EU leaders support Croatia joining the euro in 2023

The Heads of State and of Government of the EU supported this Friday the accession of Croatia to the single currency, after the approval issued by the European Commission this month when considering that meets the criteria for financial stability and compliance with treaties and after receive support from the ministers of economy and finance of the EU and the eurozone.

The European leaders have seconded the recommendation issued by Brussels for Croatia to adopt the single currency next January 1, 2023 although the process will not conclude until the Twenty-seven, after consulting the European Parliament and the European Central Bank, adopt three legislative acts that allow Croatia to join the euro, scheduled for the month of July.

“The euro is the monetary expression of our common destiny and has been part of our European dream”has indicated in a post on Twitter the chairmanCharles Michel, who added congratulations to the Croatian Prime Minister, Andrej Plenkovic.

The euro is the monetary expression of our shared destiny and has been part of our European dream.

Now the dream comes true for Croatia.

congratulations, dear @AndrejPlenkovicace #Croatia is now set to join the euro area. pic.twitter.com/DxrwK7Gosw

— CharlesMichel (@CharlesMichel) June 24, 2022

For its part, Plenkovic has expressed in a post on Twitter that on January 1, 2023 Croatia will achieve a “strategic” objective with its entry into the Eurozone and that the country’s citizens and economy will benefit from it.

In early June, the European Commission indicated that Croatia will be ready to enter the euro in 2023in its Convergence report in which it assesses the progress made by the candidate countries to join the euro, among which are Sweden, Bulgaria, Czech Republic, Hungary, Poland Y Romaniain addition to Croatiathe seven member states legally committed to adopting the single market currency.

Brussels indicated in its evaluation report that the country meets the necessary criteria, including price stabilitywith one of the best references in the EU in terms of average inflation levels of 4.9% in the last twelve months, a budgetary position without excessive deficit, stability in exchange rates and interest rates of around 2.6%in line with those of the euro zone.

Furthermore, to assess the sustainability of Croatia’s adoption of the euro, Criteria such as the balance of payments, the integration of financial and labor markets, labor costs and additional price indices have been taken into account.

The European Commission has pointed out among the main risks for Croatia’s integration into the euro zone, the business ecosystem, with a special focus on corruption and regulatory quality, although it has shown that the country will not experience economic imbalances.

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The report prepared by Brussels has indicated that Croatia’s deficit fell to 2.9% of Gross Domestic Product (GDP), in 2021 and has predicted that will drop to 2.3% of GDP in 2022 and to 1.8% in 2023.

The public debt is “relatively” high, close to 80% of GDP in 2021 although it is expected to decrease. In addition, the study has pointed to a medium-term risk of debt sustainability.