we can point to several positive developments which appear to be related to the broader agenda of reforms and policies, including euro adoption. most notably, the estonian economy has successfully weathered a fragile global economy and come through the uncertainties within the euro area. over the last few years, our export sector has led the economy to a path of relatively rapid and well - balanced growth. that has, in turn, created the scope for a still quite significant contribution from domestic demand to growth. indicators of better balance include a much lower current account deficit, better consistency between productivity and wages and lower private sector indebtedness. these improvements, along with sound fiscal policy, have increased trust in the estonian economy and, furthermore, made it more resilient to economic shocks than before the crisis. turning to some other indicators, the output level in our manufacturing sector already exceeded pre - crisis levels in 2011. our exports are now at record levels. compared to the third quarter of 2009, they have grown by 67 %. investments have also rebounded, becoming the fastest growing component of domestic demand. over the last two years, our gdp has grown robustly and somewhat faster than we had expected, by around 8 % in 2011 and about 3. 2 % last year. this is lower than the rates we would like to see in more normal times, and slower than the rate which latvia achieved last year, but still a very respectable outcome given the state of the world economy. by now, we have recovered to about 95 % of our somewhat unsustainable pre - crisis level. as a result, our unemployment rate has fallen steadily, most recently to 9. 3 %, which is lower than the euro area average. our employment has risen to about the same level as it was in the middle of the boom period. clear positive impacts are also evident in the financial sector. joining the euro area removed any remaining risk of devaluation, working to lower interest premia, which are now near nordic levels. access to eurosystem liquidity support has decreased the risk of sharp interest rate fluctuations and sudden stops in capital inflows. the reduction in costs stemming from the equalized charges for domestic and cross - border settlements has brought measurable savings. homeowners have benefited from the elimination of the financial risks which come from earning income in one currency and repaying their mortgage in another currency. consumers and businesses have benefited from being able to easily compare prices, and from the reduction in currency conversion costs.

as a member of the euro area. starting with the motivating factors, in one sense we do not need a motivating factor because when we all joined the european union in 2004, we made a commitment that the euro would be our currency. thus, the “ if ” question has already technically been answered and it is only a question of timing. for estonia as a small european economy highly dependent on trade, euro area membership was a natural goal stemming from close economic ties and similar cyclical behavior. a common currency with many of our main trading partners would reduce the costs of trading and more importantly deepen the economic integration that can drive all of the productivity improvements that will ultimately lie behind higher living standards. our main trading partners are in europe, so it is not an international issue for us but domestically important if we want to grow. in any case, our strategic choice two decades ago to tie our currency first to the dm, then to the euro, and a clear determination to never change this peg, meant that our macroeconomic environment was already very similar to that of a euro area member, and that the extra step towards full euro area membership would only be logical and natural. let me now turn to the process. when discussing such currency reforms, we often speak in terms of the date on which this takes place, which can leave the impression of a single event which suddenly brings great changes. in fact, the process element is crucial. we have been on a given path for 20 years, and we will be on this path for another few decades. therefore, bis central bankers ’ speeches it is many small steps that contribute and the actual date of conversion is somewhat less of an event. it is important, but especially if you have been tied to the euro for a very long period of time. it is of crucial importance that a country ’ s economic policy mix as a whole is credible and consistent. based on our own experience, we can say that much of the impact was already felt even before formal euro accession in terms of the investment flows and in terms of the restoration of confidence. finally, what have been some of the experience over the last more than two years? the precise impact of the adoption of the euro is very hard to determine as there were so many other things going on, most notably the global financial crisis. future generations of economists, with the benefit of hindsight and data will be better placed than us to make a firm evaluation of costs and benefits. nevertheless,