MNeagle
7th June 2010, 01:49 PM
June 7 (Bloomberg) -- European finance ministers endorsed Estonia’s bid to adopt the euro, setting aside the European Central Bank’s warning that the Baltic state may struggle to keep inflation under control.
“Estonia will become the 17th member of the euro area on Jan. 1, 2011,†Luxembourg Prime Minister Jean-Claude Juncker told reporters today after chairing the monthly meeting of euro- region finance ministers in Luxembourg.
The admission of Estonia, a former Soviet republic that joined the European Union in 2004, shows that the EU won’t let the debt crisis in western Europe prevent it from widening the currency bloc to the east.
Political backing for Estonia to adopt the currency next Jan. 1 comes in the face of the ECB’s concerns that Estonia’s inflation rate, at 2.5 percent in April, may jump in years ahead as economic growth outstrips the euro-area average.
The euro region’s 16 governments have the formal power over euro entry, with the ECB relegated to an advisory role. Today’s endorsement will be reviewed by government leaders at a June 17 summit, with a formal decision by finance ministers on July 13.
Estonia’s policies are geared to “implementing further structural reforms, maintaining fiscal discipline, preserving financial stability and avoiding the emergence of imbalances,†Juncker said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=acmFXV1AT8LI&pos=5
“Estonia will become the 17th member of the euro area on Jan. 1, 2011,†Luxembourg Prime Minister Jean-Claude Juncker told reporters today after chairing the monthly meeting of euro- region finance ministers in Luxembourg.
The admission of Estonia, a former Soviet republic that joined the European Union in 2004, shows that the EU won’t let the debt crisis in western Europe prevent it from widening the currency bloc to the east.
Political backing for Estonia to adopt the currency next Jan. 1 comes in the face of the ECB’s concerns that Estonia’s inflation rate, at 2.5 percent in April, may jump in years ahead as economic growth outstrips the euro-area average.
The euro region’s 16 governments have the formal power over euro entry, with the ECB relegated to an advisory role. Today’s endorsement will be reviewed by government leaders at a June 17 summit, with a formal decision by finance ministers on July 13.
Estonia’s policies are geared to “implementing further structural reforms, maintaining fiscal discipline, preserving financial stability and avoiding the emergence of imbalances,†Juncker said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=acmFXV1AT8LI&pos=5