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Estonia to join the euro zone

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TEXT OF INTERVIEW

JEREMY HOBSON: When the clock strikes midnight in Estonia they won't just be popping champagne corks. They'll also trading in their old money -- kroons -- for their new money, Euros. Estonia will become the 17th country using the currency.

For more we turn to reporter Christopher Werth in London who has just returned from covering this story
in Estonia. Hi, Christopher.

CHRISTOPHER WERTH: Good morning, Jeremy.

HOBSON: It's been a tough year for the euro zone with bailouts in Greece and Ireland. The euro zone is what we call the area that uses the euro currency. I have to ask: is this the best time for Estonia to be joining the euro currency?

WERTH: The answer you'll get from Estonian officials is yes. And the reason is that Estonia is already sort of a de facto member. The country has been pegging its currency to the euro for about a decade now. The analogy I heard is that Estonia has already traveled 90 percent of the way, so jumping on board tonight will just be like finishing the journey.

HOBSON: So jumping on board -- I mean are they jumping on board a sinking ship though?

WERTH: That could be. We often hear talk that the euro zone could split into two parts. I put this to several economists in Estonia, and the answer I often got was: if the euro zone is a sinking ship, and there are two lifeboats then we want to make sure we get on the one with Germany while we still can. Maris Lauri is with Swedbank in Tallinn.

MARIS LAURI: Even if this will happen, that euro zone will break up, it will be very important to Estonia to be very close to Germany, to get the benefits of stronger union as long as it is possible.

That's the long term. But tonight most Estonians will just be getting used to life with the euro. When they go to the ATM, it will spit out euros instead of the old Estonian kroons they're used to. And when they pay for something in the old kroons, say at a store, the cashier will hand them back euros in change.

HOBSON: Sounds kind of complicated for New Years Eve. But we'll be watching -- Christopher Werth in London. Thanks so much and Happy New Year.

WERTH: Happy New Year.

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