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Croatia counts down to join the euro area from January 1, 2023

While Croatia has now been given the green light to begin preparing to mint euro coins ahead of its entry into the single currency, eurozone bigwigs in Brussels have told the Balkan nation that the ambitious timetable it is the government set itself will not mean corners can be cut.

European Commission Vice-President Valdis Dombrovskis, also responsible for work on deepening Economic and Monetary Union and strengthening the international role of the euro, has made it clear that the Balkan country must meet all the criteria .

“I congratulate the Croatian authorities for their strong political will to introduce the euro as early as 2023. And that despite the obstacles and major setbacks the country has suffered, the European Commission will support Croatia in its efforts to meet this timetable . But it will only be possible to achieve this if Croatia fulfills all the convergence criteria. “

Achieve strict goals

Control inflation, ensure the stability of public finances, peg the existing currency to the euro for two years and achieve strict long-term interest rate targets.

Croatia’s economy is only the 22nd largest of the 27 EU Member States, 55 times smaller than Germany.

But Daniel Gros, director emeritus of the Center for European Policy Studies, a Brussels-based think tank, says it’s more of a political decision than an economic one:

“Economically it means next to nothing because Croatia is just a tiny addition to the eurozone economy. Politically it’s more important because it shows that the euro remains attractive. Countries want to join when they can even if the conditions are now more restrictive, more severe than before. “

Croatia’s dominant economic sector is tourism, and entry into the euro area is extremely beneficial for these countries. A recent study by the Croatian National Bank suggests that support for euro membership among the population rose from 41% to 45% last year. To join the euro, countries must meet four criteria.

Watch the full Euronews report in the player above.


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