Oil prices threaten Baltic eurozone ambitions

High oil prices could hit plans for the expansion of the 12-member eurozone next year, as Estonia and Lithuania battle to keep inflation below the club’s limit of about 3 per cent.

Only Slovenia, the former Yugoslav republic, looks certain to join the single currency area on its target date of January 1 2007, according to EU officials, while question marks hang over the two Baltic candidates.

“We feel that it’s a shame that just when we need to qualify for euro entry, the world oil prices go up,” said Kylike Sillaste, adviser to the prime minister. However she said Estonia had a long-term supply contract with Gazprom and did not expect price changes for gas imported from Russia.

Financial Times