Tallinn meets the eurozone

Tallinn meets the eurozone

The Kroon and Euro. Photo: <a href="http://www.flickr.com/photos/european_parliament/4641929352/in/photostream/"> European Parliament (flickr)</a>
The Kroon and Euro. Photo: European Parliament (flickr)

The hostel worker was glaring at me. I'd asked her why, with the eurozone in chaos, everyone in Estonia seemed so jovial about having joined it.

"It's obvious," the 25-year-old Estonian, Laura Saar, spat out. "Because of Russia."

Seventeen years after the Soviets left this Baltic state, Estonians are still worried about their neighbor to the north. A deep fear looms over the tiny Baltic state, and the euro helps ease the paranoia that Russia will return to claim what was once hers.

I'd landed at Tallinn Airport several hours earlier. I'd expected to see bleak Soviet-era buildings, but instead was greeted by a totally different picture. Tallinn’s airport is decorated with an array of sparkling new coffee shops, restaurants and duty-free stalls, complete with smiling ads that remind visitors that as of January 1, 2011, Estonia has joined the eurozone. As I peered around the airport, I found it hard to believe that just a couple decades ago Estonia was still apart of the Soviet Union.

Since gaining independence in 1991, however, Estonia has made leaps and bounds in handling its political, economical and cultural affairs. By 2007, Estonia had met the requirements for EU accession. And despite the economic crisis of 2008 it still qualified to enter the eurozone in January. The Economist praised Estonia as a positive addition to the eurozone; The New York Times agreed.

They've got reasons for optimism. Estonia, a small country of 1.3 million, has the lowest total debt out of any other European country. Its economy is mostly foreign-owned and export-oriented. Despite the fact that it has been criticized for having a stagnant economy without free trade, in the 2008 crisis it was able to bounce back quickly and efficiently, unlike its fellow Baltic nations.

But I was eager to get the local opinion. I wondered how people felt about the transition to the eurozone. Were they worried given the near financial collapse in Ireland, Greece and Portugal? What about losing their currency? I assumed most Estonians would have reservations.

I was wrong.

After relaxing her glare, Saar offered to give me the basics. Some older Estonians were angry about losing the kroon, the young hostel worker said, but the general disposition was overwhelmingly positive.

It was an answer I heard again and again over the weekend: Being protected from Russia trumped the need to fuss over losing an independent currency.

"Even for the young people that don't remember the [Soviet] occupation … it is ingrained in our national consciousness that we have always been a conquered people," said Alex Lepp, a 27-year old graduate student. "For the sake of preventing this in the future our people have looked to the EU and NATO to protect them."

I was a little taken aback. Weren't people worried about the financial aspect of things?

"We have financial worries" about the failing EU economies, Lepp told me. "But the fear of Russia trumps our worry."

Small business owners gave me a different perspective. They still emphasized Russia as an important factor, but focused on the need for improved relations. Eliisabeth Kross, a 47-year old coffee shop owner, complained of how expensive goods are:

"We trade so much with Scandinavia…and so things likes clothes they are very expensive. If were were to trade with Russia, things would be so much cheaper. And since we adopted the euro, prices have gone up 15 kroon or so (15 kroon is about 1 euro)-- I am worried things will keep getting more expensive, and here in Estonia we cannot afford this. We do not have the same welfare system as the other European states."

One thing is clear: Russia remains an important factor in both Estonia's past and present. And though both the Estonians and the media feel generally positive about the transition to the eurozone, repercussions such as the rise in cost of living and further alienation from Russia are still at hand. What remains to be seen is whether the benefits of adopting the euro outweigh the costs.

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