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Estonian report Estonian report
by Euro Reporter
2010-07-17 09:30:41
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Estonia looks to boost euro support

The Estonian Finance Ministry has announced that it will launch a campaign to increase support among the general population for the country joining the euro zone at the start of next year. According to "Business Week", at present less than half the Estonian population - 45% - support the move to adopt the EU's single currency. Opposition to the adoption of the single currency is strongest among senior citizens and the Russian-speaking population.

Tea Varrak, chancellor of the country's Finance Ministry, told reporters at a press conference in Tallinn that he wanted to boost this to 65 per cent.


Estonia's accession to euro zone is in entire region's interest

Estonia's accession to the euro area is in the entire region's interest, because it will promote stability in all Baltic countries, build trust in the region's economic environment and signal that Latvia and Lithuania would also join the euro zone soon, believes Bank of Latvia President Ilmars Rimsevics.

Rimsevics admits though that, on the other hand, Latvia will lose time and investments, because investors will prefer to invest their money in a country that has proven it is able to keep things in order and has the euro as the national currency. In Rimsevics' opinion, Estonia's success has been thanks to the Estonian government's prudent budget policy. "We can learn from the neighbour’s example, and I believe that Latvia can do the same," he said.

Rimsevics agrees with Estonian President Toomas Hendrik Ilves' statement that the euro would not solve all Estonia's problems. "Indeed, the euro will not guarantee economic growth, but it will create better conditions for economic development. The euro is not an alternative to structural reforms, nevertheless, it means greater security," he said, adding that Investors, depositors, banks, companies and residents would trust the euro more than the kroon. As reported, the European Union finance ministers on July 13 gave the final approval for Estonia's accession to the euro area, which will happen on January 1 next year.


Estonia tops industrial production in EU

Estonia registered the largest annual increase in industrial production in the European Union in May, while Latvia follows as fourth. Of those countries whose data was available for Eurostat, industrial production rose in all European Union member states except in Greece, where the decline was -6.3 percent, and Bulgaria with -1.7 percent. The smallest Baltic State, Estonia came on first with 17.2 percent annual increase, Latvia is fourth after Luxembourg and Sweden with 13.2 percent, while Lithuania made a small 3.2 percent increase.

In month-on-month comparison the increase in Estonia was 2.4 percent passing Finland. Lithuania follows with 2.0 percent, and Latvia with modest 0.3 percent. According to Maris Lauri, Swedbank analyst, these results show that Estonian enterprises have restored their international competitiveness, however the domestic demand is still weak.

Lauri said that monthly numbers of Estonian industrial production and exports tend to fluctuate, but the overall trend seems to be very positive. “If things will continue improving in global economy then Estonia’s recovery should continue as well”

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