Estonia becomes 17th member of the euro zone
- 31 December 2010
- From the section Europe
Estonia has become the 17th member of the eurozone - the first ex-Soviet state to adopt the EU single currency.
The changeover from the kroon to the euro started at midnight (2200 GMT) in the small Baltic nation of 1.3m people.
Despite market pressure on the eurozone and the Greek and Irish bail-outs this year, polls suggested most Estonians wanted the euro.
Prime Minister Andrus Ansip marked the event by withdrawing euros from a cashpoint.
"It is a small step for the eurozone and a big step for Estonia," he said, holding the euro notes.
For many Estonians, 20 years after breaking away from the Soviet Union, the euro is proof that they have fully arrived in the West, the BBC's Baltic region correspondent, Damien McGuinness, reports.
Estonia joined the EU in 2004 - one of eight former Communist countries that did so, including its Baltic neighbours Latvia and Lithuania.
Two other ex-Communist countries - Slovenia and Slovakia - are already in the eurozone.
Anxiety about prices
Estonia's government says the euro will attract foreign investors because devaluation is then ruled out.
However, poorer Estonians fear that prices will be rounded up, and that food will become even more expensive. And the prospect of having to contribute to bail-outs of richer eurozone countries is hard to stomach, our correspondent reports.
In the past year Europe's debt crisis has hit Estonia severely. The tough cuts in state spending, necessary to join the eurozone, have pushed unemployment to more than 16%.
To avoid a last-minute rush, Estonians were able to swap kroons for euros commission-free from 1 December, the AFP news agency reports.
Kroons will be used in parallel with the euro for the first half of January. Banks will swap Estonians' kroons for euros until the end of 2011 and the central bank will carry on doing so indefinitely.
The kroon has been pegged to foreign currencies from the start, first to the deutschmark and, in 2002, to the euro.
The rate of 15.65 kroons to one euro has never changed.
For business and the economy it's very good! But I don't like coins and now I need to buy a new purse! PR, Estonia
Although it is quite sad to say goodbye to our money, I am glad that many things will be easier now. There is no need to change money when travelling into other European countries and no need to double calculate finance investments. Most investments were in euros but for tax purposes you had to work out the finances in Estonian kroons. Most mortgages were also already in euros so now Estonia will save millions because the banks will not have to transfer them. Also there is no Euro fear since we already have been tied with the euro since the beginning, so no changes there. Mihkel, Tartu
I am a university student in Tallinn, Estonia and it seems to me that most of the population sees the benefits of the euro in the long run, but the melancholy of losing our own currency is widely felt. The kroon is younger than I am, so I have no experience of a currency change and this is probably the main difference between the youth and the older generations - they have been through a change already and see the kroon as a symbol of our independence, which we so strongly fought for just decades ago. I have kept some EEK bills, just in case I want to show them to my grandchildren one day! SL, Tallinn, Estonia
As an Estonian living in the UK, this is a great relief - on both a personal level and in seeing my country adopt common sense and become an even more attractive proposition economically for potential investors. For myself, instead of having to deal in three currencies through my travels in Europe, I can manage just two - the British pound and the Euro - the Kroon has (with all its sentimental value) become a nuisance over time. Economically, Estonia has been very liberal since its reindependence, a mindset that has been welcomed by the people as well. Whereas in a lot of countries the euro has been welcomed with concerns over the political implications, Estonians seem to welcome it as an opportunity to travel with further ease, develop business relationships with the rest of the euro-zone (and beyond) in an easier manner and attract interest to it as one of the leading ex-soviet state in the development since 1991. Henri, Manchester, UK
I say yes to the euro. We are a small country and now I feel more independent and free. Also I am a little bit sad - we have (or had) very beautiful money. Jaana, Tallinn, Estonia
I welcome euro with open arms. I love Estonian Kroons, but the euro is a symbol - a sign that economic reforms of the 90s were successful. A sign we have been accepted by Europe. Leino, Tallinn, Estonia
Estonia, being a small nation and a small economy, needs a guarantee for its economy. It's the question for investors whether they trust the Estonian economy. The Euro could be a sign that it is safe to invest to Estonia, and what Estonia needs today is indeed, foreign investments and new jobs! Mark, Tallinn, Estonia