Euro introduction in Croatia officially signed – Concrete exchange rate fixed

Croatia’s Finance Minister Zdravko Maric and ECB President Christine Lagard

Symbolic delivery of euro coins.

(Photo: AP)

Brussels The introduction of the euro in Croatia was sealed with a ceremony. On Tuesday, Croatian Finance Minister Zdravko Maric signed the documents to become the monetary union’s 20th member. The Balkan state wants to introduce the European common currency on January 1, 2023 – so it still has almost six months for the technical preparations.

The finance ministers of the EU countries had previously approved the necessary legal acts at their meeting in Brussels. The conversion rate of the current national currency has been fixed at 7.5345 kuna to 1 euro, according to a communication from the EU Council. “Congratulations, this is cause for celebration,” said European Central Bank (ECB) President Christine Lagarde.

On January 1, 2023, Croatia will thus become the first country to adopt the common EU currency since 2015. At that time, Lithuania introduced the euro. The euro area currently consists of 19 of the 27 EU member states.

According to the EU treaties, all member states except Denmark are obliged to join the common currency as soon as they meet the requirements. However, several states are not pursuing this vigorously – they include, for example, Sweden, Poland and Hungary.

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The Czech EU Council Presidency announced that it was a sensible political decision. “Croatia meets all the necessary economic criteria.” In the run-up to the formal decision on Tuesday, criteria relating to price and exchange rate stability, sound budgetary management and long-term interest rates, among other things, were checked. The Czech Republic itself has not yet introduced the euro.

Czech finance minister signs documents on introduction of the euro in Croatia

As part of the Czech EU Council Presidency, Zbynek Stanjura signs documents that will enable the introduction of the euro in Croatia. European Central Bank President Christine Lagarde, Croatian Finance Minister Zdravko Maric, European Commission Vice-President Valdis Dombrovskis and EU Commissioner Paolo Gentiloni look at the signature.

(Photo: IMAGO/CTK Photo)

The European Central Bank announced that numerous Croatian financial institutions have been monitored by the ECB since 2020. EU Commission Vice President Valdis Dombrovskis said that a larger euro zone would also have more influence internationally. With the euro it will be easier to invest in Croatia. More jobs in the country and a rising standard of living can be expected.

In Croatia, tourism in particular is looking forward to the introduction of the euro with great expectations. The country with the long Adriatic coast, the many picturesque bays and islands depends heavily on tourism. At the same time, many people fear that the cost of living could rise sharply as a result of the conversion to the European common currency.

Euro rate at par with the dollar for the first time in 20 years

Croatia, with around four million inhabitants, has been a member of the EU since 2013, but has so far kept the kuna as its currency. The country has been independent since 1991. Neighbor Slovenia – also formerly part of Yugoslavia – introduced the euro in 2007.

The euro slipped to par with the dollar for the first time since October 2002 on Tuesday morning. The fear of a recession and the significantly faster rise in interest rates in the USA are currently affecting the common currency.

The motto started in 1999 at a rate of just over $1.17. The previous record low was $0.8225 in October 2000, but the euro then climbed to a record high of 1.6038 by July 2008.

More: “Bring your households in order” – The fear of a new euro crisis is growing.

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