Inflation too high in Estonia

Inflation has been high for several months in Estonia, climbing to over five percent in January. This prompts the daily Eesti Päevaleht to examine the reasons behind this trend: "The most recent rise is different from the last one, which came about because Estonia had kept prices down to introduce the euro and Prime Minister Ansip was unwilling to sacrifice economic growth to fight inflation. ... Many believe the current rise is part of a supercycle. Huge amounts of money are also in circulation which the central banks - led by the US Federal Exchange - pumped into the markets during the crisis. ... But inflation has now exceeded the limit set by the European Central Bank, which will once again have to turn the interest rate screw over the long term. The Estonian government can spread its arms helplessly and put the blame on others. But it would be good for advisors to address the question of how Estonia can free itself from inconvenient foreign influence and the undesirable side-effects of joining the Eurozone."

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