Friday, January 7, 2011

Estonia, the Euro, Russia

At midnight on December 31, Estonia entered the Eurozone. From an economic standpoint, this was probably a good idea. To get there, Estonia has suffered a depression (not as bad as Latvia but worse, if you can believe it, than Iceland), with unemployment hitting 18% and a weak currency. As usual, shopkeepers promised on their cash registers not to raise prices after the Euro becomes the currency – and they won’t. This is largely because they have already raised prices. The same thing happened when the Euro was originally introduced in Germany, France and Italy so it is nothing new. Failure to adopt the Euro would have further threatened the Kroon.

Perhaps, more important than the economics of the move, is the political statement that has been made. The Russian Federation has put pressure on the Baltics more or less relentlessly since the collapse of the Soviet Union. Moscow was not happy with NATO membership status of the three states, and only slightly less so when they joined the EU. The threat to Baltic autonomy increased as Russia became a democracy In name only and rumblings began of the ill treatment of former Russian/Soviet citizens living in the Baltics, including requirements to learn local languages, the removal of memorials celebrating the “liberation” of the Baltics from Nazi rule by the Soviet army (which then stayed as part of the ultimate allied deals) and bellicosity toward Russia, especially in Estonia.

Then, of course, Georgia’s invasion by Russia, looming on the horizon for months, took place. Despite Moscow’s propaganda and the stupidity of the Georgian government, tanks rolling across a foreign border alarmed everyone from Tallinn to Astana. But now, the political message has been sent to Moscow that the Baltics, at least Estonia, is an integral part of the EU, NATO and the West. Despite the problems with the Euro, the political statement is more important and will, hopefully, begin to affect the mentality of the Russian Federation for the better - much as the overthrow of the Soviet bloc regimes in Poland, Romania and East Germany did.

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