elatively
sound fiscal policies, resulting in balanced budgets and low public
debt. In 2007, however, a large current account deficit and rising
inflation put pressure on Estonia's currency, which is pegged to the
euro, highlighting the need for growth in export-generating
industries.

Ethiopia
Ethiopia's poverty-stricken economy is based on
agriculture, accounting for almost half of GDP, 60% of exports, and
80% of total employment. The agricultural sector suffers from
frequent drought and poor cultivation practices. Coffee is critical
to the Ethiopian economy with exports of some $350 million in 2006,
but historically low prices have seen many farmers switching to qat
to supplement income. The war with Eritrea in 1998-2000 and
recurrent drought have buffeted the economy, in particular coffee
production. In November 2001, Ethiopia qualified for debt relief
from the Highly Indebted Poor Countries (HIPC) initiative, and in
December 2005 the IMF voted to forgive Ethiopia's debt to the body.
Under Ethiopia's constitution, the state owns all land and provides
long-term leases to the tenants; the system continues to hamper
growth in the industrial sector as entrepreneurs are unable to use
land as collateral for loans. Drought struck again late in 2002,
leading to a 3.3% decline in GDP in 2003. Normal weather patterns
helped agricultural and GDP growth recover during 2004-07.

European Union
Internally, the EU is attempting to lower trade
barriers, adopt a common currency, and move toward convergence of
living standards. Internationally, the EU aims to bolster Europe's
trade position and its political and economic power. Because of the
great differences in per capita income among member states (from
$7,000 to $69,000) and historic national animosities, the EU faces
difficulties in devising and enforcing common policies. For example,
since 2003 Germany and France have flouted the member states' treaty
obligation to prevent their national budgets from running more than
a 3% deficit. In 2004 and 2007, the EU admitted 10 and two
countries, respectively, that are, in general, less advanced
technologically and economically than the other 15. Eleven
established EU member states introduced the euro as their common
currency on 1 January 1999 (Greece did so two years later), but the
UK, Sweden, and Denmark chose not to participate. Of the 12 most
recent mem