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Estonia Still on Track for Euro Adoption

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A bit of surprising news out of Estonia, as the ECB has backed the Euro hopeful with the lowest debt as percentage of GDP but the 4th largest inflation which will not sit well with the Bundesbank.

European policymakers put Estonia on track to adopt the euro in 2011, even as the European Central Bank warned that the Baltic state may struggle to keep inflation under control.

The European Commission said Estonia, a one-time Soviet satellite that joined the European Union in 2004, passes the economic tests to become the euro’s 17th member. It called Estonia’s progress in reducing inflation “sustainable” in a report in Brussels today.

In a separate judgment released simultaneously in Frankfurt, the ECB said Estonia’s conquest of price pressures reflects “temporary factors” and “it may be difficult to prevent macroeconomic imbalances, including high rates of inflation, from building up again.”

Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza

@alfonso_forex

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