Croatia Has One Year to Meet Requirements for First Step Towards Eurozone

Lauren Simmonds

Much has been made, both in a negative and in a positive sense, of Croatia’s intent to join the Eurozone and introduce the euro as its official currency. While the move has remained unpopular in the eyes of many residents of Croatia, a proportion of whom desire a referendum on the matter, the Croatian Government insists that it’s a done deal and was part of the package Croatia has to agree to in order to join the European Union back in 2013.

Rumour has it that Croatia will not join the Eurozone for a good five years yet, but even so, some members of the government have itchy feet.

As Poslovni Dnevnik writes on the 3rd of July, 2019, Finance Minister Zdravko Marić and Croatian National Bank Governor Boris Vujčić have made it abundantly clear, Croatia has just twelve months to meet the necessary requirements for the country’s entrance into the Eurozone, a concrete move planned within the next few years.

Croatia will have just one year to fulfil its promises given in its pledge for entry into the European Exchange Rate Mechanism, a kind of official ”lobby” on the way to the introduction of the euro as the official currency. As was recently reported, a letter of intent for Croatia’s full entrance into the ERM II was sent by Zdravko Marić and Boris Vujčić will be sent by the end of this week, which the Croatian Government is expected to authorise today.

Just what have the pair promised in their letter? It can be revealed that the letter contains promises to fulfil nineteen measures from six key areas. This was confirmed yesterday by Minister Marić after the session of the National Council for the introduction of the euro.

“In the letter, we have expressed our intention to enter the exchange rate mechanism, but at the same time, we put on paper, as an obligation, what we’ll make sure is done over the next year. These measures concern the strengthening of the capacity and quality of the Central Bureau of Statistics, the prevention of money laundering and the financing of terrorism, the improvement of the business climate, and the improvement of business conditions in Croatia through the further reduction of parafiscal charges and the area of ​​state property,” the Finance Minister stated.

He added that Croatia’s announcement of entry into the European Exchange Rate Mechanism on Monday should be one of the topics of a regular Eurogroup meeting.

“The better we do our homework, the better and more positive the effects will be for all Croatian citizens,” he added.

The finance minister reiterated yesterday that Croatia’s entry into the ERM II is a step towards the introduction of the formerly problematic single currency, and Croatia will remain in that exchange rate mechanism for about two years, during which the Maastricht criteria will be tested.

However, not everything lies in Croatia’s hands, when it comes to the entrance of a country into the ERM II, the existing members of the Eurozone and the European Central Bank have the final decision.

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