Estonia adopted the European single currency at midnight, ringing in 2011 as the 17th member of the eurozone, a bloc threatened by bailouts in Greece and Ireland and debt woes in Portugal and Spain.

Most surveys put support for Estonia's entry into the crisis-hit eurozone at around 50pc, with almost 40pc opposed. As a spectacular fireworks show lit up the sky over Tallinn, the 2004 Baltic EU entrant of 1.3 million which broke free from the crumbling Soviet Union in 1991 bade a reluctant farewell to its kroon, adopted in 1992 to replace the Soviet ruble. While the centre-right government of Prime Minister Andrus Ansip has championed the switch to the euro as economic good sense despite the eurozone's turmoil, replacing Estonia's highly symbolic kroon has received a muted welcome among average Estonians.

"
Estonia is the poorest country in the eurozone, so we have a lot of things to do also now after the goal of reaching the eurozone has been accomplished,"
Mr Ansip said hailing the historic moment. Joblessness shot up to nearly 20pc this year as Estonia's economy struggled to recover from a recession that saw GDP shrink by some 14pc last year. GDP is expected to expand by 2.5pc this year and 4.2pc in 2011, according to Estonia's central bank. Mr Ansip symbolically withdrew a new banknote from an automated bank teller at official ceremonies ushering in the euro at the national opera house as onlookers braved subzero temperatures.

'Estonia! Welcome to the Titanic' 31 Dec 2010 "
That's one small step for the eurozone and one giant leap for Estonia,"
he said. "
We are now a full member of the second biggest financial region in the world, with all of the advantages and obligations it brings."
"
Estonia's entry means that over 330 million Europeans now carry euro notes and coins in their pockets,"
European Commission President Jose Manuel Barroso said in a Friday statement ahead of the official midnight switch.

Most surveys put support for Estonia's entry into the crisis-hit eurozone at around 50pc, with almost 40pc opposed.
Opponents say that Estonia's timing could not be worse with the euro under threat after bailouts in Greece and Ireland and concerns about Portugal and Spain. A recent opinion poll in eurozone heavyweight Germany found meanwhile that 49pc of respondents wanted the deutschmark back.
But Mr Ansip's government has long insisted adopting the euro is an important signal to investors and will be a boon for businesses as 80pc of Estonia's trade is within the 27-nation European Union.

"
Estonia! Welcome to the Titanic,"
read posters plastered near the opera house by critics of the currency switch. "
Estonia is like a passenger that got the last ticket for the Titanic,"
said Anti Poolamets, the eurosceptic head of the "
Save the Kroon"
campaign. Pollsters also flag up concerns over price hikes and simple nostalgia for the kroon.
For the last 19 years it carried much more than just monetary value for Estonians and was seen as a tangible sign of the success of the country's patient post-war struggle for independence from the Soviet Union and came to symbolise national sovereignty. "
Estonians are very emotional, nobody really wishes to say goodbye to kroons and it is a sad moment for me also,"
Estonia's Finance Minister Jurgen Ligi told reporters. However bidding the kroon farewell was the "
only way to join the eurozone,"
he said. "
When we switched from rubles to our own kroon currency, I cried like most Estonians that day. There are no such emotions now, just a neutral feeling,"
Sirje Kaart, 46, told AFP as she withdrew her first euro banknote in central Tallinn after the switch.

Estonian President Toomas Hendrik Ilves meanwhile highlighted the symbolism of becoming the eurozone's third ex-communist member, after Slovenia in 2007 and Slovakia in 2009. "
Joining the eurozone in January 2011 will mean arriving in Europe again,"
Ilves told AFP. Estonia entered the EU and NATO in 2004, and Europe's passport-free Schengen zone in 2007. The kroon has been pegged to foreign currencies from the start, first to the deutschmark and then, in 2002, to the then newborn euro. The rate of 15.6466 kroons to one euro has never changed.

To avoid a frenzy, customers have been able to swap kroons for euros commission-free since December 1, and will be able to use them alongside the euro for the first two weeks of January. Money deposited in accounts was automatically converted. Kroons will be exchangeable at selected bank branches until the end of 2011, and at Estonia's central bank for an unlimited period.

::

I can only assume this is also a good move

Oddy

The attraction of the Euro for most small countries are that they know they can get bailed out when times get tough... about time the UK left the EU or risk subsidising further bailouts directly or indirectly.

meandmine wrote:

The attraction of the Euro for most small countries are that they know they can get bailed out when times get tough... about time the UK left the EU or risk subsidising further bailouts directly or indirectly.

It is time the UK got out before they have to put their hands in their pockets again. This year will bring some revelations with the Euro, The Irish could easily go back to the Punt and other countries in trouble may adopt their former currencies as well.

Germany's deputy foreign minister Werner Hoyer said: 'Estonia's accession to the eurozone is an encouraging sign for Europe as a whole because it shows the attractiveness of our common currency.' Complete garbage, they're joining because they know they'll get massive handouts, just like all the other poor members, and it'll be our money they'll be getting as usual.

Yet another poor country to help drag the euro to its doom. Like the Titanic I suspect there will not be enough lifeboats. So the rich will survive and the rest of us in steerage will go drown in debt.

With the increase in global trading and the increasing reliance on computerised transactions, it is inevitable that, one day, there will be a universal trading currency. Whilst this is far more likely to be the ubiquitious US Dollar than either the Pound or the Euro, the fact that they are fast approaching parity means that it hardly matters what you call it.

Estonia adjusts to euro amid concerns over currency's future

The people of Estonia are adjusting to a new way of payment after their nation became the first former Soviet Union state to dump its own currency and adopt the euro on New Year's Day. Government officials have warned however that concerns over the future of the single European currency put off bigger eastern European countries from joining, for up to a decade.

Crowds in Estonia's capital Talinn have braved freezing temperatures to sing and dance - many of them near cash machines, where they curiously look at their new currency, the euro.

Tallinn has also become a 2011 European Capital of Culture.

Yet critics are still in doubt over whether dumping the country's kroon was the right move for this Baltic state of just 1.3 million people.

Kirsi Altonen, who is originally from Finland, expresses mixed emotions about the euro.

"
I suppose that the prices will go up in Estonia. But it's easier of course to travel from Finland and so on. But..."
,

There are also skeptics in other Eastern European countries, such as Poland, the Czech Republic and Hungary.

They no longer seem in a hurry to join the club of 17 nations comprising the 'euro zone', saying they first want to see how debt problems are solved in troubled Ireland, Greece, Spain and Portugal.

Polish central bank governor Marek Belka has told local media that Poland would only join when there was "
order"
in the euro zone. He sees no reason to rush as, in his words, "
there are dramatic things happening"
.

Czech Prime Minister Petr Necas says introducing the euro would not benefit his country for a long time.

Hungary's Prime Minister Viktor Orban agrees. He says Hungary's introduction of the euro may be as many as 10 years away.

Mr. Orban says he does not want to give an exact date as many euro target dates were mentioned, and missed. But the prime minister admits that in his words
the introduction of the euro in Hungary "
does not seem realistic before the end of the decade."


Analysts had earlier mentioned 2016 as a realistic date for Hungary and said larger eastern nations such as Poland may not join before 2020.

Experts say several Eastern European countries fear introducing the euro would make them less competitive as it involves losing flexibility exchange rates.

The debt crisis faced by several EU member states has also undermined a popular idea that being a euro zone member guarantees easy access to cash and lower borrowing costs.

But Hungarian Foreign Minister Janos Martonyi denies that Hungary has abandoned the euro. He says the government wants to assist in helping to stabilize the euro zone during Hungary's European Union presidency, which began on New Year's Day.

"
We shouldn't believe that the euro is [only] for the euro zone countries. The euro is a matter for all of us. If the euro gets weaker, if the euro is in danger, we are all in danger,"
said Martonyi. "
And we all have to be fully aware that we know that Europe's strength, Europe's economic and political power, Europe's projection, Europe's ideas all depend upon a healthy and strong economic situation as reflected by a healthy and strong and save currency."


European Commissioner for Economic and Monetary Affairs, Olli Rehn, makes clear that the euro zone will face many challenges in the coming years.

"
Last decade to the past decade was the decade of turning [the euro] into reality,"
he said. "
And the present decade which is now starting will be the decade of the fundamental reform of the euro area, of the economic and monetary union."


Back in Talinn an elderly man, Tiit Toominte, who lived through the years when his country was part of the Soviet Union, has hopes for the euro currency. He sees the euro as key to doing business in the Baltics.

When somebody will go abroad from Estonia and will look on the prices of different products [such as] shoes [and] clothes, he says, it will be easily possible to compare the differences with Estonia. He says he hopes commerce will improve thanks to this.

If it's up to the European Commission, more Europeans will share his view.