Rebounding from last year’s 14.1 percent slump in economic output, Estonia says it met the euro’s debt, deficit and inflation targets in 2009 and will remain within the limits in 2010.

Barroso’s backing for Estonia signaled the European Union is pushing ahead with the expansion of the 16-nation euro to eastern Europe even as the Greek fiscal crisis raises questions about the currency’s solidity.

“Estonia will be judged on the basis of its own performance,” Barroso said. “Recent developments in other euro-area member states will not influence the commission’s assessment.”

Ansip cut the budget by 9 percent of gross domestic product last year, leaving the deficit at an estimated 1.7 percent of GDP, below the 3 percent limit for euro users. The statistics office will release final deficit figures on March 26.

Estonia is aiming for a 2.2 percent deficit in 2010. The commission warned on March 17 that possible revenue shortfalls put that target in jeopardy.

Spreads between Estonian and euro money-market rates have declined to 17-month lows, showing that investors expect the country to join the euro in January. A commission recommendation is scheduled for May 12, with a final decision by EU government leaders in June.

Estonia would be the third eastern European country to join the euro after Slovenia and Slovakia.

Toomas Hõbemägi

http://balticbusinessnews.com/article/2010/03/25/Barroso_Estonia_is_moving_closer_to_euro_entry_approval