Estonia adopts the Euro

Discussion in 'Economics' started by peilthetraveler, Dec 31, 2010.

  1. Visaria


    Might be a good decision if they already think they will need a bailout. Otherwise, pretty dumb, it just raises prices for goods and services immediately, they lose control of monetary policy and they have to contribute to bailout Ireland et al.

    Their women are quite hot, so I may forgive them their stupidity.
  2. First, this had been in the making for many years, they just happened to finish the process at this - good or bad - moment.

    That said, adoption of euro means an automatic boos to tourism and exports. Also their own printing press came with much higher interest rates, in fact most major loans in the country (mortgages, etc.) were already denominated in euros, even if people were still being paid in kroons, so staying out and say devaluing their currency would have been devastating.
  3. Visaria


    Doesn't make a difference as to how long they were planning it, recent events should have served as a warning to stay out. They were basically lucky they stayed out for so long so they could witness events, yet they foolishly decided to plough ahead anyway.

    Only caveat is of course if they were going to require a bailout. You mention much borrowing was done in euros. If that was about to go in default, then joining would be an escape for them.
  4. Helps Estonia to buy time from inevitable economic collapse.
  5. What the hell is Maine, Connecticut, and Massachusetts and about a dozen other states still doing in the dollar zone? They are foolish to contribute to the inevitable bailout of New York, California, Illinois, and others. Same with Texas: they only stay with the US dollar and not rather print their own or even start using pesos is that they expect they will need a bailout. Crazy talk? Sure. It goes both ways.
  6. gucci


    It sure goes both ways if are not able te see any differences.
  7. From the euro perspective is would also lower the debt ratio every time they have an add to the EU currency adoption. There is still one eastern nation that is a non adopt. Poland is doing quite well on their own and has no real reason to enter use the Euro currency because it would be a equity loss. Monetary policy in the EU is even more complex than the US. Notice how you here more coming out of Merkle and less out of the Head of the EU, what is his name?

  8. You say no economic benefit. Intriguing. Please expand your reasoning. Start with international trade and capital flows.

    Also, it might be the translation, but doesn't Bohemia and Hungary also have its own currency? As well as Bulgaria, and the other two Baltic. If you consider them Eastern.
  9. Can I help you with your dyslexia? :p
    #10     Jan 4, 2011