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The Financial Times: Estonia will quicken efforts to join the eurozone to avoid facing the same devaluation pressure as neighbouring Latvia, says Andrus Ansip, prime minister.

"The only way out from these rumours about devaluation is for Estonia to join the eurozone as soon as possible," Mr Ansip said at the end of a visit to Sweden.

Mr Ansip, the only premier of the Baltic states to have remained in power as their boom turned to bust, said Estonia was expected to fulfil the entry criteria to adopt the euro later this year, and could even join the eurozone in mid-2010 if the inflation rate fell further, although January 2011 was still the target date.

Latvia has been buffeted by rumours that it will be forced to devalue its exchange-rate peg, forcing the central bank to spend €237m ($332m, £204m) last week to defend the lat. Riga is rushing to put together further austerity measures that should unlock the next tranche of aid from a €7.5bn stabilisation package led by the International Monetary Fund. Mr Ansip said he did not expect Latvia to devalue, but he insisted that, if it did, Estonia would not be forced to abandon its own currency board.

He pointed out that Latvia represented only 9 per cent of Estonian exports, and that Estonian companies would not face a serious competitive problem because the corporate sector had already weathered substantial currency depreciations in the larger export markets of Sweden and Russia.

Even though Estonia is suffering the same deep downturn as its neighbours - gross domestic product contracted by 15.1 per cent in the first quarter of this year, according to revised figures released yesterday - the government has consistently highlighted its superior economic and fiscal position.

Estonia accumulated a fiscal reserve during the boom years equal to 10 per cent of GDP. It also began budget cuts earlier to stop the deficit overshooting after tighter bank credit caused the economy to go into sharp reverse at the start of last year.

The cabinet is expected to announce further austerity measures next week to keep the deficit below 3 per cent of GDP this year - enabling it to qualify for euro entry - though disagreements over the cuts recently forced the Social Democrats out of the coalition, leaving Mr Ansip without a majority.

The premier insisted it was up to Estonia and other struggling new members of the European Union to solve their own problems by putting their public finances in order. "Investors will not trust a country where the deficit is high," he said. Moreover, "as a bonus", once the budget was stabilised the new members would qualify for eurozone protection.

"We don't want to get some exemptions from the [eurozone entry] rules," he said. "We want to fulfil all the criteria and then join the eurozone as we want to join a strong eurozone. If they start to make some exemptions, it will not be a strong eurozone."