Goodbye bears, tuna or corn on the cob... The faces of coins in Croatia will change.
And for good reason: the country will switch to the euro on January 1, 2023. On Wednesday, the European Commission estimated that all the lights were green.
The European Central Bank has also returned positive, and while the EU's 27 finance ministers are due to endorse the decision in early July, no opposition is expected.
"I expect that the procedure will go well and that Croatia can join the euro area as early as next year," said Commission Vice-President Valdis Dombrovskis, who will be in Zagreb on Thursday.
Croatia had expressed its desire to adopt the single currency as soon as it joined the EU in 2013. It is now “ready to join the euro zone on 1 January.
This will strengthen Croatia's economy, benefiting its citizens, businesses and society as a whole,” said Commission President Ursula von der Leyen.
This will “also strengthen the euro,” she said.
Croatian Prime Minister Andrej Plenkovic said he was confident, and said he wanted to "also enter the Schengen area" of free movement in Europe in early 2023.
The Croatian economy is ready
The Mediterranean country has an important tourism sector.
The standard of living there is equivalent to that of Poland and the Baltic States, with wealth creation (GDP per capita) slightly exceeding half the EU average.
The unemployment rate reached 6.1% in April.
The Croatian economy is ready, according to the criteria examined by the Commission and the ECB.
In April, the harmonized inflation rate over twelve months, at 4.7%, was below the fixed threshold of 4.9%.
Finances are sound.
The public deficit reached 2.9% of gross domestic product (GDP) last year, just under the 3% limit.
Debt, at 80% of GDP, certainly exceeds the 60% threshold, but this is the case for most EU countries and its trajectory is clearly downwards.
The country's long-term interest rates are also within the set limits.
Finally, the country joined the European Exchange Rate Mechanism (ERM II) in July 2020 and has remained there without difficulty.
This mechanism sets a variation limit of 15% around the course of the kuna, the Croatian currency, currently established at 7.5345 for one euro.
A final exchange rate will be set in July.
The Danish exception
Despite this, the introduction of a new currency has raised fears in Croatia where only 30% of inhabitants consider the country ready for the euro, according to a study carried out in March and April.
Some 87% of the population believe it will lead to price increases.
“We know that many citizens are worried about price increases resulting from the changeover to the euro, especially in these times of high inflation.
This is why it is essential that the Croatian authorities take measures to reduce the risks linked to prices rounding upwards when converting them, said the Commissioner for the Economy, Paolo Gentiloni.
All EU countries are theoretically committed to joining the euro as soon as they meet the conditions, but no timetable is set.
The only exception, Denmark negotiated an exemption after a referendum in 2000 in which the Danes rejected the euro.
In its report published on Wednesday, the Commission considers that Bulgaria, which hopes to adopt the euro in 2024, does not yet meet the conditions.
Five other countries in the antechamber of the single currency (Hungary, Poland, Czech Republic, Romania, Sweden) are also in this case, but they have no plans to join in the very short term.
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