Estonia's accession to the euro zone is in the country’s own interest despite the current crisis gripping the monetary union. The changeover to the euro, a world currency, boosts business confidence, investor confidence, and also the well-being and confidence of the Estonian people. The euro will support our economic stability, facilitate trade relations with EU member states, and establish Estonia as a part of one of the most influential economic regions in the world. In addition, adopting the euro will prevent the risk that the value of our money would decline and savings would be reduced. Transition to the euro makes travelling more convenient and cuts the costs of currency exchange for both private individuals and businesses.
The Estonian kroon was pegged first to the Deutsche Mark and later to the euro during the entire circulation period (since 1992). Due to the fixed exchange rate and the peg to the euro, Estonia was almost already a member of the euro area, except that the banknotes were different. Therefore the changeover from the kroon to the euro did not bring along any major economic changes, although transaction costs did decrease and the possible risks that endangered the kroon as a small currency with a fixed exchange rate disappeared.
It is quite clear that accession to the euro area is more beneficial for countries whose economies are closely integrated with the euro area. The close integration of Estonia's and the EU’s economies is reflected in the fact that Member States account for 80% of Estonia's external trade and more than 80% of foreign investment in Estonia. The adoption of the euro resulted in smaller transaction costs since the need for currency exchange decreased. Based on the experience of other countries, this will allow the country to save up to 0.2% of GDP. Most of Estonia's trade was euro-based, which means it is easier for companies to conduct business now that the country has joined the euro area: there is no need to settle in two currencies or exchange currencies, and prices are comprehensible and more easily comparable without extra calculations.
Joining the euro area and transitioning to the single currency hedges the risk of adverse exchange rate movements. A stable monetary environment, in turn, promotes fast economic growth. At the same time, accession to the euro area entails the obligation for Estonia to follow a balanced economic policy in the future as well.
Estonia's accession to the Economic and Monetary Union was the best and most reliable way to ensure the stability and low inflation level of the currency in circulation.