Baltic States' accesson to the Eurozone is compromised

Istvan Zsoldos, an economist from Goldman Sachs investment bank, highlights the rapid growth of the Baltic States - Estonia, Latvia and Lithuania - and considers that current overheating is compromising their accession to the Eurozone. In the short term, these countries are "heading towards a rather confused period and perhaps a recession. Latvia is a small economy, but the bubble and burst phenomenon will have repercussions. ... The ECB and the current members will think that an increased convergence [between these countries] is necessary before converting to the euro. The Baltic States have behaved as if they already belong to it. The ECB and Europeans are concerned about their reputations. It will be said that they accept the accession of countries that are still unstable. At the moment, the accession of the Baltic States into the Eurozone is scheduled for 2010. But this scenario is becoming less and less likely."

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