Croatia took over the euro, with the new year entered the club of borderless Europe | European Union news
Croatia has switched to the euro and entered Europe’s passport-free zone – two major milestones for the country since joining the European Union (EU) almost a decade ago.
At midnight on Sunday, the Balkan country said goodbye to its mink and became the 20th member of the eurozone.
It is now the 27th country in the Schengen area, the largest passport-free travel area in the world, which allows more than 400 million people to move freely across its member states.
“This is a time of new beginnings. And there is no place in Europe where this is more true than here in Croatia,” tweeted EU High Representative Ursula von der Leyen when she arrived in Croatia to mark the occasion.
At the border crossing with EU member Slovenia, she met with Croatian Prime Minister Andrej Plenković and Slovenian President Nataša Pirc Musar.
Croatia, a former Yugoslav republic of 3.9 million that fought for independence in the 1990s, joined the EU in 2013.
‘Years of Waiting’
While revelers across Croatia took to the streets to welcome the new year, the country’s interior minister, Davor Božinovič, was at the Bregan border crossing with Slovenia to wish good luck to the last travelers who checked their passports there.
“We opened the door to Europe without borders. This goes beyond the abolition of border controls, it is a definitive confirmation of our European identity,” said Božinovič.
Experts say adopting the euro will help protect Croatia’s economy at a time when inflation is soaring around the world after Russia’s invasion of Ukraine pushed up food and fuel prices.
Stipica Mandić, a 72-year-old professional driver, said that freedom of movement without long waits at border crossings is his personal dream.
“I have spent years of my life waiting at border checkpoints, so I came here tonight to witness this moment, a moment I will not wait for anymore,” he said.
But feelings among Croats are mixed. While welcoming the end of border controls, some fear that the move to the euro will lead to an increase in the cost of living, as companies round up prices when they are converted.
“It will be difficult. The prices, which are already so high, will become even higher,” said Ivana Tončić, a teacher from Zagreb.
An employee of the tourist agency Marko Pavić said that Croatia is joining an “elite club”.
“The euro was already a measure of value – psychologically it’s nothing new – while entering Schengen is fantastic news for tourism,” he told the AFP news agency.
Economic hardships
Experts say that the adoption of the euro will reduce borrowing conditions in the face of economic problems.
The inflation rate in Croatia reached 13.5 percent in November, compared to 10 percent in the euro area.
Analysts point out that eastern EU members with currencies outside the eurozone, such as Poland and Hungary, were even more vulnerable to rising inflation.
French President Emmanuel Macron on Sunday welcomed Croatia’s switch to the euro, describing it as a “stable and solid” currency that has contributed to Europe’s resilience in dealing with the fallout from the war in Ukraine.
Earlier on Sunday, the governor of the Croatian National Bank, Boris Vujčić, symbolically withdrew euros from an ATM in the center of Zagreb.
In recent days, customers have been queuing at banks and ATMs to withdraw cash, fearing payment problems immediately after the transition period.
Croatia’s entry into the border-free Schengen zone is expected to boost the Adriatic country’s key tourism industry, which accounts for 20 percent of its gross domestic product (GDP).
Croatia will continue to implement strict border controls on its eastern border with non-EU neighbors Bosnia and Herzegovina, Montenegro and Serbia.