Croatia to Send Letter of Intent for Eurozone Entry Next Week

Total Croatia News

ZAGREB, June 26, 2019 – Next week Croatia will send a letter to Brussels expressing its intent to join the eurozone, Prime Minister Andrej Plenković announced in an interview with Croatian Radio on Wednesday morning.

Plenković had held several meetings on the margins of a recent EU summit as part of the preparation of the Croatian strategy for the adoption of the European single currency, the euro. He met with European Central Bank President Mario Draghi, European Commission Vice-President for the Euro Valdis Dombrovskis, Eurogroup President Mario Centeno and President of the Eurogroup Working Group Hans Vijlbrief.

“All four men are key for the acceptance of our letter. We are taking the first step to become what is called European Exchange Rate Mechanism II. I think we did very good consultations with both the Central Bank and the Commission, specifying several reform areas on which we will be working over the next year,” Plenković said.

He said that the letter of intent would be sent in the middle of next week.

Asked if there was room for further tax cuts, Plenković said that all macroeconomic trends were excellent. “We are dealing with the remaining skeletons from the closet of the Croatian economic transition,” he said, citing problems concerning the Agrokor food conglomerate, the Petrokemija fertiliser manufacturing company and the shipbuilding industry.

The PM recalled that in the last three rounds of tax cuts the tax burden had been reduced by 6.5 billion kuna plus 2 billion kuna in administrative cuts, noting that this reflected on investment and wages. He said that in last December alone 450,000 people had received higher wages, or 1.5 billion kuna in total.

“We will continue down this path. There is a task force, the Finance Ministry is in charge. They are doing analyses and wherever there may be room we will pursue further cuts because we think that is good,” Plenković said.

He said that the fourth round of tax cuts would begin as of January 1, recalling that the general VAT rate would be reduced by one percentage point.

More news about the introduction of Euro can be found in the Business section.


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