The euro was introduced in Estonia in 2007. The euro has the ISO code EUR and the currency is generally referred to by the € symbol. The euro is the currency of the European Union, to which Estonia has been a member since 2004. Overall, the euro is represented as the national currency in 24 European countries.
History of the Estonian currency and introduction of the euro
The euro was first introduced in the 18 European member states in 2001. In the course of the European mergers, six more countries were added. Admission to the common currency union was dependent on various factors, such as the inflation rate of the respective states that wanted to be admitted.
Estonia joined the euro area along with Latvia and Lithuania. In the case of Estonia, too, the high inflationary behavior of the Estonian kroon, the previous currency, was a factor that delayed admission to the European Monetary Union, as accession was planned for 2007.
The Estonian kroon was the currency of Estonia from 1928 to 1940 and from 1992 to 2011. Before 1928 there was the Estonian mark and after 1940 to 1992 the Estonian currency was the Russian ruble in the wake of the Soviet annexations. The Estonian kroon had banknotes from 1 kroon to 500 krooni, on which Estonian personalities, similar to the German mark, were depicted. Coins were valued from 1 senti to 5 krooni. Estonian landmarks could be seen on these.
With the introduction of the euro, which was postponed again and again in 2011, Estonia recorded lower new borrowing, so that the Maastricht criteria for the introduction of the euro were met. This is very noteworthy as at that time the financial and economic crisis in Estonia continued.
The Estonian euro coins show the outline of Estonia as a motif. You can also find the name Eesti on the back. A special feature of the minting is that the 1 cent to 50 cent coins have a deeper embossing on the reverse, whereas the 1 euro and 2 euro coins have a raised outline of the country. Due to the imprinting of the Estonian national borders, there was an annoyance with Russia in 2010/11, which also saw parts of Russian areas in the imprint.
As mentioned above, the Estonian kroon, Eesti kroon in Estonian, was the currency of the Republic of Estonia from 1928 to 1940 and from 1992 to 2010. Its ISO code was EEK. It is one of the forerunner currencies of the euro and has a fixed exchange rate of 15.6466 EEK to one euro.
When Estonia joined the European Monetary Union on January 1, 2011, the Estonian kroon was abolished in favor of the euro. For a transitional period until January 15, 2011, the Estonian kroon could still be used in payment transactions.
Exchange of the Estonian kroner
Estonian kroner that is still privately owned can be exchanged for an unlimited period at the Estonian central bank Eesti Pank.
History of the Estonian Crown
The Estonian kroon was introduced for the first time on January 1, 1928 as the successor to the Estonian mark, the first currency in Estonia, which became independent after World War I. It was linked to the Swedish krona at the same time and it was because of this reference that it got its name.
In order to increase the population’s confidence in the new currency, the Estonian kroon was subject to the gold standard. One kilogram of fine gold corresponded to 2,480 kroner, the coins and notes issued were entirely secured by gold reserves at the central bank.
During the Great Depression, the central bank abandoned the gold standard in 1933, devaluing the krona by 35% and pegging it to the British pound.
After the Soviet Union invaded the Baltic States after the Hitler-Stalin Pact, Estonia became part of the Soviet Union, the central bank was nationalized and the Estonian kroon was forcibly exchanged at an exchange rate of 1.25 rubles for 1 Estonian kroon, which is very unfavorable for the Estonians.
With the collapse of the Soviet Union in 1991, Estonia also regained independence. On June 20, 1992, the Estonian kroon became the national currency again. The official exchange rate for the Soviet ruble was 1:10 and each person could exchange a maximum of 1,500 rubles for 150 kroner.
The new currency was initially pegged to the German mark at a ratio of 1: 8, ie one German mark was worth 8 Estonian kroons. With the introduction of the euro, the currency was linked to it at an exchange rate of 1: 15.64664.
When Estonia joined the ERM II system on June 27, 2004 it was adjusted to 1: 15.6466. However, the introduction of the euro, which was targeted for 2007, had to be postponed by four years due to excessive inflation.