Millions of holidaymakers from the EU no longer need to exchange money and save themselves exchange rate losses. In addition, there are often hours of waiting at the Slovenian-Croatian border crossings.
Croatia joined the EU in 2013. Before the introduction of the European common currency, it had to meet a number of conditions. The exchange rate is fixed: one euro is equal to 7.5345 kuna. There is a transition period until January 14, during which you can still pay in both currencies. Kuna from the last holiday can be exchanged free of charge at banks in Croatia until the end of 2023 – up to 100 coins and notes per transaction.
Croatia’s entry into the euro stimulates the production of coins in the single currency area. The European Central Bank (ECB) has given the 19 euro countries and Croatia permission to produce coins before 2023 with a total volume of almost 2.6 billion euros. According to these plans, Croatia is planning euro coins with a total size of about 316 million euros – mainly for everyday use.
Lithuania last introduced the euro in 2015, Croatia will be the 20th euro country. Under the EU treaties, all member states except Denmark are required to join the single currency once they meet the requirements. However, several countries are not pursuing this energetically, such as Sweden, Poland and Hungary. The Schengen zone was last expanded in 2011 with the small state of Liechtenstein, which does not belong to the EU.
Tourism in particular has high expectations. The country with the long Adriatic coast and the many picturesque bays and islands thrives on tourism. The statistics show 16 million foreign holidaymakers for the first eleven months of 2022, including more than 3 million Germans and more than a million each from Austria, Slovenia and Poland.
Never before has the introduction of the euro been accompanied by such global economic upheavals as now. The Russian war in Ukraine, higher energy costs and supply problems in the aftermath of the corona pandemic proved to be inflationary factors across Europe. Inflation in Croatia was 13.5 percent in November, slightly above the EU average of 10.1 percent.
Valdis Dombrovskis, Vice-President of the European Commission, estimated the one-off effect of the introduction of the euro at 0.1 to 0.3 percentage point based on previous experience. In the medium term, however, this is offset by lower currency conversion costs and lower interest rates. Inflation is expected to fall to 5.7 percent in 2023.
The Croats, on the other hand, rely on their own life experience and expect retailers and service providers to ’round up’ the conversion where they can. The popularity of the introduction of the euro is therefore limited. According to a survey in April, 55 percent of citizens are in favor of the euro and 42 percent against.
The Croats have been living in a dual currency system for decades. Since millions of them moved to the West – often to Germany – as guest workers of the 1970s and vacationers flocked to the Adriatic Sea, it has been common practice to buy real estate, cars or other expensive goods in Deutsche Marks and then in Euros. ^
The Croatians like to celebrate, but because of the rather cautious acceptance of the introduction of the euro, the government of Prime Minister Andrej Plenkovic is refraining from big parties. Finance Minister Marko Primorac and National Bank Governor Boris Vujcic will withdraw some euros from an ATM in the center of Zagreb in the first minutes of the new year. Otherwise, Croatians celebrate New Year’s Eve like every year.
(SDA)
Source: Blick
I am Amelia James, a passionate journalist with a deep-rooted interest in current affairs. I have more than five years of experience in the media industry, working both as an author and editor for 24 Instant News. My main focus lies in international news, particularly regional conflicts and political issues around the world.
