Euro becomes official currency in Estonia

 

Estonia has become the first ex-Soviet republic and 17th European nation to adopt the euro, Europe’s single currency.

The Estonian people can exchange their former currency, the kroon, at a rate of 15.466 kroons for one euro. According to government officials switching to the euro went without difficulties. 85 million coins and 12 million banknotes went into circulation.

Prime Minister Ansip declared on television that the euro has finally made Estonia, which joined the EU in 2004, a true European country.

 

For many years the Estonians showed that they had the iron will to adopt the euro. But it wasn’t easy for the small Baltic country to meet the strict standards necessary for joining the euro club. In 2008 the global financial crisis hit the country hard.  The inflation rate of was over 10% and unemployment was high. The government cut spending and raised taxes and told the population they had to tighten their belts.

As the European Union struggles financially with Ireland and Greece, Estonia may be the last country to adopt the euro for some years. The next countries that plan to change to the euro are the Baltic States Latvia and Lithuania in 2014. Governments in other eastern bloc countries are not so sure about becoming euro members. Poland, Hungary and other Eastern European countries want to change to the single currency one day, but have not set exact dates.

 

Euro coins and banknotes

Euro coins and banknotes

 

 

Estonians have been dependenton other currencies in the past. In June 1992 the country switched from the Russian ruble to the newly created kroon, which they immediately connected to the German mark. In 1999, when the euro was introduced in 11 European states a fixed exchange rate was set. It has stayed the same until today.

As support for the euro ebbs in more and more European nations, 54% of Estonians are in favor of the single currency.

Those in favor of the euro hope that the value of their money will stay the same and that travelling within Europe will be easier. Estonian businessmen expect that more western investors will bring money to the country because of the stable euro.

Not all Estonians are so enthusiastic about their new money.  The poorer part of the population is afraid that because of the euro, food and other products will rise in price. They also fear that they will have to pay the price for bailing out Greece and Ireland.

 

 

Related Topics

 

Words

  • according to = as said by….
  • adopt = accept
  • bail out = financial help that is given to a country
  • BalticStates= group of ex-Soviet states between Russia and Scandinavia
  • circulation = here: to bring to the people
  • coin = a flat piece of metal used as money
  • connect = link to
  • currency = the system or type of money that a country uses
  • cut = reduce, lower
  • declare = to say officially
  • dependent on = need something  in order to exist
  • difficulty = problem
  • ebb = fade , go away slowly
  • enthusiastic =excited
  • exchange = to give something and get something else in return
  • exchange rate = the value of the money of one country compared to the money of another country
  • expect = think that something will happen
  • former = last
  • global = worldwide
  • immediately = at once
  • in favor of = to be for something
  • introduce = here: begin
  • iron will = to really want to achieve or do something
  • necessary = needed
  • official = a person in a high position
  • raise = go up
  • rate = you exchange something according to a scale
  • rise = go up
  • set = announce
  • single currency = one form of money for many countries
  • stable = value that is always the same
  • standard = rule
  • strict = exact
  • struggle = fight
  • support = to approve of , to be for something
  • switch = change
  • tax = the money you must pay to the government, which is then used to pay for other public services
  • tighten your belt = to spend less money than you normally do
  • true = real
  • unemployment = the number of people in a country who cannot get a job
  • value = what something is worth