I was on my way to an interview with prime minister Andrus Ansip on Estonia’s plans to join the euro next January. My taxi driver, Allan Alajaan, was only too happy to act as “voice of the people”.
“They speak to us just like they did under Communism,” he told me, referring to the Estonian political elite, who have pursued euro entry with almost evangelical zeal. “Back then, they said ‘make sacrifices now and everything will be wonderful when the harvest comes’. Now, they say the same things about joining the euro.”
He was referring to the tough fiscal measures taken to keep the budget deficit below 3 per cent of gross domestic product — the limit for euro entrants — even as the country went through a wrenching recession.
Estonia’s strong public finances helped it weather the crisis better than neighbouring Latvia, which was forced to turn to the International Monetary Fund for a €7.5bn bail out. But only in the troubled Baltic region could Estonia’s 15 per cent economic contraction last year look relatively good.
Alajaan took up taxi driving after his work as a photographer dried up during the recession. He doubts the euro will be a panacea for Estonia any more than it has been for Greece.
The Greek crisis has led some to question whether nervous eurozone members might find a reason to delay Estonia’s entry. At the prime minister’s office later, Ansip was at pains to stress that, far from being a burden, Estonia would shoot straight to the top of the fiscal class. Its budget deficit was 1.7 per cent last year, compared with 13.6 per cent for Greece, and its public sector debt is the lowest in the European Union at 7.2 per cent.
But while enthusiasm for euro entry remains undimmed in Tallinn’s corridors of power, what about in Alajaan’s taxi? Is it wise for Estonia to join a currency union that, according to some doom-mongers, is falling apart at the seams?
“They never tell us anything about the Greek crisis,” says Alajaan. “Apart from when they are telling us how much better our finances are.”