With nay-sayers among the public all the more vocal and concerns about a possible Greek scenario taking place all the more widespread, some of Croatia’s financial experts answer frequently asked questions…
As Poslovni Dnevnik writes on the 31st of October, 2017, some critics of the idea of Croatia joining the eurozone point out that the introduction of the euro would accelerate the path to the dreaded Greek crisis because adopting the euro as the country’s official currency would mean the state renouncing its monetary sovereignty.
How fast can Croatia meet the criteria for the introduction of the euro as its official currency? What will this mean for people and businesses? Will the move to the euro cause consumer price growth or is that merely a myth peddled by ignorance? Why haven’t countries like the United Kingdom, the Czech Republic and Poland introduced the euro despite meeting the all of the necessary criteria?
Questions on the subject were responded to by Finance Minister Zdravko Marić, Vice Governor of the CNB, Michael Faulend, and Professor at the Zagreb School of Economics, Marijana Ivanov.
Minister Marić said that the introduction of the euro is one of Croatia’s strategic goals, but that it was also ”one of the means by which we should achieve a higher standard of living and greater prosperity for Croatia and its citizens.”
He thinks that the country could become part of the eurozone by the end of the mandate of this government, but he stressed that it doesn’t solely depend on Croatia and what it does or doesn’t do.
As previously stated, some critics point out that the adoption of the euro would pave the way to the tragic Greek scenario we saw several years ago because joining naturally means that the state must renounce its monetary sovereignty. Michael Faulend believes the idea that the Greek scenario was all down to the euro has been grossly misinterpreted, because the unpleasant situation in Greece happened primarily owing to an inadequate economic policy.
“Their wages were not accompanied by productivity, wage growth grew faster than productivity did, and there was a disproportionate decline in competitiveness that has cumulative effect over the years leading to the result [that we witnessed in Greece], and if the country has a prudent economic policy, such a problem wouldn’t happen,”
Professor Ivanov points out that another positive thing that can be expected with the introduction of the euro, is that 20-30 percent of the population with credit would be protected against the currency risks that the Croatian kuna is currently extremely vulnerable to.