Estonia is to join the euro, making it the seventeenth member state of the single currency area.

EU finance ministers gave the final formal approval to Estonian membership at the ECOFIN council today.

Estonia, which has a population of 1.3m, will adopt the euro as its national currency on 1 January next.

It is the first Baltic state and the first former Soviet republic to join the euro.

Estonia has long had its kroon currency fixed against the euro in a currency board at 15.6466 kroon to €1.

Finance ministers have agreed to keep that exchange rate as the final conversion rate.