Croatia and the Eurozone: Next Two Years Crucial for Adaptation

Lauren Simmonds

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Unlike the United Kingdom, which used an opt-out, one of Croatia’s obligations upon joining the European Union was the eventual introduction of the euro as the country’s main currency. While many are against the plan, it will go forward regardless. Erste’s main man has warned that Croatia’s time to adapt properly to the imminent change is slowly slipping away, and the cooling of the global economy is expected. How will the relationship between Croatia and the Eurozone progress?

As Tomislav Pili/Poslovni Dnevnik writes on the 13th of December, 2018, even though the banks are expected to experience falling revenue due to the loss of currency trading, Croatia’s eventual entry into the Eurozone is likely to bring a lot of benefits to Croatian society, said Erste Bank’s CEO Christoph Schöfböck on Tuesday. The statement comes among continued mixed feelings from the public on Croatia and the Eurozone.

“The path towards the euro can’t be a purpose for itself [a self-serving purpose], it must have a reason, and that’s the prosperity of society,” Schöfböck stated. Reflecting on developments in the global economy, Erste Bank’s main man stressed that the world economy would “cool down” in two years, so Croatia must use that time for economic adjustment to finally enter into the Eurozone. As for movement on the domestic economic plan, this year Croatia can expect GDP growth between 2.5 and 2.8 percent, according to the director of economic research, Alen Kovač.

“We’re growing at a faster rate than the European Union, but also slower than comparable countries,” he stressed. Concerning the next year, it is estimated that the positive features of the Croatian economy will remain as they are, such as the further growth in the inflow of money from European funds, investment growth and personal consumption. However, in 2019, the risks that come from abroad – the trade war, Brexit and the issue of the Italian deficit – will be more pronounced. Therefore, next year the growth of the Croatian economy will slow down and will reach between 2.5 and 2.6 percent.

In addition to presenting macroeconomic forecasts, Erste Bank also used this opportunity to launch its new payment application, KEKS Pay. The application is the result of the internal startup of the bank and is described as “the first real digital wallet in Croatia”. It serves to transfer money to friends or family’s accounts, regardless of which banks they respectively use, and also allows for the collection of money from within a chat group. It functions as a “financial Whatsapp”, so it’s not necessary to open an account to transfer money, only the recipient’s mobile number is required. Use of the application is completely free, as is initially downloading it.

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Click here for the original article by Tomislav Pili for Poslovni Dnevnik


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