Is the Euro Ready to Adopt Estonia? Eric Fishel Brian Hall Brian Kares Margarita Quintero Chandrashekar Tamirisa* Abstract Employing Estonia as a case study, this paper raises some provocative issues about the adoption of the euro by New Member States (NMS) of the European Union (EU). The 1993 Copenhagen Treaty requires that upon satisfying the convergence criteria of the Economic and Monetary Union (EMU), countries acceding to the EU must adopt the euro. Having enthusiastically embraced open markets and institutions since its independence from the Soviet Union in 1992, Estonia stands out among the ten NMS that acceded to the EU in 2004. However, the current status of Estonia’s euro adoption raises several interesting issues about the readiness of the governance structure of the euro-zone, as much as the readiness of Estonia to adopt the euro. ______________________________________________________________________________ *Comments on this paper should be sent to the corresponding author Chandrashekar Tamirisa at ctamirisa@gmail.com . This paper was prepared by the authors toward fulfilling the requirements for a graduate class in international finance at Johns Hopkins University, Washington, D.C. The authors are grateful to Fabio Natalucci for his helpful remarks in the preparation of this draft. 1 Introduction In 1957, the European Union (EU) began as a regional economic agreement between France, Germany, Italy, Belgium, Luxembourg, and the Netherlands […]
