EU Commission: Croatia Closer to Euro Area

By 14 March 2019

ZAGREB, March 14, 2019 - The European Commission Vice-President for the Euro and Financial Stability, Valdis Dombrovskis, said in the European Parliament on Wednesday that Croatia's exit from the Excessive Macroeconomic Imbalance procedure was a step towards entry into the euro area.

The EC in February said that Croatia had overcome excessive macroeconomic imbalances, which Dombrovskis recalled at a plenary session of the European Parliament.

Croatia's economy still suffers from macroeconomic imbalances but they are no longer excessive. That's good news, especially in the context of Croatia's preparations for participation in the European Exchange Rate Mechanism and eventually membership in the euro area, Dombrovskis said during a debate on a draft resolution called the European Semester for Economic Policy Coordination: Annual Growth Survey 2019.

The European Semester was launched in 2011 with the aim of harmonising the member states' economic and budget policies. It is part of a wider reform of the economic management of the EU designed to guarantee the stability of the member states' public finances, encourage economic growth and prevent excessive macroeconomic imbalances.

Croatia had been among countries with excessive macroeconomic imbalances since 2014. In its latest report, the EC says that economic development has contributed to the gradual correction of the existing imbalances, notably those related to high levels of public, private and foreign debt. However, in order to maintain that situation, Croatia must continue implementing structural reforms.

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