New country joins the eurozone

European Union finance ministers today gave Croatia the green light to adopt the euro in early 2023, making Croatia the 20th country to join the eurozone.

“I am delighted to congratulate my Croatian colleague Zdravko Marić and all of Croatia for becoming the 20th country to join the Eurozone,” said the Finance Minister of the Czech Republic, which holds the European Union Presidency.

Croatia’s transition from its local currency, the kuna, to the euro takes place from 2023, less than a decade after the country, which became independent from Yugoslavia, joined the European Union.

Following the adoption of the legal acts necessary for this historic step, the ministers set the official price of the euro at 7.53450 Croatian kunas.

Croatia applied for EU membership in 2003 and joined in 2013. This was the last time the EU expanded. Lithuania is the last country in the European Union to join the Eurozone in 2015.

The adoption of the euro in the 27-country European Union brings economic benefits that range from deepening financial relations with other members of the union to the monetary power of the European Central Bank.

The new decision means that none of the current 340 million eurozone residents visiting Croatia will no longer need to exchange their money for Croatian kunas.

The eurozone was created in 1999 with 11 countries led by Germany and France, and the euro has seen seven previous expansions, starting with Greece in 2001.

Accession to the euro requires the fulfillment of a number of economic conditions related to low inflation, sound public finances, exchange rate stability and lower borrowing costs.

Croatia is a relatively small and poor country, so joining the euro would have limited international economic impact. The country has a population of about 4 million and had a per capita GDP of €13,460 ($13,500) last year, less than half the eurozone average.

Source: AFP + AB.

Related Stories

Leave a Reply