The European Union finance ministers gave the final approval to Tallinn joining the eurozone from January 1^st, 2011. The exchange rate for the conversion was set into 15.6466 Kroon per 1 euro.

Estonia will become the 17th euro member. Tallinn met all EU entry requirements on inflation, debt and deficit levels, interest rates and currency stability.

Estonia, along with Baltic neighbours Latvia and Lithuania, was badly hit by the global economic crisis as it saw five years of breakneck growth come to a grinding halt with double digit contraction.

“The key point is that it is a political decision rather than an economic decision (by the EU),” said Danske Bank economist Lars Christensen. “I don’t think it will bring any major boost to growth. Estonia is still slowly coming out of recession.” The adoption of the single EU currency is the culmination of a drive West started after the fall of the former Soviet Union in 1991.

Latvia, which had to take an IMF bailout in 2008, and Lithuania, are expected to enter the euro zone in 2014.

Of the EU’s 27 member states, 16 currently have the euro as their currency. Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Austria and Finland adopted the currency in 2002. Slovenia joined in 2007, followed by Cyprus and Malta in 2008, and Slovakia in 2009.