The President of the European Central Bank (ECB), Christine Lagarde, welcomed Croatia and praised the commitment of the country, which today became the 20th State of the Euro Zone.
“For us at the ECB, this New Year is particularly important as we welcome a new member to our family: Croatia,” Lagarde said in a video shared on the social platform Twitter.
In her New Year message, the ECB leader stressed that Croatia “has shown incredible commitment every step of the way to join the euro family” and added that the country’s entry into the institution is “a true happiness”.
Lagarde also said that the euro “is a happy family”, but that it has to face problems “from time to time”.
“Now we are fighting against inflation, as we should, and we will continue to do so, but the important thing is that we are the guardians of the euro, which is the currency that unites us, that brings us closer. And as president of the ECB, I can assure you that we will continue to work hard as guardians of the euro to make sure that we have financial and price stability, despite the shocks and difficulties that we face, ”he defended.
Croatia joined the euro today, becoming the 20th country in the European Union (EU) to share the single currency, and becomes part of the free movement Schengen area.
Croatia thus abandoned its national currency, the kuna, and the conversion rate was set at 7.5345 kuna for every euro.
According to the ECB, by the end of 2023, all goods and services must be indicated in kuna and euros. Already for two weeks after the introduction of the euro, both the kuna and the euro (coins and bills) must be accepted as a means of payment.
In 2022, the single currency celebrated 20 years of physical circulation. Since 1999 the euro was already circulating as a currency in the financial markets, but it was not until January 1, 2002 that it reached the pocket of consumers.
The accession to the Euro implies that the Member State of the European Union has to fulfill economic and financial commitments, in the case of low inflation and sound public finances.
Croatia has four million inhabitants and an important tourism sector. In 2021, ‘per capita’ (per inhabitant) Gross Domestic Product (GDP) was 30% below the EU average (in 2021, Portugal was 26% below the EU average).
Despite the benefits that economists foresee in joining the euro, first of all because most foreign trade is with countries in the euro zone, the inhabitants fear that the adoption of the euro will further increase the price of products and services. In November, Croatia’s inflation rate was 13.5%.
Croatia was at war between 1991 and 1995 after the declaration of independence from Yugoslavia. The country applied for EU membership in 2003 and joined on July 1, 2013.
The country also passes from today to integrate the Schengen space of free circulation in the European Union, which allows 420 million people to travel freely between the member countries without going through border controls, this being the eighth extension and the first by the end of 11 years.
Source: Observadora
