Economics, Estonia, EU – Baltic States, Financial Services

"The statement by Joaquin Almunia is an estimation of what we have done to reach that goal," he said.

Estonian central bank chief Andres Lipstok told AFP that meeting the eurozone entry criteria was the "biggest macropolitical goal of 2009 and 2010", adding that it would boost recovery from the deep recession.

In an interview Monday in the Austrian weekly magazine Profil, Almunia had said no new eurozone members were planned next year, writes LETA.

"There's one possible candidate for 2011: Estonia," Almunia was quoted as saying.

"This country has made good progress towards fulfilling the criteria. If everything goes well, we could in June 2010 give the green light for the 17th member," he said.

Sixteen of the EU's 27 member nations now use the euro. Estonia would be the third ex-communist state to switch, after Slovenia and Slovakia.

Last month, the International Monetary Fund also said Estonia was on track. Estonia shifted rapidly from a communist command economy to the free market after independence from the crumbling Soviet bloc in 1991, and joined the European Union in 2004.

Under the Maastricht Treaty that created European economic and monetary union, countries must meet certain conditions before they can adopt the euro. They mainly concern public finances, debt, inflation and exchange rate stability – the Estonian kroon is pegged to the euro.

Estonia had hoped to switch in 2007. But the government changed the date to 2008 in the face of rampant inflation and was later forced to put it on ice as the economic crisis loomed.

While the slump has helped reined in inflation, it has caused public revenues to plunge. The government is slashing spending to try to ensure it still can meet the Maastricht public finance target.

Estonia, a country of 1.3 million people, boasted growth of 10.4% in 2006 and 6.3% in 2007. But the economy shrank by 3.6% last year, and authorities raised the specter of a 15.3-% contraction this year.