Croatia is taking its last steps in the EU with an open border and transition to the euro | Croatia
Croatia switched to the euro and entered the European zone without borders – two steps that its prime minister called a “historic moment” for his country, which joined European Union almost ten years ago.
This Balkan country said goodbye to its kuna on Sunday and became the 20th member of the eurozone.
It is also now the 27th country in the Schengen passport-free zone, the largest in the world, which allows more than 400 million people to move freely within its member states.
“It is the season of new beginnings. And there is no place in Europe where this is truer than here Croatia“, tweeted the high representative of the EU, Ursula von der Leyen, who arrived in Croatia to mark the occasion.
First, she met with Prime Minister Andrej Plenković and Slovenian President Nataša Pirc Musar at the border crossing with Slovenia, a member of the EU.
During a joint press conference at the Bregana crossing, Von der Leyen praised “two huge achievements” for the EU’s newest member, who became on the same day.
“So this is truly a day for the history books.”
Plenković reiterated that point, stressing that it was a “historic moment” as the former Yugoslav republic, which fought a war for independence in the 1990s, had achieved what he called its “strategic goals”.
Von der Leyen then headed to Zagreb, where Plenković treated her to coffee on the main square, symbolically paying with the new currency.
Experts say adopting the euro will help protect Croatia’s economy at a time when inflation is rising worldwide after Russia’s invasion of Ukraine sent food and fuel prices soaring.
While Croats welcome the lifting of border controls, some fear that the switch to the euro will lead to higher living costs as businesses round up prices when converting.
“It will be difficult. Prices, which are already high, will become even higher,” said Ivana Tončić, a teacher from Zagreb.
However, the employee of the tourist agency Marko Pavić said that Croatia is entering the “elite club”.
“The euro was already a measure of value – psychologically it’s nothing new – while entering Schengen is fantastic news for tourism.”
The use of the euro is already widespread in Croatia. About 80% of bank deposits are denominated in euros, and Zagreb’s main trade partners are in the eurozone.
Officials defended the decision to join the Eurozone and Schengen, saying that Croatia completes its full integration into the EU. The country of 3.9 million inhabitants joined the EU in 2013.
Experts say the adoption of the euro will reduce borrowing conditions amid economic difficulties. The inflation rate in Croatia reached 13.5 percent in November, compared to 10 percent in the eurozone.
Analysts emphasize that eastern EU members with currencies outside the euro zone, such as Poland or Hungary, were even more sensitive to rising inflation.
French President Emmanuel Macron welcomed Croatia’s switch to the euro, describing it as a “stable and solid” currency that contributed to Europe’s resilience in dealing with the consequences of the war in Ukraine.
Croatia’s entry into the Schengen area is expected to boost the Adriatic country’s key tourism industry, which accounts for 20% of its GDP. Long queues at 73 land border crossings with Slovenia and Hungary will become a thing of the past.
But border checks will end only on March 26 at the airports due to technical problems. Croatia will continue to apply strict border checks on its eastern border with non-EU neighbors Bosnia, Montenegro and Serbia.