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Judging by some news, it might look as if Estonia has managed to join the euro zone just as the system has slowly begun to disintegrate. Indeed, new crises await us in the near future. But will these crises prove to be fatal?

It seems that some Eastern European countries (and Iceland) have, at least temporarily, lost interest in the euro. Marek Belka, the President of the Central Bank of Poland, said the risks inside the euro zone are greater than outside it, and he has promised to postpone Poland’s joining of the euro zone until order is restored in the common currency area. As we know, due to the sudden decrease in the value of the Polish Zloty, Poland was the only EU Member State that managed to keep its real economic growth rate positive last year.

According to the predictions of the consultancy firm Capital Economics, the next countries to join the euro zone will be Latvia and Lithuania, where the common currency of the EU will be adopted in 2015. However, the local currencies of these two countries are rigidly tied to the euro. Other countries that enjoy more freedom due to the lack of such ties are taking their time joining the euro zone. “The Czechs have always been more cautious and the Poles are becoming more cautious too,” said Neil Shearing, the Senior Economist of Capital Economics. JP Morgan predicts that Hungary and Poland will adopt the euro in 2019, and the Czech Republic will follow suit one year later, in 2020.

The Germans, however, are dreaming of the return of the German Mark. The results of a study carried out by the YouGov-Institut revealed that 49% Germans wanted the German Mark back, 51% were not happy with the euro and more than 75% of the respondents blamed the euro for the decline in their personal well-being.

For Estonia, joining the euro zone means cutting back on currency exchange expenses. But it also stands for the chance to contribute to the development of our own fiscal policy for the very first time. And it also means that the country no longer has to fear the potential devaluation of its currency. For the very same reasons, other countries will also find it safer to invest in Estonia.

Numerous analysts have pointed out the decision of Statoil Fuel & Retail to move their financial centre to Tallinn, which, according to Klaus-Anders Nysteen, the company’s Chief Financial Officer was greatly influenced by Estonia’s adoption of the euro. Although the company will create only 5 to 6 financier positions in Estonia during the first year of the operation of the financial centre, the step itself might be of significant value. “When TeliaSonera’s acquisition of the remainder of the shares of Eesti Telekom in the fall of 2009 marked a turning point in the cycle, then this deal might also be a prediction of what is yet to come,” said Hardo Pajula, an Economist at SEB Eesti in one of his weekly commentaries published in December. Foreign investments should, hopefully, bring along the transfer of knowledge and many other positive trends as well.

Naturally, a sombre question still keeps lurking in the shadows – what will happen to the euro zone itself? No matter how we look at it, the next few months do not look very promising. In the next few months, many of the peripheral countries of Europe that have been struggling with the economic crisis will be facing the redemption due date of highly valued bonds. Or, to put it plainly – they should start paying back some of their loans. But since they lack the funds to do so, they need to emit a new set of bonds to redeem their prior obligations. According to some commentators, a storm will be heading towards us in January when Belgium, Spain, Ireland, Italy, and Poland are planning to issue bonds to the value of more than 45 billion euro. Be that as it may, one thing is for sure - the euro zone is facing a turbulent year.

Anyone who has been following the trends in international money markets for a while knows that the mood swings of the market participants resemble those of someone suffering from manic-depressive psychosis – things that are being praised one moment are being trampled on and cast aside as useless the next. When the euro zone was first created at the beginning of 1999 (although the euro found its way into people’s wallets three years later), the overall mindset was utterly pessimistic. The new currency was predicted to be fairly short-lived. However, this view soon changed. Two or three years ago, the leaders of the euro zone patted on each others’ backs approvingly and spoke about the “unimaginable success” of the common currency. And now, the days of deep depression have arrived.

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