Plenković Talks About Main Benefits of Euro Introduction

Lauren Simmonds

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What’s in it for the public, institutions and businesses?

As Poslovni Dnevnik writes on the 18th of October, 2017, Andrej Plenković has spoken today in Parliament about the somewhat sticky issue of the introduction of the euro as Croatia’s main currency, which is expected in around 2022 or 2023.

The prime minister stated that the main benefit would be the removal of currency risks, which loans denominated in euros are all exposed to.

“We’ve begun with the process of preparing for the introduction of the euro as the official currency in Croatia. All the new members of the [European] Union, including Croatia, have agreed to accept the euro when it meets the conditions [necessary for introduction of the currency].

Before becoming a member of the monetary union, the country needs to meet the convergence criteria – price stability, public finance sustainability, which includes two criteria – budget deficit and public debt, exchange rate stability and convergence of long-term interest rates. The structural reforms that we’re conducting contribute to the fulfillment of the aforementioned conditions, which we must implement for ourselves [our own sake] too.

Numerous analyses and comparative experiences show that [both] the public and businesses can expect positive effects from the introduction of the euro. The main benefit would be to remove currency risks, which loans denominated in euros are all exposed to.

Euro-denominated companies who earn revenues in domestic currency will no longer be vulnerable to the depreciation of the exchange rate,” concluded Plenković.

Otherwise, the introduction of the euro as Croatia’s main currency is a bit of a sore point for some, considering the instability we’ve seen in the past and the worries about potential price hikes following the introduction of the currency.


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