09 December 2010
Photo: AP
Split as Estonia Prepares to Join Eurozone
Estonia officially joins the Eurozone on January 1, becoming the 17th nation - the first in the Baltic region - to adopt the common European currency group. But with worries growing over Europe's ability to handle its debt crisis, many Estonians say the timing is wrong. Others worry the currency change will result in higher prices.
Despite concerns in Estonia about the future of Europe's common currency, banks in the capital city Tallinn are having trouble keeping up with demand for euro coin start-up sets.
But there is a growing public debate as Estonians prepare to join the eurozone. One pensioner calls it pointless.
"We don't need it," he said. "The size of notes is different and I don't have a suitable wallet for euros. What's the point of the euro? We're spending millions to bring it in while children in our schools don't have free lunches."
A new survey in Estonia shows public opinion evenly split, with some welcoming the currency conversion, while others say it will hurt Estonian pocketbooks.
"Of course prices will rise," said one man. "Comparing salaries here and in other countries, the difference will hurt."
"It's very good, especially for younger people when they travel," a woman said. "They will not need to exchange money into euros any more."
The reluctance of many of Estonia's 1.3 million citizens to embrace the new currency is a worry for the Estonian government, which also is trying to explain a five percent rise in food prices. But economist Hardo Pajula says the higher prices have little to do with the euro.
"The increase in food prices has been more due to the exceptionally hot summer in Russia, among other things, and in other parts of the world. But, of course, it gets attributed to the euro," said Pajula.
Economists say the most vulnerable period will be the first two weeks of the new year, when the Estonian economy transitions from the familiar kroon to a currency - many here still don't trust.