Saturday, 26 November 2022

Austria Won't Block Croatian Schengen Path, But Germany Might

November the 26th, 2022 - Despite claims to the opposite, Austria has recently cleared up the fact that it will not be standing in the way of the planned Croatian Schengen entry at the beginning of 2023, citing complaints with Schengen expansion in general, and not merely about Croatian accession. Germany, however, might throw a spanner in the works yet.

As Ines Sabalic/Poslovni Dnevnik writes, Austria will not prevent Croatian Schengen membership from going ahead, and neither will Sweden, which had also threatened to do so in the past. But Germany could.

There is a high chance that Croatian Schengen entry will go ahead without much fuss, but a last-minute issue is also possible. At the moment, in all the Schengen capitals that are being asked about Schengen, Zagreb, the responses are positive to Croatian entry. However, it's not over yet, because there can be unpleasant surprises where you least expect it, and some last minute problems, so we've heard, do indeed exist.

Schengen is much more than free border crossings and data exchanges, which, along with Eurozone entry in January 2023, is a question of confirming political identity for Croatia. For large member states and countries close to the center of the EU, identity is self-evident. For the Scandinavians, the EU is a rational choice. The British refused it for a multitude of reasons. It is crucial for Croatia and this confirmation would have a beneficial effect.

Over in Germany, a key part of the ruling coalition is the Greens (Bündnis 90/Die Grunen), and their reaction to Croatian Schengen plans is unpredictable. If they decide to make a fuss at the last minute, Scholz's government and Interior Minister Nancy Faeser will not be able to support Croatia's entry. It's more than likely that everything will be fine, but it ain't over until the fat lady sings, as they say in Britain.

Previous negative indications from some countries to Croatian Schengen entry were motivated by internal political demands and disagreements. An example of that can be found in Sweden, where two completely different parties, the Swedish Democrats, and the Social Democrats, demanded all three countries (Croatia, Bulgaria and Romania) be stopped form enteting. The far-right Sweden Democrats are against it, and the Social Democrats ask "What benefit does Sweden have from the entry of Croatia into Schengen?". At the same time, Ylva Johansson, Commissioner of the European Commission (EC) for Internal Affairs, whose responsibility includes Schengen, is a Swedish socialist herself.

As things stand now, the problem with the Swedes has been solved, that is, Sweden confirmed once again in Brussels that it will give passage to Croatian Schengen entry without causing any issues along the way.

The same is true in nearby Austria, despite recent issues the media has cited. There, the party in power, the OVP, is nervous because the public's trust in the party's good handling of the migrant issue has long-since dried up, and nostalgia has grown (according to polls reported by Der Standard) for Sebastian Kurtz, who advocated a hard-line migration policy for Austria. The threats against Croatian Schengen entry were aimed at increasing and consolidating support among VP voters, but the main issue is, as stated, Schengen itself, and not merely Croatia entering it.

The main reason for the increased number of migrants in Austria is that people simply come, pass through Greece, Bulgaria, Romania, Hungary and Croatia, and are directed to the northwest, towards "real" Europe. Many member states, such as Austria in this case, probably imagine Croatia as a kind of European Union military frontier, a border area that was once defined by Maria Theresa as a defense zone against the expansion of Turkey, and which later grew into a Habsburg war province.

Quite simply, the Austrians want fewer migrants or at least effective control of who enters and when. Their issue is with Schengen simply ''not working'', to quote one Austrian minister. At the same time, in these same member states, coalition or opposition parties on the left demand respect for the human rights of migrants.

The parties of the left, and especially the Greens, also understand the border areas in a better way, and what they demand is an individualised approach to migrants, so that one of the fundamental values ​​on which civilisation rests, namely respect for human rights, is not compromised. Recently, the Greens in the European Parliament also voted in favour of admitting Croatia to Schengen, because the argument of the right to enter, and for equal rights for all, prevailed in the end.

At the same time, many MEPs, and especially the German Greens, continue to show great dissatisfaction with the violation of human rights at the borders. There, the petition "Europe, stop paying for pushback" was recently launched, in which, along with Croatia, Greece, Italy, Hungary, Lithuania, Malta, Poland, Spain and Slovenia are all criticised for being verbally and physically violent towards potential asylum seekers, and resorting to violent measures of rejection (pushbacks).

The Greens are a complex party, and the only one among the major parties in all of the European Union that has a deeply idealistic vision, which is largely channeled into mainstream politics, and a smaller but highly visible part into activist actions. 

The lens through which these two opposing political formations see the incidents at the European Union's external borders with migrants is different. The only thing in common is that both are dissatisfied with the European Commission. Some, like the OVP, and we've seen this from the remarks made by the Austrian Minister of the Interior Karner, criticise the too lenient approach of the Commission regarding the asylum policy and Schengen, while the German Greens criticize Frontex, the European agency that is at the external borders and helps the national border police in their work.

These members are dissatisfied, they want something from Greece, which they constantly criticise, and also from Croatia, which would like to enter Schengen, but what do they want exactly? What kind of border area should Croatia be? Should there be a military landscape at all? Nobody seems to have much of an idea. However, it will be necessary to have a long, hard think about what the Croatian borders, the EU's external ones, will look like following Schengen entry in 2023.

For more, make sure to keep up with our news and politics sections.

Friday, 25 November 2022

Croatian Modepack Company to Increase Revenue with Eurozone Accession

November the 25th, 2022 - The Croatian Modepack company is set to cash in and increase its income on the mere change of the country's currency from the kuna to the euro as of January 2023.

As Darko Bicak/Poslovni Dnevnik writes, with an investment of 63 million kuna in their new plant in Velika Gorica near Zagreb, the Croatian Modepack company has recently rounded off its strategic efforts to double its capacity conceived in the wake of the coronavirus pandemic, when the demand for their range of courier and security packaging on the global market exploded.

As explained by Jure Siric, director and owner of the Croatian Modepack company, the projections were that the investment, which was supported by the European Union (EU) from its funds in the amount of 7.5 million kuna, would amount to 50 million kuna. However, the drastic increase in the prices of raw materials and goods, as well as rising labour force costs, raised the total investment amount by about 15 percent.

"Given the fact that it's a large space, a building of 5,500 square metres and a plot of land spanning 32,000 square metres, further expansion is also possible. 2/3 of the total investment has already been invested in equipping production. This enabled us to increase our production capacity by approximately 100%, which in practice would mean 300 million pieces produced per year. Further planned investments, such as that intended for solar panels, will make us completely self-sufficient in terms of electricity, which is the only energy we use in the production process," Siric revealed.

Although the foreign market is their main focus, this yea,  suddenly there was a great demand for their products right here in Croatia as well. The reason is the introduction of the euro, that is, the withdrawal of kuna from circulation as the nation's currency.

"We knew that this represented a big opportunity for us, that there would be a lot of work, but what happened in the last weeks was far beyond that. We prepared well and consulted all potential clients. We estimated that we could achieve a turnover of around one million euros on this. Interest was weak until October, when everything exploded and everyone needed our safe packaging for money transfers - banks, Fina, shops, etc. We're very flexible and, thanks to this new facility in Velika Gorica, we've started with the production of this assortment in three shifts. Our current estimates are that our planned turnover on packaging for the collection of kuna and the distribution of euros across Croatia will increase from one million to at least two million euros," explained Siric.

The Croatian Modepack company has otherwise recorded double-digit growth since its very foundation, and that trend has only continued this year, when they expect about 75 million kuna in revenue, which is about 30 percent more than the 53 million kuna they earned last year. Their plans for the next three years are even more ambitious, by 2025, the plan is to achieve 150 million kuna (20 million euros) in revenue.

The opening ceremony of their new plant, where eight production lines will be installed for the time being, was an opportunity for the Croatian Modepack company to present its modernised logo adapted to the global market, from which they generate more than 90 percent of their revenue.

"This seemed like an excellent timing for this move. Modepack always strives to be up to date even now, after six years, and we wanted to modernise everything together. Through this process, we were guided by the backbone of our business: the product - people - production - the planet. The goal we set when creating a new brand was to strengthen our position on the market through clear and consistent communication. Amazon, H&M, Vans, Adidas, DHL, DPD, Loomis, numerous European financial institutions as well as the Antwerp Diamond Exchange (AWDC) are just some of the many users of the company's courier and security packaging.

Although we've only been present on the market for six years, Modepack is already one of the global leaders in the production of high-quality packaging for the logistic transport of goods, with an emphasis placed on e-commerce and courier deliveries, as well as security packaging for money and valuables. We export to 32 world markets,'' Siric explained, adding that Modepack was created based on the assessment that e-commerce would become a reality very soon, and this happened much earlier than expected. This was especially pronounced during the coronavirus pandemic, when e-commerce grew at triple-digit rates.

"I'm not a complete stranger within this industry because I come from the Weltplast family company, which has been involved in packaging and recycling since back in 1983, and since 2010, I've been in charge of sales for the EU market. However, it's a large company that generally deals with packaging and all of the raw materials for it, and my desire was to step into something new and a bit different. I don't think I made a mistake in doing so,'' said Siric, whose company occupies an increasingly large part of the global market, and currently their main focus is Scandinavia and France, where they were present at a large specialised fair this week.

For more, make sure to check out our dedicated business section.

Thursday, 6 October 2022

Croatian Euro Coins Available for Purchase as of December 1, 2022

October the 6th, 2022 - Brand new Croatian euro coins will be made available for both people and business entities to purchase as of the 1st of December, 2022 as official Croatian Eurozone accession is set to occur on the 1st of January, 2023.

As Poslovni Dnevnik writes, approximately 420 million Croatian euro coins with national motifs weighing as much as 3.7 tonnes are currently being produced, and they will be offered to all people and business entities from December the 1st, 2022.

The one euro coin features the image of a wood marten, which is an animal similar to a ferret or mink and which is the name of the current Croatian currency (the kuna), the two-euro coin is decorated with a geographical map of the Republic of Croatia, the 50, 20, and 10 euro cent coins feature the image of Nikola Tesla, while the 5, 2, and 1 euro cent coins feature the letters H (for Hrvatska/Croatia) and R (for Republika/Republic) written in Glagolitic script, the oldest known Slavic alphabet, according to a report from Danica.

The Croatian National Bank (CNB) explained that all of the necessary quantities of Croatian euro coins with the aforementioned features will be minted by December the 1st this year. They will be sorted into 1.2 million packages for people to purchase and 200,000 packages for business entities to purchase.

Therefore, from the very frist day of December this year, people will be able to purchase a maximum of two packages containing 33 different Croatian euro coins worth 13.28 euros at the Croatian National Bank, as well as from branches of Fina and Croatian Post (Hrvatska posta). Each package will cost 100 kuna.

For more on Croatia's upcoming accession to the Eurozone, make sure to keep up with our dedicated politics section.

Wednesday, 5 October 2022

Croatia Entering Eurozone in Turbulent Times, What are the Positives?

October the 5th, 2022 - Croatia is entering the Eurozone during particularly difficult and turbulent times, following a global pandemic, and now during the Russia-Ukraine war which has resulted in spiralling inflation and an energy crisis, but what are the positives?

As Poslovni Dnevnik writes, all Croatian kuna that people have at home will have to be exchanged for euros unless they want to keep hold of it for historical, nostalgic purposes (and I'm sure we'll all be keeping a coin or two). It's interesting to note that some of that money will be flowing into the purchase of real estate. Croatia's accession to the Eurozone, according to the Croatian National Bank (CNB), only partially caused huge growth in the property business.

''This boom in the market has been happening for the last few years, we've all been witnessing it, it isn't something that is exclusively related to Croatia joining the Eurozone, it's something that I'd primarily associate with the fact that we have lived for too many years in the zone of zero interest rates,'' said vice-governor Michael Foulend of the Croatian National Bank for HRT.

The double display of prices in both kuna and euros in stores should prevent additional price increases due to the rounding up of prices when Croatia does adopt the euro officially, but inflation is complicating everything.

''Having learned from the experience of other Eurozone countries, we don't expect that there will be more pressure due to the introduction of the euro here. What is inconvenient is that Croatia is in a period of very high inflation, so perhaps it creates the impression that everything is linked to the euro, but that isn't at all the case,'' stressed Zvonimir Savic, special adviser to the Prime Minister on economic issues.

Croatia is entering the Eurozone at a time of great geopolitical crisis, but this country's joining should actually provide many advantages.

''It is to be assumed that entering the Eurozone means greater financial stability, lower interest rates, more favourable conditional borrowing, even during crisis times, and we are and should be aware that this current crisis is geopolitical and has very serious economic implications - then you have an umbrella, some kind of shelter you can count on,'' pointed out Mladen Vedris from Effectus University.

''Within the Eurozone itself, there are some big differences between developed and less developed member states, but also between the political leadership of those countries, so it is particularly important that we navigate these waters skillfully and as strongly as possible in this currently turbulent sea,'' concluded Vedris.

For more, make sure to check out our dedicated politics section.

Wednesday, 14 September 2022

Croatian Banks Send Out Important Info Regarding Euro Introduction

September the 14th, 2022 - Croatian banks have sent out some important information to their customers and clients regarding Croatia's rapidly approaching accession to the Eurozone, which is set to take place on the very first day of 2023.

As Poslovni Dnevnik writes, PBZ sent its clients and customers a notice related to Croatia's upcoming introduction of the euro, in which they specify the essential elements for conversion that will be applied in the conversion of the Croatian kuna to the new single currency of the Eurozone.

"On the day of the introduction of the euro in Croatia, the bank will automatically and without charge carry out the conversion of funds held in Croatian kuna in bank accounts, deposits, loans and other financial statements of value at a fixed conversion rate of one euro = 7.53450 kuna,'' the bank stated.

''The conversion will be carried out by applying the rules for conversion and rounding in accordance with the Law on the Introduction of the Euro as the Official Currency in the Republic of Croatia. In addition to that, according to the principle of continuity of contracts and other legal instruments, the introduction of the euro will not affect the validity of existing contracts on loans, deposits and savings in kuna, etc., meaning that no new contracts need to be concluded. The goal is to carry out the process of introducing the euro and the activities resulting from it in such a way as to ensure the simplest possible treatment for everyone,'' it added.

The period of the obligation to display prices twice (in both Croatian kuna and euros) to consumers began on September the 5th, 2022 and ends twelve months after the introduction of the euro in Croatia.

Of the other Croatian banks which have sent out information on Croatian Eurozone accession to their clients, Zagrebacka banka made similar statements: "On the day of the introduction of the euro as the official currency of Croatia, monetary values ​​expressed in kuna on custodial and brokerage accounts will be converted into euros by applying the rules for conversion and rounding defined by the Law."

Erste Bank also informed its customers about the currency change, according to a report from N1.

For more, make sure to check out our dedicated lifestyle section.

Tuesday, 6 September 2022

Croatian Public Procurement Disputes to be Resolved in Euros in 2023

September the 6th, 2022 - Croatian public procurement issues and disputes will be settled solely in euros when we enter 2023, even if they were initially concluded and contracted in Croatian kuna.

As Poslovni Dnevnik/Marija Brnic writes, on the first day when officially all prices must be expressed in euros in addition to Croatian kuna, many were surprised that in the very recently announced tenders of state and public bodies and institutions, as well as companies, the highest prices willing to be paid for a particular job were not stated in the new currency (euros) at all.

In all contracts on the Electronic Croatian Public Procurement Bulletin, absolutely all the latest offers are displayed exclusively in kuna.

Evaluations carried out in euros

For the private sector, a large fine of up to 100,000 kuna is foreseen for non-compliance with the obligation to properly display prices in both kuna and euros until the end of 2022. What we're seeing with the failure to display prices in both euros and kuna in this sense is (rather surprisingly) nothing to do with the classic sluggishness of Croatian state bureaucracy, but about the use of an opportunity provided by legislation.

The so-called guideline for adjusting Croatian public procurement procedures to the process of replacing the Croatian kuna with the euro, which was prepared in July by the Directorate for Trade and Public Procurement Policy of the Ministry of Economy and Sustainable Development, discussed this in depth. That official document provides details on how the introduction of the euro will be treated in Croatian public procurement procedures, and the starting point is that in public procurement, there is actually no obligation to display prices in both kuna and euros.

This also applies to the preparatory period, which began on July the 15th 2022, as well as the dual pricing circulation period, which began on September the 5th.

Over the past month or two, some legal experts have pointed out to their clients the situation in which they may find themselves when engaged in these procedures, especially in cases where bids are submitted this year and evaluations are due to be performed only in 2023. They advised them to be guided by the official kuna-euro ratio immediately when forming their offers, regardless of whether the tender for a specific job provides for it or not.

As stipulated in the guidelines, in cases where the bids are submitted by December the 31st of this year, and the evaluation is carried out the following year, companies should display their prices in kuna amounts, and the evaluation will be performed in euros. This takes into account the fact that the conversion will take place automatically, at a fixed conversion rate, and in the full amount, not rounded to two decimal places, i.e. in the amount of 7.53450 kuna for one euro.

The guidelines specifically emphasise that the conversion of currencies must not under any circumstances result in an increase in the price or value of goods and services.

Concluded contracts in kuna

In all Croatian public procurement procedures started this year, for which the appeal procedures within the State Commission for the Control of Public Procurement Procedures are set to be resolved after the New Year, and the selected bidder is rejected, the most economically advantageous offer will have to be made solely in euros.

In Croatian public procurement cases initiated this year, but with their bid submission deadlines marked out in 2023, the value of the work will be assessed only in kuna, and the currency will be the euro during the selection process which follows. As far as already concluded contracts are concerned, for all issued purchase orders until the end of this year, invoices will need to be issued in kuna, and after that in euros.

For the executed parts of contracts this year, for which invoices were issued this year, but the company is set to pay it in 2023, they will be carried out in euros. For framework agreements of a longer duration, invoices will be issued in kuna until the end of the year, and thereafter in euros. After the New Year, the only currency for Croatian public procurement procedures of any type will be the euro.

For more, make sure to check out our dedicated business section.

Monday, 29 August 2022

Do Benefits of Croatian Eurozone Accession Outweigh Risks?

August the 29th, 2022 - Croatian Eurozone accession is just around the corner, with all requirements filled, all boxes ticked and the date for entry marked out for the 1st of January, 2023. The public is still divided on the issue, however, so what are some of the advantages and some of the risks and costs of Croatia finally becoming a Eurozone member?

As Poslovni Dnevnik/Marina Marovic writes, here is no alternative to joining the Eurozone for Croatia, as it was part of the referendum the country held on joining the bloc. It did so back in July 2013 and according to experts, all the benefits of Croatian Eurozone accession greatly exceed the potential costs and risks. The Croatian economy has an extremely high degree of euroisation despite still using the kuna as it is tied to the euro, and around 70% of people's savings in Croatia are in the bloc's single currency.

Therefore, kuna devaluation is simply not an option, because the balance effect would be significantly more difficult for the Croatian economy to handle than any gains on the export front.

The biggest advantages of Croatian Eurozone accession

This high rate of Croatian euroisation originates from the time of the former state of Yugoslavia when, due to hyperinflation, the German mark was the currency used to preserve the value of money in the country. This means that regardless of Croatia having its very own currency for less than three decades, this sense of illusory monetary sovereignty will not actually be lost, but the risks involved in everything financial will be greatly reduced.

The absolute biggest advantage of Croatian Eurozone accession on January the 1st, 2023 comes in the form of significantly lower risks and reduced borrowing costs. In addition to the reduction in interest rates, which also maintains a better investment rating, additional borrowing will be made much easier because joining the Eurozone frees up significant funds (about 160 billion kuna in total) currently tied up as minimum foreign currency claims. In addition to that, the country's banks will reduce currency risks and improve overall stability.

In addition to lower interest rates and borrowing costs, Croatia will become more attractive for both investors and tourists (75 percent of them come from the Eurozone, and tourism makes up 20 percent of the nation's economic activity). Additionally, conversion costs for capital transactions such as the sale of property and land, the prices of which have been expressed in euros for a long time now, will be reduced.

Aside from property and other forms of real estate, renting an apartment or buying a car is also usually expressed in euros. By joining the Eurozone, Croatia is merely formalising some of the existing conventions. An additional advantage is that Croatia will be able to count on ECB support in case of any liquidity problems.

Croatian banks will lose out when it comes to conversion fees (about a fifth of their profit, or 1.5 billion kuna), and have additional ATM costs (totalling about 900 million kuna). Exchange offices will largely be out of business. The one-time cost of introducing the euro in Croatia will cost the banks an enormous 100 million kuna, and the cost of the entire adjustment will be paid for by other sectors of the economy, especially retail and telecoms. The average cost for large retail chains will stand at around 30 million euros, for telecoms it is around 20 million euros, and for smaller companies the cost of introducing the euro isn't expected to exceed 10,000 euros.

Uncertain times...

Croatian Eurozone accession is finally occurring in incredibly uncertain times in which it is really difficult to comply with all the requirements for convergence - known as the Maastricht criteria - and yet all the basic indicators were assessed as positive and successful in the latest report and decision back on July the 12th, 2022 The biggest risk is in the galloping rate of inflation.

Back in April 2022, the annual average rate of HICP inflation in Croatia stood at 4.7%, which is below the reference value of 4.9% for the price stability criterion. This value was decisive for the final decision on Eurozone accession in 2023. That said, by the time June rolled around, inflation crossed over into the concerning land of double digits, and the last July value of 12.3% was significantly higher than the average inflation in the Eurozone of 8.6%. The Baltic countries, all of which are now members of the Eurozone, have already registered inflations of more than 20%.

Just joining the euro brings a one-time increase in prices, but on average such an increase amounts to about 0.3% and in the context of current inflation is negligible. The dual display of prices (in both kuna and euros) serves to reduce this risk, and in general, the preparation for the introduction of the euro in Croatia is systematic and thorough, so that these risks are minimal.

In the long term, one would expect convergence of both prices and real income, but in practice there are many other factors that influence whether this actually happens or not. In addition to inflation - foreign exchange markets have experienced tectonic shifts. Croatia is now joining the club of prestigious countries when the euro is at its worst so far - and is at parity with the dollar, which has not happened in the last 20 years. There are several reasons for a strong dollar and a weak euro, but the most important one lies in the fact that the ECB is reluctant to raise interest rates.

The reason for the ECB's lack of reaction is multifaceted, but the fact is that inflation in the EU hasn't been caused by an increase in demand, but rather by an increase in energy and food prices. On the other hand, inflation across the pond in the United States of America is more a consequence of the post-pandemic recovery of the economy than anything else.

For more, make sure to check out our dedicated politics section.

Sunday, 28 August 2022

Croatian Business Entities Intensively Preparing for Eurozone Accession

August the 28th, 2022 - Croatian business entities are now intensively preparing for the country's Eurozone accession, which is now very rapidly approaching. All wages which would have otherwise been paid out in Croatian kuna for the month of December 2022, will be paid out in January 2023 in the new currency - euros.

As Novac/Gordana Galovic/Jutarnji list writes, due to the upcoming introduction of the euro, Croatian business entities are undergoing the demanding process of adjusting their accounting processes, preparing financial statements, paying out wages, reporting taxes and other similar activities in euros. According to data from the Central Bureau of Statistics (CBS), at the end of June 2022, there were 316,052 registered business entities operating in Croatia, of which 56 percent or 176,882 are active.

Most commercial companies, 141,743 of them to be more precise, are active, and 93,393 are trades and the like. The main cost for everyone is the adjustment of IT and accounting systems.

Invoices, wages and payment slips, giro account statements, delivery notes, purchase orders, receipts and other accounting documents on the basis of which business events are entered in the business books must be expressed in the official currency of whatever country they're being carried out in. This means that companies report them in kuna until December the 31st of this year, and after January the 1st, 2023, this will all be done exclusively in euros. Invoices and other accounting documents dated before and on December the 31st, 2022, which companies will issue after January the 1st, 2023, regardless of whether they contain dual amounts in kuna and euro, must be issued in euros.

Croatian business entities will pay all of their outgoings in euros from January the 1st, 2023 onwards. Only during the period of dual circulation, i.e. the first fourteen days of January 2023, can cash kuna be used as legal tender when paying in cash. If something is paid cashless, from January the 1st, 2023, it will be automatically paid in euros because the amounts on deposit, savings and transaction accounts, other payment accounts, payment instruments and other records will be converted from kuna to euros without any charge, with the application of a fixed conversion rate and in accordance with the rules for conversion and rounding.

Companies will need report their profit tax returns, as well as their income tax returns for 2022, but submitted in 2023, in kuna. An exception is for corporate tax payers whose tax period begins before the introduction of the euro and ends after the day of the introduction of the euro, they may submit their corporate tax return for that tax period in euros.

When it comes to companies that are obliged to submit annual financial statements, all those whose business year is equal to the calendar year will need to prepare and submit annual financial statements for 2022 in kuna.

If Croatian business entities receive an invoice after closing the business year for the previous period, it must be in euros. The exception is companies whose business year is different from the calendar year. If the last day of their financial year is after the day of the introduction of the euro, they must state all of their data for the previous business year in their financial statements in euros.

For more, make sure to check out our dedicated lifestyle section.

Wednesday, 3 August 2022

Eurozone Accession: Are Croatian Exchange Offices Doomed to Failure?

August the 3rd, 2022 - Are Croatian exchange offices doomed to failure as Croatian Eurozone accession rapidly approaches, and with the sending of the kuna to the history books set to take place on the 1st of January, 2023?

As Poslovni Dnevnik writes, six hundred kuna for one hundred euros has become a common amount that is obtained when exchanging these currencies during the height of the summer tourist season when you have to convert money at local Croatian exchange offices. That is all due to alter with the arrival of the euro as the country's official currency, and the need for Croatian exchange offices to exist at all will be greatly reduced. Many will close their doors and never open them again, reports HRT.

If you ask the tourists spending time (and money) here in Croatia themselves, everything is very clear and simple, adopting the bloc's single currency is a good move for Croatia. But when it comes to Croatian exchange offices, most of them anyway, they'll have to think about another business model entirely if they want to survive the introduction of the euro from the first of January next year.

"It will be difficult for Croatian exchange offices who will continue to try to work only in the foreign currency exchange business to survive because 80, 90 percent of the turnover takes place around the purchase and sale of euros, and without this turnover it will be difficult for them to survive," warned Sergi Gabor, president of the Association of Croatian Exchangers.

Financial experts have hope and believe that most Croatian exchange offices can be transformed and remain in business when the changeover happens, and that not all of them will be closed due to the demand for digital money, as well as savings and exchanges being done in other currencies.

"Perhaps there will be a continuation of turbulent economic trends at the level of Europe or the world, and in that case it will be possible that in Croatian exchange offices, there will be a tendency for people to be dealing with other currencies such as the Swiss franc or the US dollar,'' believes Hrvoje Japuncic, a financial expert.

For more on Croatian Eurozone accession, make sure to check out our dedicated politics section.

Saturday, 25 June 2022

Pahor Says Blocking Croatia's EU Entry Talks Hardest Decision in His Career

ZAGREB, 25 June 2022 - Slovenia's President Borut Pahor said on Saturday that the most difficult decision which he had made in his political career had been to block Croatia's EU accession negotiations in his capacity as Prime Minister in 2008.

"Blocking Croatia was my most difficult political decision," Pahor told the Slovenian national broadcaster in his interview on the occasion of Slovenia's Statehood Day, observed on 25 June.

In December 2008, the Pahor cabinet vetoed the opening of new policy chapters in Croatia's EU accession negotiations over the border dispute between the two neighbouring countries.

The blockade was lifted only after Croatia's government led by Prime Minister Jadranka Kosor acceded to Slovenia's request to sign an arbitration agreement in late 2009.

Slovenia joined the EU in 2004, and Croatia in mid-2013.

In 2017, Croatia's government and parliament decided on withdrawing from the arbitration procedure after it was compromised by some of the Slovenian protagonists in the process.

Pahor's second presidential terms expires this year.

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