ZCZC
BCN-07
CROATIA-EU-EURO-BANKING
Croatia launches bid to join euro waiting room
ZAGREB, July 5, 2019 (BSS/AFP) – Croatia launched Thursday a bid to join
Europe’s Exchange Rate Mechanism II, the two-year waiting room for eurozone
candidates which pegs their currencies to the euro, the national bank said.
Zagreb hopes to join the ERM II mechanism in mid-2020 and could adopt the
euro three years later at the earliest.
A letter of intent to join the mechanism sent to the eurozone countries and
EU institutions, signed by Finance Minister Zdravko Maric and HNB government
Boris Vujcic, was accompanied by a plan for reforms Croatia will undertake
before entering it, a national bank (HNB) statement said.
The application for the mechanism was enabled by “significant improvement
in reducing (the country’s) macroeconomic imbalances”, it said.
“Economic recovery, export growth, fall of unemployment, consistent fiscal
adjustment and strong fall of foreign debt reduced vulnerability of Croatia’s
economy,” it said.
It resulted in Croatia leaving the EU’s Excessive Deficit Procedure in
2017.
In agreement with EU institutions, Croatia committed to reforms in six
areas namely to improve public sector administration as well as reduce
administrative and financial burden on the economy, the statement said.
Croatia joined the European Union in 2013 and its economy remains one of
the bloc’s weakest.
In April the average salary was 6,434 kunas (870 euros, $981) and
unemployment stood at 8.5 percent.
While officials stress the benefits of introducing the euro — about 80
percent of bank deposits are in euros and Croatia main trading partners are
in the eurozone — surveys show that people remain split over the issue with
support for the euro ranging between 39 and 52 percent.
BSS/AFP/HR/0930