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Estonia joins Euro on verge of collapse
Date 28/05/2010 14:29  Author webmaster  Hits 2960  Language Global
By Marta Andreasen MEP
The Parliament is about to vote on whether Estonia should join the Euro next January. Needless to say the decision has already been made and this is just a rubber stamp.

You may well ask why another country would want to join the Euro when we read stories in the press about how much trouble it is in and how it's about to collapse.

All of the new countries, including Estonia, who joined the EU in 2004 and 2007 as part of their accession agreements committed to joining the Euro when they are ready. However it is very convenient that when the Euro needs a vote of confidence it is Estonia's turn to join and provide a boost.

How can they say that Estonia is ready? They have various criteria to examine, the most important of which is the so-called stability and growth pact. This means that candidates for the Eurozone must keep its public debt under control and Estonia has admirably succeeded with very good marks indeed. A model student.

But look at the price: in one year Estonian unemployment has shot up from 11.4% to 19.8% and that is only the official figure. Underemployment is not counted. This is really startling, a country becomes eligible for entry into a monetary union when it has depression-level unemployment.

But this is the modern story, if the bond market likes you, you are a star and nothing else matters. My view is that unemployment is to be avoided where possible and if devaluation or stimulus spending is possible it should be done.

Estonia has the lowest public debt in Europe and should be allowed to use its cushion for social and economic reasons. Instead it is being squeezed into the EMU straitjacket along with all the other countries in the Euro.

I think besides the clinical EU questionnaire on public debt, stability and exchange rates another level of enquiry should take place.

Other countries who are in the Eurozone should be asked to rate their experience with the currency union, and I mean ask the people, not the governments.

But that is never going to happen because they know what the answer would be.The European Parliament's report on the so-called "consultation" with the European Council on whether Estonia should be admitted to the euro is written by Mr Scicluna.

His draft report is very positive and even encourages the Estonian government to speed up its preparation for entry. I wonder how happy they will feel in a couple of years' time about being rushed.

I have written amendments to his report rejecting the Commission's proposal and calling on the Estonians to recognise the political nature of this currency union and that it is failing to answer the economic needs of those who are already members.