Having scheduled its entry into the euro zone for January 2011, Estonia now faces a range of tough economic requirements – a challenge for an economy still struggling from the financial crisis, says Professor Ivar Raig.
Professor Raig from Tallinn University thinks that, although the Estonian economy is unlikely to undermine the EU’s stability, the criteria that the country is now facing as part of its bid for entry may be too damaging for the economy.
“Estonian public debt is relatively low. Even private debt is not very big. But the problem is that we need to fulfill all the so-called Maastricht criteria [euro convergence criteria – ed.]. We need to keep the inflation low, which also means that we need to keep our salaries low. And we can’t have the high growth that we need,” Raig said. “This is why the timing of joining the euro zone is not good.”