Inflation Rate Is Above The Maastricht Criteria - Adopt The Euro Before Anyone Notices!

Just in time for joining the Euro zone, at arguably the worst time ever to have joined (I personally trust that things will be fine in the end, however) Estonia has an inflation rate somewhat in excess of that which was required by the Maastricht criteria for membership.

The current rate is 4.5% - joining the Euro in itself is an inflationary pressure, as people will be rounding up prices rather than charging 27 Euros and 49.5 Cents for things, and there has certainly been something of a rise in activity in the real estate market, though again this is probably trying to get in ahead of the Euro adoption. Compare this with the Maastricht criteria of 3 point something per cent.

This must grate in Lithuania in particular, rejected a few years ago, ostensibly for having a rate that was a couple of fractions of a per cent higher than it should have been or something miniscule (in fact there may have been more to the story - maybe being a part of the 'new' Europe that had backed the 'wrong' side during the 2003 Iraq invasion and needing bringing to heel).

Nevertheless we're in, or nearly in, the Euro, and in these days of turmoil I don't think a 4.5 per cent rate of inflation is anything to be reprimanded for; I am sure that many of the other countries missed some of the criteria in one way or another.

Furthermore, a little inflation can be a good thing (remember it was running at nearly 12 per cent in Estonia in 2008!), for instance as a sign of recovery.

There's a little discussion on this, more or less saying the same thing, on Edward Hugh's Facebook page which I won't post a link to, you can go and find it yourself if you're interested, but in any event here's a chart (which is from the Eurostat site) charting inflation in Estonia over recent years...