Now is the time to open the door. Croatia is ready for the euro to be adopted in 2023. On Wednesday, the European Commission stated that Croatia meets all requirements to receive the single currency starting next January 1. This will make Croatia the twenty-first member of the Euro zone, seven years after it joined Lithuania.
EU finance ministers will take the formal decision in July. There is no opposition, as the ex-Yugoslav Republic with 4 million residents meets all technical criteria. On Wednesday, the European Central Bank (ECB), also gave a positive opinion. "I expect that this procedure will go smoothly and that Croatia will be able to join the euro area as soon as next year," stated Valdis Dombrovskis (Vice-President of the Commission), who will be visiting Zagreb on Wednesday.
This will help strengthen Croatia's economy
Croatia had previously expressed its desire for the adoption of the single currency when it joined the EU in 2013. Croatia is "ready to join euro zone on January 1st." "This will strengthen Croatia's economic, which will benefit its citizens, businesses, and society as a total," Ursula von der Leyen, President of the Commission, stated in a statement. She stated that this will also "support the euro".
Tourism is a major industry in the Mediterranean country. The average wealth creation per capita in the EU is just half that of the Baltic States and Poland. In April, the unemployment rate was 6.1%. This is in line with European averages.
The euro just celebrated its 20th anniversary of being a fiduciary money. Millions of Europeans from twelve countries gave up their francs and deutsche marks on January 1, 2002 to exchange euro coins and banknotes for euro coins. Seven other countries have joined them: Slovenia, Malta, Cyprus, Malta, Slovakia, Estonia, Latvia, and Lithuania in 2015. Now, 345 million people live in the euro zone.
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 harmonized inflation rate for twelve months was 4.7%. This was lower than the 4.9% threshold. 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 certainly higher than the 60% threshold. However, this is common for EU countries and the trajectory is clearly downwards. The country's long term interest rates are within the limits.
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.