TALLINN — Estonia’s government deficit is one of the lowest in Europe according to the latest Eurostat figures, but the financial troubles of Greece may prevent the smallest Baltic states from joining the eurozone.
Estonia’s deficit of -1.7 percent of gross national product places the country as the third lowest on the continent, right after Sweden and Luxembourg and at the end of 2009, the lowest ratio of government debt to GDP in Europe was Estonia’s at [private_supervisor]7.2 percent, qualifying it under the Maastricht criteria for eurozone entry in 2011. Eurozone finance ministers will make their final decision on Estonia’s entry in July.
Eurozone accession has been a long-term goal for Estonian government and is reflected in the 2010 national budget. The government implemented many unpopular cuts and tax hikes to keep the deficit level below the limit imposed by the Maastricht criteria.
However Estonia’s euro adoption might be affected by Greece’s sovereign debt crisis.
The European Commission is likely to be more stringent on newcomers to the eurozone after evidence that Greece has manipulated with its financial reports.
The Fitch ratings agency has questioned Estonia’s entry to the eurozone as the fiscal consolidation measures the country is undertaking may prove unsustainable.
“There is a risk that the European authorities’ interpretation of the Maastricht criteria could still lead them to reject Estonia’s application,” Fitch reported.
Estonian Prime Minister Andrus Ansip made it clear during his visit to Finland in February that Estonia will fulfill the Maastricht criteria and hopes that there will not be any new criteria created for Estonia in light of Greece’s sovereign debt crisis.
Estonian economic analysts remain optimistic about the country’s chances for entry.
Tanel Rossi, deputy chancellor of the Ministry of Finance said that the enlargement of eurozone will take place in accordance with the European Union commencement contract and the rules of EU legislation.
“Therefore we have no reason to think that Greece’s crisis or other events affect the European Union’s decisions,” Rossi told Baltic Reports.
Heido Vitsur, an economist at the Estonian Development Fund said that while it looks likely, the European Central Bank may push for rejection.
“At the moment I think that the European Commission supports us but the European Central Bank is strongly skeptical,” Vitsur told Baltic Reports. “If European Commission will stand on its position to accept us in accordance with Maastricht criteria, and will not start analyzing other factors, then we will get the euro.” [/private_supervisor] [private_subscription 1 month]7.2 percent, qualifying it under the Maastricht criteria for eurozone entry in 2011. Eurozone finance ministers will make their final decision on Estonia’s entry in July.
Eurozone accession has been a long-term goal for Estonian government and is reflected in the 2010 national budget. The government implemented many unpopular cuts and tax hikes to keep the deficit level below the limit imposed by the Maastricht criteria.
However Estonia’s euro adoption might be affected by Greece’s sovereign debt crisis.
The European Commission is likely to be more stringent on newcomers to the eurozone after evidence that Greece has manipulated with its financial reports.
The Fitch ratings agency has questioned Estonia’s entry to the eurozone as the fiscal consolidation measures the country is undertaking may prove unsustainable.
“There is a risk that the European authorities’ interpretation of the Maastricht criteria could still lead them to reject Estonia’s application,” Fitch reported.
Estonian Prime Minister Andrus Ansip made it clear during his visit to Finland in February that Estonia will fulfill the Maastricht criteria and hopes that there will not be any new criteria created for Estonia in light of Greece’s sovereign debt crisis.
Estonian economic analysts remain optimistic about the country’s chances for entry.
Tanel Rossi, deputy chancellor of the Ministry of Finance said that the enlargement of eurozone will take place in accordance with the European Union commencement contract and the rules of EU legislation.
“Therefore we have no reason to think that Greece’s crisis or other events affect the European Union’s decisions,” Rossi told Baltic Reports.
Heido Vitsur, an economist at the Estonian Development Fund said that while it looks likely, the European Central Bank may push for rejection.
“At the moment I think that the European Commission supports us but the European Central Bank is strongly skeptical,” Vitsur told Baltic Reports. “If European Commission will stand on its position to accept us in accordance with Maastricht criteria, and will not start analyzing other factors, then we will get the euro.” [/private_subscription 1 month] [private_subscription 4 months]7.2 percent, qualifying it under the Maastricht criteria for eurozone entry in 2011. Eurozone finance ministers will make their final decision on Estonia’s entry in July.
Eurozone accession has been a long-term goal for Estonian government and is reflected in the 2010 national budget. The government implemented many unpopular cuts and tax hikes to keep the deficit level below the limit imposed by the Maastricht criteria.
However Estonia’s euro adoption might be affected by Greece’s sovereign debt crisis.
The European Commission is likely to be more stringent on newcomers to the eurozone after evidence that Greece has manipulated with its financial reports.
The Fitch ratings agency has questioned Estonia’s entry to the eurozone as the fiscal consolidation measures the country is undertaking may prove unsustainable.
“There is a risk that the European authorities’ interpretation of the Maastricht criteria could still lead them to reject Estonia’s application,” Fitch reported.
Estonian Prime Minister Andrus Ansip made it clear during his visit to Finland in February that Estonia will fulfill the Maastricht criteria and hopes that there will not be any new criteria created for Estonia in light of Greece’s sovereign debt crisis.
Estonian economic analysts remain optimistic about the country’s chances for entry.
Tanel Rossi, deputy chancellor of the Ministry of Finance said that the enlargement of eurozone will take place in accordance with the European Union commencement contract and the rules of EU legislation.
“Therefore we have no reason to think that Greece’s crisis or other events affect the European Union’s decisions,” Rossi told Baltic Reports.
Heido Vitsur, an economist at the Estonian Development Fund said that while it looks likely, the European Central Bank may push for rejection.
“At the moment I think that the European Commission supports us but the European Central Bank is strongly skeptical,” Vitsur told Baltic Reports. “If European Commission will stand on its position to accept us in accordance with Maastricht criteria, and will not start analyzing other factors, then we will get the euro.” [/private_subscription 4 months] [private_subscription 1 year]7.2 percent, qualifying it under the Maastricht criteria for eurozone entry in 2011. Eurozone finance ministers will make their final decision on Estonia’s entry in July.
Eurozone accession has been a long-term goal for Estonian government and is reflected in the 2010 national budget. The government implemented many unpopular cuts and tax hikes to keep the deficit level below the limit imposed by the Maastricht criteria.
However Estonia’s euro adoption might be affected by Greece’s sovereign debt crisis.
The European Commission is likely to be more stringent on newcomers to the eurozone after evidence that Greece has manipulated with its financial reports.
The Fitch ratings agency has questioned Estonia’s entry to the eurozone as the fiscal consolidation measures the country is undertaking may prove unsustainable.
“There is a risk that the European authorities’ interpretation of the Maastricht criteria could still lead them to reject Estonia’s application,” Fitch reported.
Estonian Prime Minister Andrus Ansip made it clear during his visit to Finland in February that Estonia will fulfill the Maastricht criteria and hopes that there will not be any new criteria created for Estonia in light of Greece’s sovereign debt crisis.
Estonian economic analysts remain optimistic about the country’s chances for entry.
Tanel Rossi, deputy chancellor of the Ministry of Finance said that the enlargement of eurozone will take place in accordance with the European Union commencement contract and the rules of EU legislation.
“Therefore we have no reason to think that Greece’s crisis or other events affect the European Union’s decisions,” Rossi told Baltic Reports.
Heido Vitsur, an economist at the Estonian Development Fund said that while it looks likely, the European Central Bank may push for rejection.
“At the moment I think that the European Commission supports us but the European Central Bank is strongly skeptical,” Vitsur told Baltic Reports. “If European Commission will stand on its position to accept us in accordance with Maastricht criteria, and will not start analyzing other factors, then we will get the euro.” [/private_subscription 1 year]
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