OREANDA-NEWS. July 16, 2010. European Union (EU) finance ministers endorsed documents at their meeting in Brussels on Tuesday that finally confirm the switch of Estonia to the euro from the start of next year at the present exchange rate of 15.6466 kroons to the euro.

This is the last of the approvals that were needed for Estonia to become the 17th member of the single currency area after it met eurozone entry requirements on inflation, debt and deficit levels, interest rates and currency stability.

After the changeover date of January 1 there will be a two-month period of parallel circulation of both the kroon and the euro in Estonia. During the period of parallel circulation the kroon remains legal tender, but change is as a rule given in euros in all stores and service institutions. In the estimate of the Estonian central bank 80 percent of euro cash should go into circulation via ATMs.

In ATMs money would be changed during 24 hours after 00:00 on January 1. The length of the process depends on weather, given that there are nearly 900 ATMs in Estonia, of them nearly 350 in the capital Tallinn.

During the period of parallel circulation ATMs will release notes of 10 and 50 euros. After that it will up to each bank to decide what denominations it keeps in its ATMs. 

In accounts kroons will be translated into euros at the official rate at the moment of the changeover.

Starting from the month of December private individuals in Estonia will be able to change kroon cash for euro banknotes without commission at the official exchange rate of 15.6466 kroons to the euro.

The money changing arrangement for December is meant for physical persons only and according to present plans only euro banknotes, but not coins, will be released.

The Bank of Estonia will start supplying euro coins to commercial banks in September and will start doing the same with euro banknotes in December.

Exchange of kroons for euros without commission at the country's banks will continue during 12 months after the changeover date. After that it will be possible to do the same at the Bank of Estonia indefinitely and with unlimited amounts of kroon cash.