Is Croatia in the Eurozone?
Croatia will be a member of the euro area from 2023. The euro area includes the European Union (EU) member states that have adopted the euro as their common currency. Croatia joined the EU in 2013, but the euro was introduced later.
What does euro area mean?
The euro area, i.e. the countries of the euro area, are EU member states that have adopted the euro. Being part of the Eurozone means that the country’s economic policy is coordinated as part of the supervision of the European Central Bank (ECB) and the European Commission. This brings several advantages, such as the elimination of exchange rate risks and increased price transparency.
Croatia joining the Eurozone
Croatia joined the euro area on January 1, 2023. This meant that Croatia adopted the euro and gave up its own currency, the kuna. Croatia’s accession to the Eurozone was a long process that required the stabilization of the country’s economy and the fulfillment of several criteria, such as inflation control, public finance balancing and exchange rate stability.
Benefits of Eurozone membership for Croatia
- Elimination of exchange rate risks: Croatian companies and consumers are no longer exposed to exchange rate fluctuations within the euro area.
- Price transparency: Comparing prices with other eurozone countries becomes easier, which can promote competition and consumer interests.
- Lower transaction costs: The introduction of the euro reduces currency exchange costs and facilitates trading within the euro area.
- Economic stability: Eurozone membership can bring economic stability and confidence, which can attract investments.
Challenges and criticism
Although membership of the euro area brings with it many advantages, it also comes with challenges. Croatia must adapt to the economic policy of the Eurozone and adhere to strict economic discipline rules. In addition, the introduction of the euro may cause prices to rise in the short term, which may affect consumers’ purchasing power.
