The introduction of the euro as Croatia’s official currency, thus replacing the Croatian kuna, has been the subject of much talk and heated debate. While some are completely for the move for practical reasons, others are sad to see the kuna go, seeing the introduction of the euro as a loss of Croatia’s precious identity, which was so hard-won.
The debate about Croatia’s imminent entry into the formerly highly problematic Eurozone continues to go on, with frightening memories of the Greek crisis still fresh in many a mind. Some are even demanding a referendum on the adoption of the euro, but the truth of the matter is that Croatia had to agree to adopt the euro eventually in order to join the European Union, of which it became a full member back in July 2013. Love it or hate it, it’s happening – but when?
Croatia has officially sent its letter of intent to the appropriate bodies, as well as a list of promises to reform many key areas in the country’s usually draconian national policies. The country’s letter was met with a positive reaciton from the powers that be, and Croatia now has a mere twelve months to implement everything asked of it in order to enter the ERM II, a sort of pre-euro waiting room, in which it will remain for around two years.
As Poslovni Dnevnik writes on the 15th of July, 2019, the aforementioned letter of intent that Croatia sent to Brussels regarding Croatia’s planned introduction of the euro was assessed by Finance Minister Maric as one of the most important moments in Croatia’s recent history. It is possible, as he himself says, that the euro will become Croatia’s official currency at the beginning of 2024, as he said to RTL.
“It’s difficult to say which year it will be, but I’d say that [the above mentioned date] is possible. We’ve taken over the obligations to fulfill some of the [prescribed] measures. We have to do this ourselves to boost economic growth. The year you’ve mentioned is realistic,” the minister confirmed.
He also announced what many, especially those working in tourism, have been wanting – a lower VAT rate from January the 1st, 2020.
“We have pledged to continue reducing the parafiscal charges. One of the relief measures is the lowering of the VAT rate as of January the 1st, 2020. We’re well on track to find space to give a new ”flywheel” to employers to be able to pay their employees higher salaries. When it comes to what shape that will take and which way it will be done, we’ll have to wait a few more weeks. When we do everything, I will first present it all to the President of the Government, the Croatian Government and the parliamentary majority, and then we will go public with it all,” the minister stated.
The final decision when it comes to Croatia’s entry into the Eurozone lies with the Eurozone’s member states, and the European Central Bank.
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