Ladies and Gentlemen,

An almost octogenarian State of Estonia can pride itself today on the fact that its national currency has stayed stable and reliable for ... how many years already? - Five!? The paradox will vanish if we recall the oppressions our country has had to suffer through the occupations of World War II. And if we recall that Estonian national capital was definitely one of the forces beside our national intelligentsia to best discern the emerging slim chances of creating our own state in 1918 and restoring it in 1991 and to grab them without hesitation, the relationship between the Estonian money and the history of Estonia's independence becomes clear. The regulation of the money system and the introduction of our own currency have been a natural consolidating sequel to the attainment of sovereignty, aimed at gaining economic independence as well. Thus the history of the Estonian money has been closely related to the history of Estonian independence.

However, what is the point in devoting so much attention to a fifth birthday? To many a distant alien and uninitiated person five years in the history of a national currency may seem a very short span. Matters will look different if the events are placed in a relevant background system.

Let us recall the years 1991-1992. The intoxication from the recapture of Estonia's sovereignty was suffocating from a coupon economy and from meandering butter queues. Although independent de jure, de facto Estonia depended on the Russian mint, whose emitted roubles were bogging us down in hyperinflation. Although an unstable situation was characteristic of all transition states, the newly independent Baltic states were particularly sensitive to outward factors since their economies were almost entirely linked to the former countries of the USSR and since they continued to belong in the rouble zone. A remedy had to be found which would have a balancing effect on the economy and create a stability so essential for further development.

In June 1992 Estonia was one of the first countries in Eastern and Central Europe to carry out a monetary reform, which differed from many other similar reforms for its radicalism. Exit from the rouble zone and the application of the principles of the Currency Committee gave a significant impetus to the consolidation of Estonia's economic independence. In August 1991 Estonia's political independence was attained; June 1992 marked the onset of movement towards economic independence. The subsequent daring reforms have only reinforced it.

Within only just a year after the monetary reform the inflation rate dropped from 953% to 36%. There was forcible re-orientation of the economy from the east to the west. To date we have reached a state of affairs where trade with European Union member countries accounts for 60% of Estonian foreign trade. Estonia is among the most successful Central and East European countries for per capita foreign investment. A conservative fiscal policy has helped to balance the country's budget and to keep Estonia's foreign debt low. For a number of indices Estonia already meets the requirements of the EMU.

Looking backwards now we can say that our choices have been justified. The introduction of the Estonian kroon and the implementation of its supporting system of the Currency Committee, which constituted a central reform and which constitute the main topic of today's conference, formed the foundation on which everything else has been based. Speaking of the kroon today we speak of a symbol representing Estonia's progress.

We know that not all reform states have done so well as Estonia in reforming their economies and especially in carrying through their monetary reforms. The introduction of the Estonian kroon was collective work. It is appropriate today to thank both those who directly assisted in the birth of the kroon - many of them being also present in this hall today - and all the Estonian people for their patience and understanding while for many the monetary reform was at the same time a severe tribulation. Looking backwards, we have to say we hardly had many other options.

Estonia has spelled out her priorities. First and foremost it is economic integration with the European Union. It is just thanks to our successful economic reform that we can be optimistic about finding ourselves in the first round of the EU enlargement if only objective assessment criteria are applied. In this connection I would like to return to the Estonian kroon and remind you that our kroon is not a historical symbol void of contemporary value - no: much more than that, it is our real effective financial instrument, which supports us on our way to Europe.

Have a successful conference!

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