Zagreb, Croatia- Croatia has become the 20th country in Europe to adopt the Euro as legal tender since being admitted into the European Union (EU) in 2013.
According to the European Central Bank (ECB), Croatia’s economy has remained sufficiently in sync with the rest of the eurozone, despite its inflation and public debt soaring because of the fallout from the COVID-19 pandemic and Russia’s invasion of Ukraine prompting the Bank to give Croatia the greenlight.
“Today, Croatia has made a significant step towards adopting the Euro, our common currency. This will make Croatia’s economy stronger, bringing benefits to its citizens, businesses and society at large,” said the European Commission president, Ursula von der Leyen.
Croatia would be the first new member of the eurozone since Lithuania in 2015 and would be the poorest country in the bloc, with a Gross Domestic Product (GDP) per capita of just over US$14 000 which is almost two-thirds less than the eurozone average and below the bloc’s poorest economies of Greece and Latvia, which both have a GDP per capita of above US$17 500. However, Croatia’s economy is more dynamic than the overall eurozone.
“Looking ahead, there are concerns about whether inflation convergence is sustainable over the long term in Croatia. In order to prevent the build-up of excessive price pressures and macroeconomic imbalances, the convergence process must be supported by appropriate policies,” read a statement from the ECB.
Nevertheless, the European Parliament, as well as the EU bloc’s 27 member States, still have to approve the Commission’s assessments and a final decision could be taken as early as next month.
If all goes accordingly well, Croatia will adopt the Euro from the start of 2023 replacing the Kuna as its official legal tender.
Several other EU countries such as Bulgaria and Romania, are aiming to adopt the Euro, but they are further behind in the process.
