Croatia eyes euro adoption by 2024

Croatia's strategic goal is to fulfil the necessary criteria and adopt the euro by the end of the next government's term in office, PM Andrej Plenkovic said last Tuesday cited by news wires. Earlier this year, Croatia sent a letter of intent to the European Central Bank to join the European Exchange Mechanism (ERM-2), a waiting room for euro adoption.

“Our plan is to join the ERM-2 in the second half of 2020m where we expect to spend two-and-a-half to three years. Then the euro adoption could follow at the beginning of 2023 at the earliest, or at the beginning of 2024,” Plenkovic told an economic conference. He pointed out that among the main benefits for Croatia from the euro adoption would be removal of currency risk, lower borrowing costs and stronger competitiveness of the economy. Most of the savings in the country, around 75% in the last decade, were held in euros, and not in Croatian currency, the kuna,

Croatia is making effort to keep its budgetary balance under control and to reduce the public debt towards 60% of gross domestic product in the next few years, which are among the key criteria to join the euro. For next year, the government proposed a budget with a general budget surplus of 0.2% of GDP, rising to a surplus of 0.8% in 2022. Public debt is projected to fall from 71.3% of GDP at the end of this year to 61.6% at the end of 2022.

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