OREANDA-NEWS. On March 11, 2009 Deputy Governor of Eesti Pank MARTEN ROSS stressed at the meeting held at the Estonian embassy in Finland that the primary risk factors of the Estonian economy have receded markedly and the vulnerabilities referred to in recent months by some analysts are based either on outdated data or superficial analyses, reported the press-centre of Eesti Pank.

"Estonia's economic growth is no longer dependent on continuous external financing and Estonia's current account is regaining balance. The need for external financing is fully covered by the inflow of resources from EU structural funds. The rumours about Estonia having a short-term external debt which has to be quickly repaid are not true. Such claims are based on data misinterpretation," explained Ross.

The central bank Deputy Governor emphasised the Estonian banking sector, which is integrated with Nordic banking groups, is reliable and stable. "The Estonian banking sector has no longer the need to borrow funds from their parent banks; our banks are now able to finance themselves on account of local depositors. The Estonian banking system is well-capitalised and if loan losses grow, this will not pose a threat to the credibility of banks. The banks' capital buffers, which are largely the result of previous years' high profitability, are more than sufficient to cover all the risks both this and next years," said Ross.

When talking about the prospective euro adoption, Ross said that Estonia is very likely to meet all the Maastricht criteria at the end of this year, thus it is possible the country may change over to the euro in 2011.

As regards Estonia's economic growth, Ross admitted the global crisis has had a strong impact on the situation and growth outlooks of the country's economy. "At the same time it has to be taken into account that Estonia entered the economic adjustment period already earlier and the current external environment shock has affected the entire region relatively evenly. Estonia's economy and labour market have proved to be flexible and able to adjust to the changing environment. The very strong macroeconomic framework, fixed-exchange rate currency board system and flexible economy help Estonia maintain strong medium-term growth outlooks. There is no doubt we have the prerequisites for being among the first ones exiting the economic crisis and the adoption of the euro would strongly contribute to this," Ross said.

Andrus Saalik, Head of the Macroeconomic Policy Department of the Ministry of Finance, who also participated in the meeting, confirmed that Estonia's objective is to keep the general government budget deficit below 3% of GDP. "The government's medium-term goal is to restore a budget surplus," said Saalik.