OREANDA-NEWS. April 13, 2010. At his meetings with the Finnish Prime Minister, Minister of Finance and Central Bank managers, Prime Minister Andrus Ansip affirmed that Estonia has continued to satisfy in a sustainable manner all of the criteria for joining the euro zone and was ready to join the euro zone from the beginning of next year. The Prime Minister also affirmed that Estonia was also planning to continue a conservative budget policy in the future.

“Thanks to our keeping our finances in good order and effecting structural reforms, we are ready to join the euro zone from the beginning of next year,” Prime Minister Andrus Ansip said at the meetings. Estonia already met the inflation criteria in November of last year. Estonia’s government sector debt is the lowest in the European Union - 7.2 per cent of our gross domestic product. Last year, thanks to the structural reforms and a reduction in the public sector expenditure, Estonia’s government sector deficit was only 1.7 per cent of GDP, which is also one of the lowest in the European Union. The budget of the Estonian government sector had a deficit of over 3 per cent of GDP only in 1999, with the budget during the rest of the years either being either balanced or with a surplus from 2002-2007, when also the lion’s share of reserves were accumulated. “To date, we have government sector reserves worth approximately EEK 25 billion, which is 11.7 per cent of our gross domestic product," Ansip said.

In the estimation of Matti Vanhanen, Prime Minister of Finland, Estonia is likely the only country in the European Union to meet all of the Maastricht criteria. “The euro requires a positive signal, which Estonia's accession to the euro zone will certainly provide,” Vanhanen said. “I hope that Estonia is able to join the euro zone as soon as possible, as this is very important also to Finland,” the Finnish government head added.

Jyrki Katainen, Finnish Minister of Finance, acknowledged the work by the Estonian government at the meeting with the Prime Minister. “Your activities have been absolutely right for the country, and I set great store by it,” the Minister of Finance affirmed. In the estimation of the Finnish Minister of Finance, it is impossible to create new jobs without a stable economic environment. “The euro objective is important in the creation of stability,” Katainen said.

Both the Estonian Prime Minister, the Finnish government head and Minister of Finance agreed that Estonia's accession to the euro zone would alter the relations between the two countries, particularly tightening economic relations.

Currently, Finland is the most important export market for Estonia. Finland is the second biggest foreign investor in Estonia. Estonia’s exports are closely tied to the euro zone, with no less than 70 per cent of Estonia’s exports headed to countries in the euro zone.

At his meeting with Prime Minister Vanhanen, Prime Minister Ansip also provided information on Estonia's bid for its candidacy as the IT agency’s host country and thanked the neighbouring country for supporting Estonia. Namely, the Finnish Prime Minister has affirmed in an official letter Finland’s support for Estonia's candidacy for the host country of the IT agency.

In addition, tax policy issues were discussed. The need to coordinate the excise policy of both countries in the future was affirmed. The Estonian and Finnish government heads voiced the opinion that in the future, too, it would make sense to continue increasing the proportion of consumption and environmental taxes at the expense of reducing income tax.