The impact of EMU's third stage on Estonian economic development, 1999-2000

Abstract

The study looks at the effects of the introduction of the euro on the Estonian economy.A priori, introduction of the euro may affect the Estonian economy through several different channels.The study focuses mainly on Estonia s foreign trade, banking system and capital flows.In short, it is not possible to discern any clear and definite effects of the euro at this point in time, although some emerging trends may be attributable to the introduction of the single currency and Estonia s EU accession process.Estonia has become quite integrated with the EU, and this trend is expected to continue also in the future. Key words: Estonia, Economic and Monetary Union, foreign trade, capital flows