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 Full text 
Monday, 14 June 2010 - Strasbourg OJ edition

Adoption by Estonia of the euro on 1 January 2011 (debate)

  Andrew Henry William Brons (NI). – Madam President, many think that congratulations should be given to Estonia; I offer the Estonian people my commiserations. The value of a country’s currency must reflect the relative demand for its exported and imported goods and services, as well as other monetary movements, and must change according to need. A country tied to a currency value that does not reflect the needs of its economy will find that any economic problems are aggravated.

The United Kingdom found this when we were members of the predecessor of the euro, the Exchange Rate Mechanism. We found ourselves locked not only into a single currency value, but also into a recession from which we escaped only when we left the ERM.

The Scicluna report congratulates Estonia on replacing current and capital account deficits with current and capital account surpluses. This appears to be good news, but there are dangers on the horizon. This surplus might result in the Commission and the European Central Bank setting the kroon-euro rate at too high a level. If Estonia then suffered a decline in the value of its exports relative to imports, a recession and balance of payments deficit would follow from which it would not be able to escape. Estonia will lose its monetary and fiscal sovereignty, and therefore political sovereignty, which is ironic for a country that only 19 years ago escaped from the clutches of the Soviet Union.

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