Monitoring Desk
ZAGREB: Croatia switched to the euro currency and entered Europe’s passport-free zone on Sunday, two big milestones for the country after enrolling in the European Union (EU) nearly a decade ago.
The Balkan nation bid farewell to its Kuna currency at midnight and became the twentieth member of the Eurozone.
Croatia is now the 27th country in the passport-free Schengen zone, the largest in the world, which enables over 400 million people to move freely in the zone.
Ursula von der Leyen, EU Chief, termed it the season of new beginnings. She said that there was no place in the continent where this is more true than here in Croatia, AFP reported on Sunday.
She met Croatia’s Prime Minister Andrej Plenkovic and Slovenia’s President Natasa Pirc Musar at a border crossing point with EU member Slovenia, and then went to Zagreb.
“Adoption of euro to assist Croatia’s economy”
Economists say the adoption of the euro will assist shield the Croatian economy at a time when inflation was soaring worldwide after Russia’s aggression against Ukraine sent fuel and food prices through the roof.
But Croatians were not totally agreed and they had mixed feelings.
While they hailed the end of border checks and controls, some fear the euro switch will lead to inflation because business increase prices when they convert them.
A Zagreb-based teacher Ivana Toncic said that it could cause difficulties and prices that are already high will rise further.
But a tourist agency worker Marko Pavic disagreed with her, saying Croatia was joining an elite club.
He told AFP that the euro was already affecting the currency’s value in the country while entry into Schengen was great news for tourism.
Use of the euro currency is already widespread in the country.
The citizens have long valued their most precious assets such as apartments and cars in euros, showing a lack of confidence in the local currency.
Nearly 80% of bank deposits are denominated in euros and Zagreb’s major trading partners are in the Eurozone.
Croatia joined EU in 2013
The former Yugoslav republic of 3.9 million population, Croatia, fought a war of independence in the 1990s and joined EU in 2013.
Economists say that the adoption of the euro will lower borrowing conditions during the economic tough time.
The inflation rate in the country reached 13.5% in November 2022 compared to 10% in the Eurozone.
Moreover, the country’s entry into the Schengen zone is expected to boost up to the tourism industry, which accounts for 20% of its GDP.
Now, long queues at the seventy-three land border crossings with Hungary and Slovenia will become history. However, border checks will only end on 26 March due to technical problems.
