Croatia to Enter Euro Exchange Rate Mechanism II by 2020

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ZAGREB, October 29, 2018 – During the dialogue with citizens by European Commission Vice President for the Euro and Social Dialogue Valdis Dombrovskis on Monday, Finance Minister Zdravko Marić underscored that Croatia could join the Exchange Rate Mechanism (ERMII) by 2020 and that, for the improvement of the living standards of people at risk of poverty, it would be necessary to boost economic growth and employment by concerted action.

Asked whether a referendum would be held regarding the introduction of the euro in Croatia and when it could be introduced, Marić underscored that the government’s idea and wish is “by 2020 to join the Exchange Rate Mechanism II,” which would last for a minimum of two years plus one more for adjustment and meeting the strictest criteria such as those relating to interest rates, exchange rates, prices, deficit and public debt. He also said that the referendum for accession to the EU was compulsory and that joining the EU comprehended introducing the euro.

I think that there won’t be any need for a referendum and that is why in that context we have launched this debate, publicly, to argument the introduction of the euro so as to explain it as much as possible to all citizens, experts and broader public, Marić said.

During question time at the Faculty of Economics, one student claimed that the “European Union is turning a blind eye to economic crime,” noting that the grey economy accounts for 30% of domestic GDP, placing Croatia immediately after Bulgaria and called out Minister Marić that by introducing the euro he wanted to pass the buck in that regard onto the European Union.

Marić responded “that is not passing the buck,” and added that every country that has an above-average share of services (in GDP), not just tourism but other activities too, have a portion of grey economy. He said that not one EU Finance Council meeting went by without debating so-called circular fraud, aggressive tax planning and everything else “which is not a problem that is particular to Croatia but in many other countries too.”

Responding to a question about the current social state of affairs in the EU, Dombrovskis said that the European economies have shown a growth for the past six years.

As far as the social picture is concerned, he underscored the level of employment. Europe currently has the highest historical level of employment – that means more people have a job in the EU than ever before. At the same time, when discussing the social picture it is necessary to be aware that the consequences of the crisis can still be felt, including a growing income gap, he said.

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