At the meeting held today, the members of the government cabinet listened to the information presented by the Minister of Finance regarding the economic forecast for the spring and found that the joining of Estonia with the euro zone will be possible on 1 January 2011 at the latest.
According to Prime Minister Andrus Ansip, the economic forecast gives reason to believe that fulfilling the criteria to join with the euro zone this fall is realistic, which would allow Estonia to adopt the euro at the beginning of 2011.
“With the current knowledge, 1 January 2011 is a sufficiently feasible deadline for joining the euro zone,” Ansip said. “The establishment of a deadline is necessary for relaunching practical preparations. The preparations by companies and banks for the adoption of the single European currency should start 9-12 months before the adoption of the euro.”
Although the main scenario prescribes joining with the euro zone on 1 January 2011, it was decided to leave open the possibility to join it on 1 July 2010 as well. For this, the expert committee working at the Ministry of Finance was assigned the task of working through the practical issues of joining in the middle of the year.
The members of the cabinet admitted that the critical factor in the achievement of this goal will be the amount of deficit in the budget of the government for 2009. Considering the tense situation with the budget, the Minister of Finance was given a task to present a proposal to the 9 April meeting of the cabinet regarding the extent of the changes required in the budgetary position.
Immediately before the cabinet meeting, the euro working group assembled at Stenbock House for a second meeting, also discussing the prospects for the adoption of the euro in the coming years in the light of the new economic forecast of the Ministry of Finance.
The working group includes the Prime Minister, the Minister of Finance, the Minister of Economic Affairs and Communications, heads of the factions of the government association in the Riigikogu, President of the Bank of Estonia and Chairman of the Estonian Chamber of Commerce and Industry.