By Mike Collier
TALLINN - Estonian Prime Minister Andrus Ansip has re-asserted his country’s commitment to adopting the euro at the earliest opportunity.
Speaking during a visit to Slovenia, Ansip said : "We would like to join the euro zone as soon as possible. It's a great dream for Estonia... we will continue with our strong fiscal policy."
Slovenia became the first Eastern European state to adopt the euro, replacing its indigenous currency, the tolar, on January 1, 2007. Its path to euro-adoption has been closely studied by other countries wanting to join the eurozone and the parallels with Estonia are clear. Both countries are small but investing in education and hi-tech industries while concentrating on economic efficiency.
Ansip said inflation was the only obstacle remaining to Estonia's drive towards the euro.
"The rate of the Estonian kroon is pegged to the euro and when you control the exchange rate you cannot [also] control the level of interest rates and the volume of money on the market." Ansip explained.
"Inflation is a hot topic everywhere. It's not a surprise that inflation rate is increasing even here in Slovenia after the enlargement of the euro zone," said Ansip.
But despite repeated assurances that Estonian economic policy is on track, and exasperated statements from the central bank, devaluation rumours refuse to disappear.
Estonian businessman Leonid Tsingisser became the latest naysayer on Nov. 28. Speaking in the Eesti Päevaleht newspaper, Tsingisser described devaluation as inevitable.
“Devaluation is a matter of time,” said Tsingisser, a member of the People’s Union party. “It is inevitable. What is the point of devaluation if everybody can be prepared for it ?”