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The euro in Estonia (0)

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Kati-Liis Karu 03.01.2011
The euro in Estonia
Joining the European Union in 2004 made people in Estonia think about the changing of currency . We had almost six years to get used to the fact that the Estonian kroon is eventually going to end. In that time there was a lot of discussion about whether we should stick to the kroon or change our money to the euro. Lots of people were afraid that they lose their money during the period of transition - this belief was quite popular among people who still remember the time when the Russian rubles were changed into kroons and did lose much money. Luckily there haven ’t been any complaints yet.
The reason I chose this political concern is its contradictoriness. I myself dislike the fact that the kroon is “leaving us” but I hope that in the long run it will seriously benefit us. According to Conjuncture Institute’s research 39% of respondents don’t care about this issue. 34% of responses were negative and only 25% positive . Most of the negative responses came from elders and the positive ones from people aged 30-49 years.
They say the positive side of euro is for example that comparing prices is easier in euro area countries and the transaction costs will decrease. They also affirm that euro improves the standard of living - I hope they are right because at the moment Estonia is one of the poorest countries in the European Union being ahead of only Poland , Latvia and Lithuania ( based on statistics of 2004).
I also picked this problem due to the unawareness of myself and many others . If I help at least one person (excluding myself) to clarify this concern then I’ve achieved my purpose .
European Union is a political and economic union, which has 27 member countries. 17 of them have taken collective currency into use - euro. The main goal of this union is to assure uncommitted movement of citizens, commodities, services and capital.
The first usage of euro (as an electronical currency) was in 1999 within banks and enterprises . In 2002 first bank - notes came into money- traffic . The whole value of issued euro coins and notes is over 704 billion euros.
In 1995 on 25th November Estonian prime minister Tiit Vähi signed the application , which requested the accession of Estonia into the European Union. As mentioned before , Estonia joined the European Union in 2004. When “we” signed the contract, we also accepted the simple main terms :



According to Vahur Kraft , the leader of Estonian Nordea Bank, the euro creates many new opportunities for the country’s economy and the society as a whole. Bo Kragh, the vice president of the Bank of Estonia, has a bit different point of view. He has said in his article that the euro takes away our financial independence. Kragh says the Bank of Estonia won’t be an independent institution anymore and it will be a branch office of European Central Bank from now on. That won’t change much for average persons though, but the state loses the opportunity to manage monetary policy independently.
The importance of this concern is probably known to everyone, who is more or less interested in the future of our country and ourselves. Last few years there have been a lot of discussion about euro in newspapers, TV, radio shows et cetera - so there shouldn’t be a citizen of Estonia, who doesn’t know anything about it.
Many of us think that kroon is one of our national symbols and for that reason they were against the coming of euro. It’s like we’d give away our national bird swallow or even our flag - so people were very defensive about it - and it also has a definite meaning as the attribute of independence. People even arranged many different funerals for the kroon in various places of Estonia on the 31st of December. Edgar Savisaar , the leader of Centre Party (Keskerakond), has brought out one main point in his article - progressive tax is getting closer. Somehow I’m not very happy about this one. It seems to me that it is a bit unfair. People, who have built their career up with hard work and patience shouldn’t pay more taxes for it. Then again , less wealthy families shouldn’t be obliged to pay as much as the rich ones do. This is a very complicated problem and I’m not even sure , which side I’m on.
The leader of Criminal Police Bureau, Lenno Reimand, has brought attention to this very serious problem in his article - the counterfeiting of euros. “The euro offers new opportunities in criminal activity , which have not existed before,” he says. By that he means the fact that euro is unknown for Estonians in cash and for criminals it’s quite likely to act on this field.
On the 2nd of January I saw one counterfeiting incident myself while shopping . In the cashier’s office next to the one I was in, a man paid his bill with a 5€ banknote. It was a fake one and the cashier immediately called the police and the shop manager . I saw he was really confused and heard he got the fake banknote from Statoil in Tallinn. I don’t know how this story ended , but one thing I know for sure - the banknote got taken away from him.
The sources I used were all from the Internet . I couldn’t use any books to search information about the coming of euro, because as far as I know there is none . I also haven’t kept those leaflets that were sent to every household in Estonia, so I couldn’t use them either. With regard to the papers, then I don’t have any of these in my home too - we read the news online and watch the newscast from television .
One newspaper actually did help me a lot - it was the online version of Estonian Daily Newspaper (Eesti Päevaleht). They had lots of articles about the euro to choose from, so I picked out the ones that were necessary or interesting to me. I also checked articles from the online version of Postimees , but lots of them are with an entertaining purpose. As the result of long search I actually did find a few useful articles from there too.
TV-programmes didn’t help me at all. The only one I could remember was Euro News, but this short clip , that was repeatedly shown, wasn’t useful at all.
Wikipedia is the site that has the best general info about almost anything a person might need. This, as well, is the place where I took my first information from.
Also, a lot of information about the period of transition I got from the special site (europa.eu), which introduces the European Union, the euro and everything that relates to this topic.
These various newspapers have treated this concern very, very differently. As many as we have people in Estonia, as much we have possible dissimilar opinions about the coming of euro. Some people have very negative attitude about the euro, yet some of them are really satisfied with the fact that we changed the kroon for the euro.
The problem has solved as it was planned to. The kroon was replaced with the euro and is now left behind in the past. We have less than two weeks to say goodbye to the kroon and change all our money. The solution could have been totally different, but the people of Estonia voted “yes”, when we were asked if we wanted to join the European Union.
This event has already found distrustful repercussion. Some people have stated that the European Union is going to find an end soon and the whole association will fall apart. Jürgen Ligi, the minister of finance has his own thoughts about this. In an article from EPL he has said that the gossip about the ending of eurozone is not serious - politicians do not think about leaving from the eurozone, because they have invested too much trust and money into it.
On the same topic Siim Kallas, the vice president of European Commission, has also affirmed that we are not leaving from the eurozone. “It‘s very easy to leave the eurozone, but no-one is even thinking about it.” He explains the simplicity - we could just exit the eurozone system, print our own bank-notes again and start over. Questionable would be the fact if we’d gain the needed trust again. There are many other aspects too but these are the main points.
In conclusion I think that joining the euro-zone is very wise decision and will do more good to the economy of our country than bad.
Sources
http://europa.eu/abc/european_countries/eu_members/index_et.ht m
http://en.wikipedia.org/wiki/Estonian_kroon
http://www.epl.ee/artikkel/590063
http://www.suite101.com/content/richest-european-union-countries-a8748
http://euro.eesti.ee/EU/Prod/Euroveeb/index.jsp
http://et.wikipedia.org/wiki/Euroopa_Liit
http://en.wikipedia.org/wiki/European_Union
http://europa.eu/pol/enlarg/index_et.ht m
http://et.wikipedia.org/wiki/Euro
http://www.epl.ee/artikkel/584213
http://www.epl.ee/artikkel/588734
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