Christine Lagarde, President of the European Central Bank (ECB), welcomed Croatia and praised the country’s commitment, which has today become the 20th state in the eurozone.
“For us at the ECB, this New Year’s Day is particularly important as we welcome a new member to our family: Croatia”said Lagarde in a video shared on the social platform Twitter.
I am delighted to welcome Croatia as the 20th member of the Eurozone! My compliments to the Croatian central bank @HNB_HR and Governor Boris Vujčić on all the hard work in preparation for the introduction of the euro. It’s a great start to 2023. pic.twitter.com/v6MHSpnJPZ
—Christine Lagarde (@Lagarde) January 1, 2023
In her New Year’s message, the ECB leader stressed that Croatia “has shown incredible commitment every step of the way to join the euro family” and added that it is “true happiness” to have the country join the institution.
Lagarde also said that the euro is “a happy family”, but that it faces problems “from time to time”.
“Now we are fighting inflation, as we should, and we will continue to do so, but what is important is that we are the guardians of the euro, the currency that unites us, that brings us together. And as president of the ECB , I can assure you that, as guardians of the euro, we will continue to work hard to ensure that we have price and financial stability despite the shocks and difficulties we face,” he defended.
Croatia adopted the euro this Sunday, becoming the twentieth European Union (EU) country to share the single currency, becoming part of the Schengen area of free movement.
Croatia thus abandoned its national currency, the kuna, and the exchange rate was set at 7.5345 kuna for every euro.
According to the ECB, all goods and services must be declared in kunas and euros by the end of 2023. Two weeks after the introduction of the euro, both kuna and euros (coins and banknotes) must be accepted as means of payment.
In 2022, the single currency celebrated 20 years of physical circulation. The euro has been circulating as a currency on the financial markets since 1999, but it did not reach consumers’ wallets until 1 January 2002.
Joining the euro implies that the member state of the European Union must meet economic and financial obligations, in the case of low inflation and sound public finances.
Croatia has four million inhabitants and an important tourism sector. In 2021, gross domestic product (GDP) ‘per capita’ (per inhabitant) was 30% below the EU average (in 2021, Portugal was 26% below the EU average).
Despite the benefits that economists see in joining the euro, primarily because most foreign trade takes place with countries in the eurozone, residents fear that the introduction of the euro will further increase the price of products and services. In November, inflation in Croatia 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 1 July 2013.
From today, the country will also join the Schengen Area of Free Movement in the European Union, allowing 420 million people to travel freely between member states without border controls, this is the eighth enlargement and the first after 11 years.
Source: DN
