The Baltic state of Estonia today became the 17th European Union member to adopt the joint European currency, the euro. At the stroke of midnight, along with ringing in the new year the nation of 1.3 million bids farewell to its kroon, adopted in 1992 to replace the Soviet ruble. The kroon was born on 20 June 1992, the year after Estonia won freedom from the crumbling Soviet Union, which had taken it over during World War II.
The small nation's decision to change from the Estonian kroon to the euro was the final step in a two decade-long effort to integrate its economy with Europe after it achieved independence in 1991. It is the first former Soviet republic to join the single currency club. The inclusion of Estonia, a minuscule $19 billion economy, in the $12.5 trillion euro area is being touted for its symbolic importance after the currency was battered throughout 2010 by bad news. Two members (Greece and Ireland) required international bailout funds to avert bankruptcy.Estonia could be the last new entrant for several years as all other potential newcomers from Eastern Europe either shy away from adopting an unpopular currency or fail to meet criteria on budget deficits and inflation.
European Commission President Jose Manuel Barroso welcomed Estonia to the euro zone hours before the midnight changeover, saying the currency switch would boost the nation's economy and send a powerful message to all EU members.
"It is a strong signal of the attraction and stability that the euro brings to member states of the European Union," Barroso said in Brussels on Friday.
President Toomas Hendrik Ilves highlighted the symbolism of becoming the eurozone's third ex-communist member, after Slovenia in 2007 and Slovakia in 2009. Estonia entered the EU and NATO in 2004, Europe's passport-free Schengen zone in 2007 and, in 2010, the OECD grouping of leading industrialised nations.
"Joining the eurozone in January 2011 will mean arriving in Europe again," Ilves told AFP.
To avoid a frenzy, customers have been able to swap kroons for euros commission-free since December 1, and will be able to use them alongside the euro for the first two weeks of January. Around 1.1 billion kroons had been exchanged by Tuesday, Estonia's banking association said, and a similar amount deposited in accounts where they will be switched automatically. That represents around half the kroon cash in private hands, it said.
Estonia's euro coins, displaying a map of the country, after a public Internet vote were minted by eurozone neighbour Finland and shipped over recent months. Notes are identical across the eurozone. Bank cash machines were closed from Thursday evening to be filled with euros, and were to reopen at midnight Friday. Kroons from the bottom drawer can be swapped at selected bank branches until the end of 2011, and at Estonia's central bank for an unlimited period.
Despite an intense campaign to inform people about how the currency switch would work, long queues formed outside some Tallinn banks on Thursday, with many people wrongly worried they will no longer be able to use their kroons on Saturday.
Source: AFP, Wikipedia.
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