Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Croatia clears final hurdle to adopting the euro next year

Croatia clears final hurdle to adopting the euro next year

The European Union on Tuesday removed the final obstacles to Croatia adopting the euro, enabling the first expansion of the currency bloc in almost a decade as the exchange rate fell to its weakest level against the dollar in 20 years.
EU finance ministers approved three laws that pave the way for Croatia to become the 20th member of the eurozone on Jan. 1. The last EU country to join the European single-currency area was Lithuania in 2015.

“It’s a big day for Croatia, I dare say historic,” Croatian Finance Minister Zdravko Maric told reporters in Brussels.

Adopting the euro offers economic benefits stemming from deeper financial ties with the currency bloc’s other members and the European Central Bank’s monetary authority.

More tangibly, it means that any of the current eurozone’s 340 million inhabitants who visit Croatia will no longer need to exchange their cash for Croatian kuna.

Euro entry also has political rewards because the shared currency is Europe’s most ambitious project to integrate nations, giving them a place in the EU core. That means a seat at the EU’s top decision-making tables.

Croatia’s accession to the monetary bloc is “an important moment for the European Union” and “confirms that the euro is an attractive, resilient and successful global currency,” EU Commission Executive Vice-President Valdis Dombrovskis said.

However, the euro’s exchange rate very briefly touched $1 for the first time in two decades Tuesday before immediately going back up. A worsening energy crisis in Europe tied to Russia’s war in Ukraine has stoked fears of the economy going into a tailspin.

“The crucial factor for a possible adverse scenario is exactly the supply of energy,” European Economy Commissioner Paolo Gentiloni said. “This risk did not diminish in the weeks that we have behind us. It’s still there and increasing.”

While political elites in Croatia view euro membership as a success, citizens who are already coping with double-digit inflation are concerned that the introduction of the European single currency will cause further price increases.

“They are constantly comforting us on the radio that prices will be fine, but I don’t believe it,” Zagreb resident Visnja Gacic said. “I have a friend in Slovenia, and when they introduced the euro, prices went sky-high.”

In May, inflation in Croatia reached a 14-year high of 10.8%. In the eurozone, it was a record 8.6% in June, with the ECB planning to raise interest rates for the first time in 11 years this month to combat soaring consumer prices.

Created in 1999 among 11 countries including Germany and France, the euro has gone through seven previous enlargements starting with Greece in 2001.

The appeal of euro membership is reflected by the last three expansions, which brought in Baltic states between 2011 and 2015. During that period, the eurozone was scrambling to contain a debt crisis that Greece had triggered and that was threatening to break apart the currency alliance.

A combination of European emergency loans to five financially vulnerable member countries and an ECB pledge to do “whatever it takes” to save the euro enabled the currency bloc to weather the turbulence and emerge stronger.

Joining the euro requires a country to meet a set of economic conditions. These relate to low inflation, sound public finances, a stable exchange rate and limited borrowing costs.

“It’s a wonderful club to be a member of, but it requires commitment, dedication, continued respect of the rules, and I know that we can expect no less from Croatia,” ECB President Christine Lagarde said. “Together we are stronger.”

Croatia is relatively small and poor, so its euro entry will have limited international economic implications. The country has a population of around 4 million and per-capita wealth that, at 13,460 euros ($13,500) last year, was less than half of the euro-area average.

Nonetheless, against the backdrop of the Russian war in Ukraine and Kyiv’s hasty application for EU membership, Croatia’s imminent adoption of the euro sends a potentially significant political signal.

Croatia was itself at war in the early 1990s during the violent breakup of Yugoslavia. The country applied for EU membership in 2003 and joined the bloc in 2013. That was the last time the EU expanded.

“What an amazing journey it was for Croatia,” Gentiloni said. “There is a lot to celebrate.”
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Cardinal Robert Prevost Elected as Pope Leo XIV, Marking a Historic Papacy
India-Pakistan conflict may be first test for Chinese military tech
Bill Gates Announces Plan to Wind Down Philanthropic Foundation and Disperse Wealth
Historic Papal Conclave Set to Commence in Rome
“Trump Supporter” Aims to Bring a MAGA-Style Shift to Romania
Common Sense Returns to Britain's Legal System: UK Supreme Court Declares a Woman Is… a Woman
EU Hits TikTok with €530 Million Fine Over China Data Transfers
Beijing Says U.S. Is ‘Reaching Out’ for Tariff Talks Amid Soaring Trade Tensions
Warren Buffett to Step Down as Berkshire CEO After Nearly 60 Years
Trump Shares AI-Generated Image of Himself as… Pope, Prompting Outrage Reaction
Germany's Alternative für Deutschland (AfD) party has now been officially labeled “right-wing extremist” by the federal office for the so-called “protection of the constitution.”
Amazon Launches Satellite Internet Service Amidst Competition with SpaceX
Transformative Changes in Women's Wrestling: The Rise of WWE Superstars
The Rush to the White Gold: Global Investment Surge in Natural Hydrogen Exploration
This is a day in Spain without electricity and internet
Trump Administration Removes National Security Adviser Mike Waltz Amid Signal Chat Controversy
U.S. Economy Shrink in Trump’s First Quarter as Tariff Policy Raises Questions
U.S. and Ukraine Poised to Sign Strategic Critical Minerals Deal Amid Geopolitical Shifts
Spain Restores Power After Unprecedented Nationwide Blackout
Liverpool Clinches Record-Equalling 20th English League Title Under Arne Slot
How do you fix this culture?
Corrupted from Within: How Deep State Power and Unelected Judges Hijacked Democracy Against the Will of the People
President Trump and Ukrainian President Zelensky just held an impromptu discussion on the sidelines of Pope Francis' funeral in Rome.
World Leaders Gather in Rome for Pope Francis's Funeral
Pope Francis Laid to Rest in Rome as World Leaders Attend Funeral
Not Child’s Play: How Competitive Gaming Became a Global Economic Empire
California Surpasses Japan to Become the World’s Fourth-Largest Economy
Peter Navarro: The Man Behind Trump’s Tariff Madness
Former U.S. Congressman George Santos sentenced to eighty-seven months for wide-ranging fraud
Pope Francis: head of the Catholic church who pushed for social and economic justice
China do not pay these tariffs - you pay it. This is new 145% tax you pay to the US government.
Cultural Battles in the Vatican: The Candidates in the Battle for the Holy See and Pope Francis's Testament
Global Leaders Pay Tribute to Pope Francis Following His Death
Wild Chimpanzees Observed Bonding Over Alcoholic Fruit
Greek Christians Celebrate Easter in Thessaloníki
US Federal Reserve Chair Issues Warning on Tariff Impact
China, China, China!
Pope Francis Makes Brief Appearance at Easter Sunday Mass
Saudi Arabia Offers Max Verstappen Unprecedented Deal to Join Aston Martin
Global Pistachio Shortage Amid Rising Demand for 'Dubai Chocolate'
Trump is assembling a coalition of Western leaders aligned with the MAGA vision, strengthening a unified front for global change
IMF Predicts No Global Recession Amid Trade Tensions
Alphabet Faces Antitrust Setbacks as Federal Judges Rule Against Google
US Billionaires Call for Higher Taxes, but Proposed 'Millionaires Tax' May Not Achieve Desired Outcome
This is Vienna, Austria in 2025.
Designed in US, made in China: Why Apple is stuck in tariff tussle
Boeing Jet Returns to US from China Amid Tariff War
US Sets Deadline for Russia-Ukraine Peace Deal Brokerage
Italy Introduces 'Sex Rooms' in Prisons for Inmates
Italian Prime Minister Giorgia Meloni Meets with Donald Trump to Discuss EU-US Trade Tensions
×