At the beginning of 2011, Estonia became the seventeenth
member of the European Monetary Union. This was preceded by a violent debate. The ECB opposed Estonia’s early accession. The country had fallen into recession after a real estate bubble burst; economic output plummeted by almost fourteen percent in 2009 and the inflation rate had soared to over ten percent. However, the introduction of the euro freed the country, which has only 1.7 million inhabitants, from the exchange rate risk vis-à-vis its most important trading partners Sweden, Finland and Germany. In turn, this was expected to lead to more foreign investment and greater stability for the national economy, because the EUR eliminated the fear of a devaluation of the Estonian kroon (EEK). Admittedly, since its introduction in 1992, the EEK had been pegged first to the DEM and then to the EUR. In this respect, Estonia was already interlocked with the European Monetary Union before joining it. – See opting-out arrangement. – See ECB Monthly Bulletin, January 2011, pp. 17 ff. (detailed presentation; table with comparative euro area/Estonia figures; assessment for the future situation in Estonia), ECB Monthly Bulletin, February 2011, pp. 17 ff. (financial sector in Estonia; overviews), ECB Annual Report 2010, p. 142 (much information and data on Estonia’s accession).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/