Croatia will be ready for Eurozone, said PM Plenković

Croatia will be ready for Eurozone, said PM Plenković

Croatian Prime Minister Andrej Plenković said on Monday he was confident that Croatia would be ready to enter the Eurozone on 1 January 2023.

Speaking at the 11th meeting of the national council for the introduction of the euro as Croatia’s official currency, Plenković said Croatia had the full support of the European Commission and the European Central Bank to join the euro area.

“We approached this process in a very structured way, carefully. We believe we will fulfil in time all the commitments we undertook by entering the Exchange Rate Mechanism.”

He said the government regularly discuss reform implementation in money laundering prevention, the business environment, public administration management, and the justice system, adding that he was confident all the ministries involved would fulfil what had been agreed.

Plenković reiterated that over 60% of Croatia’s export was to EU member states, over 60% of tourists in Croatia came from the Eurozone, over two-thirds of savings and half the loans in Croatia were in euros and that Croatia was already “a highly euroised economy”.

“The experience of the countries which joined the euro area shows that it benefitted both their citizens and economies. Entering the euro area will eliminate the currency risk and exchange costs, reduce interest rates, boost foreign investment, and increase the possibility of financing on the capital market, which we are sure will have an additional effect on our credit rating,” Plenković said.

That will also facilitate exports and tourist arrivals, he added.

By comparing pay and price trends in new member states, one can conclude that gross wages increased considerably in relation to price growth, he said. “Living standards increased considerably after the introduction of the euro.”

Plenković reiterated that Croatia would have €25 billion in EU funds at its disposal in the years ahead.

“We expect an advance of €818 million could arrive in Croatia in the weeks ahead and, with the GDP growth we saw in the second quarter and which, after such a successful tourism season, will certainly be such in the third quarter as well, to embark on strong economic recovery, strengthening the resilience of the Croatian economy, quality of life, and raising the standard of our fellow citizens.”

The European Commission Executive Vice President Valdis Dombrovskis said at the meeting the Croatian government had shown a strong political will and set ambitious goals.

The Commission strongly supports the work and ambitions of the government and other Croatian institutions to join the euro area, which requires meeting all Maastricht criteria, he added.

Your economy is recovering well and it will receive support via the recovery and resilience plan. Croatia is the biggest recipient of EU funds. 11.6% of GDP has been allocated to Croatia in grants, he said.