On Wednesday, June 1, the European Commission stated that Croatia had met all conditions for adopting the single currency on January 1, 2023. This will make Croatia the twenty-first member of the Euro zone, seven years after Lithuania's entry.
Although the formal decision will be made by EU finance ministers in July, it is still possible to make an offer. There is no opposition, as the 4 million-strong former Yugoslav Republic meets all technical requirements. On Wednesday, the European Central Bank (ECB), also gave a positive opinion.
"I expect the procedure will go well and Croatia will join the euro zone as soon as next year," stated Valdis Dombrovskis (Commission Vice-President), who will be visiting Zagreb on Thursday.
Croatia expressed its desire for a single currency when it joined the EU in 2013,
Croatia is "ready to join euro zone on January 1st." In a statement, Ursula von der Leyen, President of the Commission, stated that this will "enhance Croatia's economy and benefit its citizens, businesses, and society in general". She stated that it will also "enhance the Euro".
A significant tourism sector is found in the Mediterranean country. Just over half the EU average wealth creation per capita is found in this country, as are the Baltic States and Poland. In April, the unemployment rate was 6.1%. This is in line with European averages.
This is a good sign, as the euro just celebrated its 20th anniversary of being a fiat currency.
Millions of Europeans from twelve countries gave up their francs and deutsche marks on January 1, 2002 to exchange for euro coins or banknotes.
Since then, seven countries have joined them: Slovenia in 2007 and Malta in 2008. Slovakia (2009), Estonia (2011) and Latvia (2014). Finally, Lithuania in 2015. Now there are 345 million people.
The symbol of European unity is the single currency. The EU has committed all its member countries to joining the Union as soon as they fulfill the conditions. However, no timetable has been established. Denmark was the only exception. It negotiated an exemption following a 2000 referendum in which the Danes opposed the euro.
Many countries are worried about the introduction of a new currency. According to a March and April study, only 30% of Croatians believe their country is ready for the euro. It will cause price rises according to 87% of the population.
According to the criteria set by the Commission, the ECB and the Commission, the Croatian economy is ready for the new currency.
The April 12-month harmonized inflation rate of 4.7% was lower than the target level at 4.9%.
The finances are sound. The public deficit was 2.9% of gross domestic products (GDP) in 2013, just below the limit of 3%. At 80% of GDP, the debt is well above the 60% threshold. However, this is true for most EU countries, and the trajectory is clear downwards.
The set limits also apply to the country's long-term rates of interest.
The country finally joined the European Exchange Rate Mechanism II (ERM II), in July 2020. It has remained there with no difficulty. This mechanism establishes a variation limit at 15% for the kuna (the Croatian currency) currently fixed at 7.5345 per one euro. In July, a final exchange rate is expected to be established.
The Commission published a report on Wednesday stating that Bulgaria, which plans to adopt the euro in 2024 and is currently not meeting the requirements. The antechamber of the single currencies also includes five other countries (Hungary Poland Czech Republic, Romania and Sweden), but they do not plan to join the euro in the near future.