While many wonder whether eurozone will survive, Croatia is preparing plans to join it.
Boris Vujčić, Governor of the Croatian National Bank, spoke in an interview on Sunday about the recently announced plans by the government to introduce euro as currency, reports HRT on January 23, 2017.
Vujčić said that Croatia would replace the kuna with the euro relatively quickly. “However, joining the eurozone is a process. We need to meet the Maastricht criteria. But, we are on the right track”, said Vujčić. “We have to wait to leave the excessive deficit procedure. Only then can we start the procedure for the introduction of the euro. I would not want to speculate when that might happen. I have the support of the prime minister and he shares this opinion. But, this is not a new political decision, because we have decided to enter the eurozone when we decided to join the European Union”, said Vujčić.
Opinions vary as to what will happen with the eurozone. “I do not see how Croatia could lose here. In the next five years, we should know whether the eurozone will survive or not. Everything that Croatia does in these five years will be positive for Croatia, whether we enter the eurozone in the end or not”, he added.
“It is in the economic interest of people of Croatia to adopt the euro. The benefits of that are greater than the things which we will lose. For example, there will be a reduction in the interest rates”, said Vujčić. “It is not difficult, you just have to look at other countries. We will be able to get cheaper loans and we will have more credibility. Politicians will decide whether there should be a referendum on the adoption of the euro, but we certainly need to have a public debate. Possibly even a referendum, but it is not up to me to decide that.”
Speaking of interest rates, Vujčić said that the Croatian National Bank was not determining them. “We cannot order someone to set the interest rates. But, if there are two banks in the market, there is more competition and that is a good thing”, added Vujčić.
Answering a question about salaries at the Croatian National Bank, which are often in the focus of the media, he said that the average salary of a vice-governor was about 30,000 kuna, while he as governor had about 35,000 kuna a month.
He also pointed out that he had looked into data for other national banks in Europe. “I wanted to know how many employees these banks have, what are their costs like and similar issues. According to data, it turned out that Croatia is below average when it comes to costs and the number of employees. I believe that every institution in Croatia should do something like that and see where it stands. It is better to do comparison with smaller countries, due to economies of scale”, said the Governor.
Vujčić said that the banking business was such that the impact of a crisis was not felt immediately. “In the banking industry, we always see results with a delay, but not right away”, he concluded.
