Croatia’s government began to think in earnest about joining the eurozone on Thursday (10 May), when it adopted a new strategy that targets switching to the single currency within five to seven years. But opposition forces claim that it is not in Croatia’s best interests.
Prime Minister Andrej Plenković insisted ahead of a cabinet meeting on Thursday that the newest EU member is ready to do all that is needed to change its currency, the kuna, for the euro and that adopting the single currency would only be a boon to the Balkan nation.
A new strategy sets out the costs for switching to the euro and the economic benefits, while also confirming the process that will be followed, although no commitment to the timeframe is officially made.
Plenković, a former MEP, said Croatia has “reached a relatively high level of convergence” with the criteria put in place by the EU that governs adopting the euro.
One of the major challenges is reducing public debt, which has fallen to 78% of GDP and is expected to reach 65% by 2021. The prime minister insisted that this decrease shows that his government is pursuing a “responsible economic policy”.
A national council for adopting the euro will be set up to monitor the key macroeconomic criteria (stable currency, low inflation) before formally starting the process of joining the eurozone.
But not everyone in the Adriatic republic is in favour of the planned change. Ivan Vilibor Sinčić, leader of an increasingly popular populist party, said on Thursday that Plenković’s manoeuvring is just a part of the PM’s plan to eventually try and become the president of the European Commission.
Sinčić, who leads the Živi Zid party (Human Shield), told reporters that ditching the kuna, a symbol of national sovereignty, would only lead to “harmful economic consequences” and that countries on the eurozone’s periphery remain secondary to the core members.
But Economy Minister Martina Dalić said Croatia is a “very good candidate” to join the eurozone, citing the large proportion of savings deposits that are indexed to the single currency. She confirmed that the entire process could take “between five and seven years”.
Croatia joined the EU in 2013 and wants to join both the eurozone and the passport-free Schengen zone.
Although new EU members are expected to eventually adopt the euro, countries like Denmark and the UK have secured specific opt-outs while others like Sweden have been accused of delaying the inevitable. Poland, Hungary and the Czech Republic are not making any plans for a quick accession to the eurozone.