15 December (BNS) – In its Tuesday issue, The New York Times contained an overview of the euro aspirations of Estonia and the other Baltic countries and of the problems connected with it.
The paper finds that Estonia has fared better in the financial crisis than its two fellow former Soviet republics Latvia and Lithuania because it was more prudent about foreign borrowing and fiscal discipline in the boom years.
The New York Times writes that the decision regarding Estonia’s accession to the euro zone would be made next summer and it would also send a powerful political signal about a country that used to be part of the Soviet Union, at a time when many Eastern Europeans are worried about Russian muscle-flexing.
Privately, some Western European officials and central bankers say the euro area has enough problems, “notably the huge fiscal deficits of countries like Greece, Ireland and Spain”, without taking in poorer new members.
The New York Times writes that many Eastern European governments complain that the economic criteria of the Maastricht Treaty, which laid down the rules for the euro zone, have been applied more stringently to the newcomers who joined in 2004 and 2007 than they were to the euro zone’s founders.
The paper writes that Estonia intends to have an impeccable case to present and has made additional progress on inflation, even in the past month, when analysts forecast the country would not join until 2012.
“It is probable that we will fulfil all the Maastricht criteria already in 2009,” Finance Minister Jürgen Ligi of Estonia said last week.
The article, by Reuters columnist Paul Taylor, quotes the opinion of EU Economic and Monetary Affairs Commissioner Joaquin Almunia in an interview to the Austrian magazine Profil that Estonia, which will be formally assessed by the European Commission in May, was well on its way to membership.
“This country has made good progress towards fulfilling the criteria,” he said. “If everything goes well, we could in June 2010 give the green light for the 17th member.”
The paper points out that while the admission of Estonia would bolster morale in the other Baltic states, which face at least two more years of sharp austerity before they can hope to qualify, some economists say the E.U. should be bolder and admit all three now.
The paper also mentions the opinion of Zsolt Darvas, a fellow at Bruegel, a research institute in Brussels, who argued that the E.U. should re-interpret the euro criteria to admit the three Baltic states immediately with compensatory economic measures, because together they account for less than 1% of the euro-zone’s economy, so the effect of any adjustment problems on the other members would be minuscule.