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Estonia's role in the economic policy of the EU will increase after becoming a member of the euro area. The
possibility to participate in the EU financial policy provides us with the right to have a say in setting the key
interest rates in the euro area. Euro area membership means that both Eesti Pank and the Ministry of Finance will
maintain their key functions and will have to take on several new ones as well.
The role of Eesti Pank as a national central bank of the euro area
Until joining the euro area, the primary responsibilities of Eesti Pank include the formulation of Estonia's
monetary policy, arranging cash circulation, supervising the financial sector, and organising interbank and
international payments. The goal is to ensure the stability of the economy and the Estonian kroon, which form the
foundation of a strong state.
When the euro is put into circulation, the tasks of Eesti Pank will generally remain the same, but the international
significance of the institution will increase, as Estonia will start to participate in the euro area financial policy
making hand in hand with other national central banks and the European Central Bank. Eesti Pank is currently
responsible for ensuring the reliability of the Estonian kroon; in the future, the central bank will be engaged in
ensuring the reliability of the euro. As transition to the euro means that one currency is replaced by another one, the
issuer of the euro in Estonia will be Eesti Pank as agreed with the European Central Bank.
Governor of Eesti Pank will become member of the Governing Council of the ECB, which means Estonia will have its own
role in formulating the euro area monetary policy. Since Estonia's accession to the EU, Eesti Pank has been taking part
in the work of the General Council of the ECB, where representatives of the national central banks of all EU Member
States participate.
Eesti Pank will continue to perform all the tasks of a central bank in the Eurosystem. The objective of the euro area national central
banks is to ensure price stability and to this end they implement the single monetary policy in the euro area. Eesti
Pank will start to participate in the monetary policy decision-making procedure (e.g. fixing of interest rates), where
Governor of Eesti Pank will have an equal say with, for instance, the heads of Deutsche Bundesbank or Banca
d'Italia.
In order to contribute to making monetary policy decisions, Eesti Pank has to analyse the economic indicators of
Estonia and other countries. In addition, the bank also has a key role in developing and maintaining international
relations with other national central banks and international organisations, such as the IMF or rating agencies. As a
member of the euro area, Eesti Pank will participate in the joint management of reserves and development of settlement
systems.
Eesti Pank will continue to ensure smooth operation of payment systems in order to guarantee fast and efficient
interbank transfers, will contribute to the sustainability of the financial system, and compile the balance of payments
of Estonia. Arranging cash circulation will also remain one of the tasks. Upon joining the euro area, it will be Eesti
Pank's responsibility to supply Estonia with euro banknotes and coins.
Tasks of the Ministry of Finance
After becoming a full member of the Economic and Monetary Union and the introduction of the euro, representatives of
the Ministry of Finance will be participating in the work of the so-called Eurogroup. The Eurogroup is a smaller circle
within the ECOFIN (Council of Economics and Finance Ministers of the European Union), which makes no formal decisions,
but agrees upon the most important issues before ECOFIN meets. Although Estonia is a member of the European Union, our
representatives cannot yet participate in the Eurogroup meetings. However, the Minister of Finance of Estonia takes
part in the ECOFIN meetings.
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