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New obstacle on road to eurozone for Estonia – lack of government bonds
Juhan Tere, BC, Tallinn, 10.11.2009.
Print version
Print versionThe lack of the government bonds in Estonia becomes a new obstacle on the country's entry into the eurozone, LETA reports, referring to Aripaev.
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Referring to a source in Brussels, Aripaev writes that while Estonia by now seems to have cleared the inflation and budget deficit hurdles, it must also comply with the requirement that the interest rate of its government bonds does not exceed the average interest rate of three lowest-earning government bonds of EU member states by more than two percentage points.
Since Estonia has not issued any government bonds, Brussels may instead use the interest rate of bank bonds. Since they have a much higher interest rate, it could render Estonia uneligible for the eurozone.
As sources told Aripaev, Estonian government is already considering issuing ten-year bonds just for the eurozone entry as did Luxembourg.
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