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Estonia’s accession to the euro area
The decision to join the European Union, which was approved at the 2003 autumn referendum, expressed also support
for joining the euro area.On 28 June 2004 Estonia joined the exchange rate mechanism ERM2, maintaining the currency board
arrangement with the unilateral commitment to keep the fixed exchange rate of the kroon against the euro (1 EUR =
15.6466 EEK).
Why?
Joining the euro area helps ensure the economic security and international credibility of Estonia, a small and open
economy.
- When Estonia joins the euro area, the country’s integration with the European Union will continue. This will
simplify the movement of goods and capital, ensuring sustainable economic development.
- Euro-area membership will help mitigate country-specific risks, thus also contributing to economic credibility. The
exchange rate risk related to the kroon will disappear.
- The introduction of the euro will be accompanied by declining transaction costs (especially currency exchange
costs) and better price comparability, which supports price stability.
- As a member of the euro area, Estonia will be part of one of the most influential economic regions in the world.
This means the country will have the possibility to impact economic policy decisions.
When?
The Estonian government and the central bank have set the goal to adopt the euro at the first opportunity, that is,
as soon as Estonia meets all the necessary conditions.Based on economic forecasts, the government has decided to set
the goal of reaching the €-day (i.e., the day Estonia will become member of the euro area and the euro will be
launched in Estonia) on 1 January 2011.
How?
To ensure a smooth changeover to the euro and coordinate associated activities, the government decided at its
cabinet meeting of December 9, 2004 to form the National Changeover Committee chaired by the Secretary General of the
Ministry of Finance.The National Changeover Committee has seven working groups dealing with issues related to the euro
adoption. The task of the working groups is to ensure a smooth introduction of the euro.The National Changeover
Committee supervised the preparation of the National Changeover Plan, which includes guidelines to government agencies
and information for the general public.
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