The European Commission proposed this Wednesday that Croatia adopt the single currency in 2023, after verifying that the country meets the economic and legal criteria to become the 20th member of the eurozone.
The convergence report adopted by Brussels shows that the country is the only one ready to join the euro among the applicants to do so, since Bulgaria, Sweden, Romania, Poland, Hungary and the Czech Republic do not yet meet the requirements.
"It is a historic moment (...). It will mark Croatia's full integration into the European Union less than a decade after its accession and it is a positive development for Croatia itself, because it will bring tangible benefits to the economy and citizens" declared the Vice President of the European Commission Valdis Dombrovskis.
In a meeting with international agencies, Dombrovskis stressed that it is also "a positive sign for the eurozone as a whole", since its enlargement "promotes Europe's global strength".
And he was confident that there will be no obstacles for the rest of the partners to give the green light for Croatia to exchange the kuna for the euro on January 1.
The plan is for the Eurogroup and the Heads of State and Government to give their political approval in June and for the Economy and Finance Ministers of the entire EU (Ecofin) to approve the decision in July after consulting with the European Central Bank and the Eurochamber.
After two years in the prelude to the euro -the so-called ERM II mechanism, which links the exchange rate of the national currency with that of the community-, Croatia meets the criteria that require stability in the exchange rate, the price level and long-term interest rates, as well as having solid public finances.
On this last point, Dombrovskis stressed that, although the European fiscal discipline rules remain suspended after the pandemic, it has been proven that Croatia respects the deficit ceiling of 3% of GDP and that public and private debt "is on a downward trajectory ", as required by these rules.
Brussels also insists that there is now cooperation between the European Central Bank and the euro candidates, whose banks are supervised by Frankfurt in the months before joining the eurozone, which reduces the risk of future problems linked to the banking sector, which in Croatia are also mainly in the hands of German and Italian entities, according to community sources.
With inflation skyrocketing for months across the EU due to rising energy prices and the war in Ukraine, the Commission is also driving away the specter of price increases that have traditionally been associated with the adoption of the euro.
Although this entails an exceptional increase of between 0.1 and 0.3 points in inflation and adaptation costs, "in the medium term it is more than offset by lower financing and foreign exchange costs," said Dombrovskis, who He stressed, however, the need to ensure that companies do not take advantage of the situation to raise prices.
Croatia's is the first expansion of the eurozone since the union of Lithuania in 2015 and, after it, the closest partner to join would be Bulgaria, which is in ERM II and aspires to take the euro in 2024.
However, all EU partners with the exception of Denmark, which negotiated an exception, are called to join the project started in 1999.
