The eurozone entry bluff

According to the Estonian paper Aripaev, Estonia may struggle with meeting the eurozone entry criteria in 2009. All because of growing budget deficit which could reach over 3 percent.

Taavi Veskimgi, former Minister of Finance, states that such situation could mean disaster. He adds that the government should launch some structural reforms for reducing public spending and raise budget deficit above the the Maastricht criteria. To say that the 2009 draft budget is balanced is fiction. Budget is balanced not when the government says it is balanced, but when budget revenues actually covers budget expenditure, says Veskimgi.

According to Estonian Ministry of Finance, nobody knows what will happen in 2009. Their optimistic prognosis expects that the average salary in Estonia will grow 7.5 percent next year. The Bank of Estonia, skeptical about this statement, called it a fairy tale and sadly expects no growth at all.