Croatia enters the euro club. The European Commission has concluded that Croatia is ready to adopt the euro on January 1, 2023, bringing the number of member states in the euro zone to twenty. The kuna, the Croatian national currency, has been part of the exchange rate mechanism since July 10, 2020.
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The Commission has explained in a statement that it has taken into account additional factors relevant to economic integration and convergence, including developments in the balance of payments and the integration of product, labor and financial markets. In this respect, the Commission considers that Croatia fulfills the conditions for the adoption of the euro. Therefore, it has also adopted proposals for a Council Decision and a Council Regulation on the introduction of the euro in Croatia.
The Council will take the final decisions on Croatia's adoption of the euro in the first half of July, after the debates to be taken in the Eurogroup and the European Council, and once the European Parliament and the ECB have delivered their opinions.
Paolo Gentiloni, Commissioner for the Economy, commented that “today marks a historic milestone in Croatia's European journey. Croatia, reflecting the determined efforts made by the Croatian authorities to meet the criteria for entry into the euro area. The Croatian people can now look forward to joining the more than 340 million citizens who already use the euro as their currency, a rock of stability in these turbulent turbulent times. And in the year that we celebrate the 20th anniversary of the birth of the euro as a physical currency, the euro area as a whole can now welcome its 20th member.”
The admission announcement is included in the 2022 convergence report, which assesses the progress that Bulgaria, the Czech Republic, Hungary, Poland, Romania and Sweden have also made to join the euro area. These are the seven non-euro area Member States that have legally committed to adopting the euro.
These Member States have legally committed to adopting the euro at some point (only Denmark has a legal opt-out clause and is therefore not included in this exercise). Although none of these Member States currently meets all the criteria, Bulgaria aspires to join the euro area from 2024.
The President of the European Commission, Ursula von der Leyen, has said that “Croatia has taken a significant step towards adopting the euro, our common currency. Less than a decade after joining the EU, Croatia is now set to join the euro zone from January 1 next. This step will make Croatia's economy stronger, which will benefit its citizens, businesses and society in general. Croatia's adoption of the euro will also make the euro stronger."