The former Yugoslav Republic will thus become the twentieth member of the euro zone, seven years after the entry of Lithuania.
Croatia will abandon its national currency, the Kuna, which will be exchanged at the rate of 7.5345 kuna for 1 euro, the Council announced in a press release.
“I would like to congratulate my counterpart, Zdravko Maric, and Croatia as a whole,” said Czech Finance Minister Zbynek Stanjura, whose country holds the rotating presidency of the Council.
The country, which had expressed its desire to adopt the single currency as soon as it joined the EU in 2013, “has successfully fulfilled all the required economic criteria and will pay in euros from January 1, 2023”, he said. he adds.
The event was marked by a signing ceremony in front of the press in Brussels, in the presence of the President of the European Central Bank (ECB) Christine Lagarde, the Vice-President of the Commission Valdis Dombrovskis and the Commissioner for the Economy Paolo Gentileni.
“It’s a historic day,” said Croatian Finance Minister Zdravko Maric.
The Commission had given the green light to this accession on June 1, considering that the country of 4 million inhabitants fulfilled all the conditions.
The end of the procedure for Croatia’s accession to the single European currency comes at a time when the currency, which has weakened in recent months in the context of the war in Ukraine, has reached parity with the dollar, for the first time since December 2002.
– “The euro as a shield” –
“Our monetary union is a great asset for Europe, a symbol of strength, unity and solidarity”, declared Valdis Dombrovskis, deeming it particularly crucial in the context of the war in Ukraine which “sends shock waves worldwide”.
“United, we are stronger”, commented Christine Lagarde, considering that “the euro acts as a shield” which protects the member countries.
At the start of the year, the single currency celebrated its 20th anniversary as a fiduciary currency.
By 1 January 2002, millions of Europeans in twelve countries had given up their liras, francs, deutsche marks and drachmas for euro coins and banknotes.
They have since been joined by seven other countries: Slovenia in 2007, Cyprus and Malta in 2008, Slovakia (2009), Estonia (2011), Latvia (2014) and finally Lithuania in 2015. The euro zone brings together already 345 million inhabitants, pending Croatia.
All EU countries have theoretically committed to joining the single currency 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.
The introduction of a new currency has raised fears in Croatia where only 30% of residents consider the country ready for the euro, according to a survey conducted in March and April.
The economic criteria examined by the Commission and the ECB have in any case been met.
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 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.
