Dropping The Kroon

by Andrew Stuttaford

Despite some extremely tough times recently (themselves partly the consequences of distortions brought to the economy by anticipation of euro membership), Estonia, the most striking post-Soviet success story, is proceeding with plans to join the single currency, plans, naturally, endorsed by a political class that has already shown that it is arrogant enough to fit most comfortably with the rest of the Eurozone establishment.

The Sunday Telegraph takes up the story here: 

They have been urged to love the euro by “Princess Europa” in television adverts, and the European Commission sent them 450,000 cheap plastic calculators so they could convert their old money. Then there were the thousands of leaflets with a cartoon of a smiling stork delivering a euro coin like a baby that their government sent them, to make the changeover seem like fun. But with “E-day” fast approaching, the day when they must join the euro, many Estonians fear that what is about to happen to them will be anything but fun.

“The news from Brussels is worrying people very much; they fear they are joining a collapsing currency,” said Ivar Raig, a gangly economics professor who has been a Eurosceptic voice crying in the wilderness for most of the past year.

Warnings to his fellow Estonians, a people who are desperately keen to be accepted into the heart of Europe, about the dangers of joining the eurozone in the middle of a recession went largely unheeded. Until now, that is. The latest poll, taken in September, showed that 58 per cent of the Baltic nation’s 1.3 million people now agree with him and are unhappy about joining the euro in January, the first time a majority has opposed the move. Unfortunately for them, there is no chance of getting out of it now. Forty-five million euro notes and 194 million coins have been distributed to Estonian banks, ready for a changeover on New Year’s Day. It will be a January 1 that could give the entire nation a hangover for quite some time afterwards.

On Thursday Professor Raig addressed a packed public meeting at Tallin University where he was listened to carefully, and where dire economic fears were aired. Professor Raig warned his compatriots that the former Soviet Republic, which is one of the poorest countries in the European Union, may soon have to join an £85 billion bailout of Ireland which is currently being finalised, and perhaps also the Mediterranean countries.

“We are poor, and yet we may end up paying for Greek pensioners,” he said.

“The politicians never really discussed joining the euro with the public, and now it is too late.”

 Here we go again.

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