Euro not at fault, members to blame: Estonian president

(VILNIUS) - The president of eurozone newcomer Estonia condemned the "fiscal irresponsibility" of single currency countries on Wednesday, saying the euro itself was not to blame for their debt crisis.

"The euro is getting a lot of bad press. The euro is not at fault for anything. The euro itself is a rather good currency. It is the fiscal irresponsibility of some members," Toomas Hendrik Ilves said during a visit to fellow Baltic nation Lithuania.

"To think that you can avoid these problems by not being in the eurozone is delusion," Ilves said alongside Lithuanian President Dalia Grybauskaite, whose country aims to adopt the euro in 2014.

Grybauskaite, a former European Union finance commissioner, echoed his comments.

"It is not a eurozone crisis but the result of irresponsible financial and economic policy in certain countries," she told reporters.

Estonia adopted the euro on January 1, becoming the third ex-communist country to do so, after Slovenia in 2007 and Slovakia in 2009.

With 1.3 million people, the former Soviet-ruled republic is one of the eurozone's smallest member states.

It has long been known for holding to fiscal policies set down in the 1992 Maastricht Treaty that created EU economic and monetary union -- repeatedly breached by a swathe of eurozone members.

Ilves said it made no sense to talk of debt-afflicted members leaving the 17-nation eurozone.

"If, say, Greece were to leave the eurozone today, its new currency would devalue so quickly relative to the euro that basically it would have fundamental problems meeting its financial obligations in all fields," he insisted.

"It would no longer be a fiscal problem, it would become an economic problem and would affect all of us," he added.

Estonia had insisted repeatedly that despite the eurozone debt crisis, it made sense to join its main trade partners in the currency bloc.

"The euro has brought more benefits to us in terms of investor confidence and foreign direct investment than I think anyone could have imagined," Ilves said.

In addition, Estonia's kroon, introduced in 1992 to replace the Soviet ruble, was pegged to the deutschemark from the start and then to the euro after the latter's creation.

Ex-Soviet Lithuania's litas is also tied to the euro.

"We are pegged to the euro, so we have the euro de facto," Grybauskaite underlined.

Her nation of three million had hoped to adopt the euro in 2007 but was denied entry as its inflation rate -- one of the eurozone entry tests -- was a hair's breadth over the limit.

Lithuanians note bitterly that few eurozone members obeyed their own rules, and that Greece was found to have provided flawed data to gain entry in 2001.