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Estonia poised for Eurozone despite crisis

THE small Baltic state of Estonia is set next year to become the 17th member of the Eurozone, likely to be the crisis-hit currency area’s last enlargement for at least four years.

Despite European Central Bank doubts about Estonia holding down inflation, the European Union’s executive arm said the ex-Soviet state of 1.4m was ready for the euro, unlike bigger hopefuls such as the Czech Republic, Hungary and Poland.

Crucially, Estonia’s public finances were found to be in a healthy state.

“Estonia has achieved a high degree of sustainable economic convergence and is ready to adopt the euro on 1 January 2011,” said EU economic commissioner Olli Rehn.

The move to the Eurozone came despite Estonia suffering one of the EU’s worst downturns last year with an output drop of 14 per cent.

The country made the grade after cuts in spending and using budget reserves to cap its deficit.