Soviet ruble. The nation of 1.3 million will become the 17th member of the eurozone.

Most surveys put support at around 50 per cent, with almost 40 per cent opposed. There are reported concerns about price rises, fears the euro is unstable and nostalgia for the kroon.

The rate of 15.6466 kroons to one euro has never changed.

There have been concerns that firms could try to exploit consumer perceptions that a euro price is cheaper than the multi-digit kroon equivalent.

Estonia's small eurosceptic movement says joining a currency bloc where members like Greece flouted the rules is foolish.

President Toomas Hendrik Ilves highlighted the symbolism of becoming the eurozone's third ex-communist member, after Slovenia in 2007 and Slovakia in 2009.

Estonia entered the EU and Nato in 2004, Europe's passport-free Schengen zone in 2007 and, in 2010, the OECD grouping of leading industrialised nations.

To avoid a frenzy, customers have been able to swap kroons for euros commission-free since 1 December and will be able to use them alongside the euro for the first two weeks of January.

 

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