OREANDA-NEWS. July 16, 2010. In his remarks made after the final confirmation by EU finance ministers in Brussels that Estonia can switch to the euro currency from the start of next year, Estonian Prime Minister Andrus Ansip said the arrival of the euro is good for foreign investments, will simplify trade, offer a feeling of confidence to people who have taken a loan and reduce costs for currency exchange.

"I, too, regret having to give up Estonian banknotes, but unfortunately foreign investors do not have a lot of trust in small national currencies," Ansip told.

The prime minister was confident that Estonia will manage well as a member of the eurozone, especially given that it has managed well outside the common currency area.

When asked whether Estonia is ready to take part in the aid packages that eurozone members are planning to put together, Ansip said that this was going to happen proportionately with national wealth and could not be considered an obligation. "It must come from the heart and be connected with the hope that when you need help yourself, others will help you more eagerly too," he said, bringing the assistance offered by Estonia to Latvia as an example.

EU finance ministers on Tuesday unanimously adopted the decision and endorsed related papers that confirm Estonia's accession to the eurozone from January 1 next year, also setting the changeover rate at the present exchange rate of 15.6466 kroons to the euro.

The European Commission's Monetary Affairs Commissioner Olli Rehn told Estonian reporters that Estonia must remain competitive and continue its present fiscal policy. The last 18 years have shown that the decisions Estonia has made are right, he said.

Hailing the decision of the EU finance ministers as a recognition of our joint efforts and monetary policy, Finance Minister Jurgen Ligi said the Estonian state and local governments were faced with six months of serious work completing the practical preparations so that the changeover was as smooth as possible.

The governor of the Bank of Estonia, Andres Lipstok, said Estonia was ready for life in the monetary union as just like eurozone members it had gotten used to implementing change by means other than changing the exchange rate.

Lipstok said that Estonia adaptation to change had taken place via a conservative fiscal policy, an open economy and a flexible labor and product market. "We didn't have the need to adapt the economy using the exchange rate. In that respect eurozone does not bring any change for us," Lipstok said.

Estonian President Toomas Hendrik Ilves in his remarks issued on the occasion welcomed the EU finance ministers' final confirmation to Estonia's accession to the eurozone and added that the euro would add stability to the Estonian government and would show Estonia as a reliable partner.

"The European Union's finance ministers' today's [Tuesday's] confirmation to Estonia's accession to the eurozone from January 1, 2011 gives an insurance policy to the Estonian people and the Estonian economy," the president's office reported Ilves as saying.

"This along with the fixation of the changeover rate at the level of the present exchange rate is the last decision in Estonia's accession to the euro zone and thus recognition to all those who, despite complicated times, understood the necessity of the numerous difficult fiscal and economic policy decisions."

"For Estonia accession to the eurozone means joining one on of biggest currencies in the world. I underline that this is not a magic wand, which solves all our problems at one go and saves us from economic depression. But the euro will add stability to the Estonian economy, will simplify our trade relations, and a very important fact, Estonia will show that it is a reliable partner, part of a very influencial economic region."

Ilves said that the eurozone would certainly cope with its present problems, would responsibly find the necessary solutions and would step into the future stronger than before.

Ilves also praised the agreement  that Estonian businessmen's associations are going to sign at the end of August and whose signatories will underline that they will not use the transition to the euro for artificial distortion of prices.