Paul Taylor, NY Times
If governments in the euro zone are serious about wanting to expand monetary stability and prosperity into Eastern Europe, they should agree next year to admit Estonia to their single currency area in 2011.
The tiny Baltic state has fared better in the financial crisis than its two fellow former Soviet republics, Latvia and Lithuania, because it was more prudent about foreign borrowing and fiscal discipline in the boom years.
All three have pegged their currencies to the euro and endured contractions in their economies of as much as 18 percent. All have made deep cuts in public spending to cope with balance of payments problems made untenable by the global economic downturn.
Estonia is a test case for the willingness of the euro zone — and especially the zone’s most powerful member, Germany — to continue to expand in the face of worries about the economic cohesion of the existing 16 member states.
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The Case for Letting Estonia Into the Euro Zone