Estonia to burn old currency for heat

AFP, Tuesday 11 Jan 2011

Estonia, which joined the Euro zone beginning of January, to creatively dispose of kroon by burning it for heat

After switching to the euro on January 1, the Baltic state of Estonia has found a way to dispose of its old currency: burn it to heat homes.

"Estonian kroons that have been collected due to the switch to the euro are first being shredded, then pressed, and after that, used at the Iru Power Plant to heat some districts of Tallinn," Rait Roosve, head of the Estonian central bank's cash and security department, told reporters on Tuesday.

"There are not really many options for what to do with notes once they are no longer valid," he added.

Estonia is the 17th member of the European Union to adopt the euro, the third ex-communist state after Slovenia in 2007 and Slovakia in 2009, and the first from the former Soviet Union.

The Estonian kroon was created in 1992, the year after the nation of 1.3 million won independence from Moscow. Estonia joined the EU in 2004.

The kroon will remain legal tender in parallel with the euro until midnight Friday, but Estonians have been changing their cash fast.

"By 1300 local time (1100 GMT) Monday there were 255 million euros in circulation in Estonia and a slightly lower sum in kroons, worth around 250 million euros," central bank spokesman Viljar Raask told AFP on Tuesday.

By Monday evening, 80 percent of all cash purchases in Estonia were already being made in euros, authorities said.
Kroon coins are meanwhile being bashed out of shape.

The metal is used by the central bank either to strike euros, Estonia's are minted by neighbouring Finland, or being sold to other countries to make their own coins.

Due to the kroon's lower value than the euro, the fixed rate is 15.6466 kroons to one euro, its coins gradually fell from favour over recent years.

Estonia, which is known for its hi-tech sector, is already one of the most cash-free economies in Europe, at the cutting edge of debit card, Internet and mobile phone payments.

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