Wednesday, 15 May 2019

Entering Euro Area Is in Croatia's Interest, Says Prime Minister

ZAGREB, May 15, 2019 - Prime Minister Andrej Plenković said on Tuesday that entering euro area was a goal that should be achieved as it was in Croatia's interest, i.e. good for its economy, financial system and international position, and so that Croatia could be a successful European Union member.

He was speaking ahead of the presentation of certificates to participants in a Columbia University two-day seminar on Croatia's access to the euro area that was held at the State School for Public Administration on Monday and today. The participants were 28 state officials and civil servants, members of a task force for the introduction of the euro as Croatia's official currency.

Plenković said Croatia's access to the euro area was one of the main political, economic and financial topics for the next five years. He recalled the government and central bank's strategy for the introduction of the euro, saying that for more than 18 months now its aim had been to raise public awareness of Croatia's deeper integration into the euro area.

"Croatia is in fact already integrated into the euro area," Plenković said, as the area's member states are its main trade partners, 77% of Croatian citizens' savings and 54% of loans are in euros, as is 70% of the tourism revenue, 60% of bed nights is generated by citizens from the euro area, 66% of foreign tourists' spending is in euros, as is 75% of Croatia's foreign debt.

"That means we are de facto there," he said, adding that the strategy envisaged first participating in the European Exchange Rate Mechanism II, on which all departments are working.

Plenković went on to say that the seminar was the second of its kind for civil servants after the first one in January, organised in cooperation with Harvard University. He said this government initiative would enable those tasked with key reforms to carry them out in the best way possible, using the experience of other countries.

Finance Minister Zdravko Marić said joining the euro area was one of Croatia's main remaining goals.

Croatia is at a special stage of its development and once it introduces the euro and carries out the necessary reforms, it will have incredible potential, which is also reflected in its educated population and geographical position, said Columbia professor Jan Svejnar, one of the speakers at the seminar.

Other speakers included former Slovakian finance minister Ivan Miklos and former Greek economy and finance minister Nicos Christodoulakis.

More news about the introduction of euro can be found in the Business section.

Tuesday, 30 April 2019

Croatian National Bank Promotes Adoption of Euro

ZAGREB, April 30, 2019 - Fifty-two percent of Croatian citizens support adoption of the euro, 40 percent are against and eight percent are undecided, Croatian National Bank (HNB) governor Boris Vujčić said in Zagreb on Tuesday, citing the results of the latest survey conducted by the central bank every six months.

Vujčić was speaking at a panel entitled "When will Croatia adopt the euro?" Citing the advantages of a switch from the national currency the kuna to the European Union's single currency, he said: "The adoption of the euro would reduce investment insecurity, higher interest rates and high costs."

Vujčić also noted that most Croatian citizens hold their savings denominated in euros, and since most of the loans are also tied to the single currency, its adoption by Croatia would reduce the exchange rate risk.

Those opposed to adopting the euro cited a fear of sharp price increases as their main concern, which Vujčić described as unfounded. "That's a myth and it did not happen in any of the countries that have adopted the euro," he said, adding that there would always be inflation but that it should not be blamed on the adoption of the new currency.

Energy and Environment Minister Tomislav Ćorić said that Croatian citizens and businesses were "still not knowledgeable enough about the effects of euro adoption, both positive and negative ones."

Vujčić would not say when Croatia could be expected to be admitted to the Exchange Rate Mechanism (ERM II), as a step preceding accession to the euro area. He, however, said that talks were under way with the European Commission and the European Central Bank about the content of a letter which he and Finance Minister Zdravko Marić would have to send in when applying for ERM II membership.

After joining ERM II, Croatia will have two years to meet the euro area membership criteria and then wait for a positive response from the European Commission. "Even if all that goes smoothly, it won't happen before 2023," Vujčić said.

More news about potential introduction of the euro can be found in the Business section.

Tuesday, 5 February 2019

President of Greece Visits Croatia, Voices His Country's Support

ZAGREB, February 5, 2019 - Greece will always be on Croatia's side, as it showed during Croatia's accession to the European Union and to NATO, and it will show its support for Croatia's entry into the Schengen and euro zones too, the President of Greece, Prokopis Pavlopoulos, said on Tuesday after meeting in Zagreb with his Croatian counterpart President Kolinda Grabar-Kitarović.

Croatia needs the support of all EU member states for its accession to both zones. Slovenia's officials have hinted that Ljubljana might block Croatia's entry to Schengen due to the unresolved border dispute.

President Grabar-Kitarović said that "Croatia is investing a lot of effort to protect the EU's external borders and, once it joins the Schengen Area, it will do that even more effectively and will significantly contribute to the EU's overall security."

She added that Zagreb appreciates Greece's role in managing the migrant crisis as the first guard of the European borders.

"The Western Balkan route is still closed, but we call for constant caution because of the migrant pressure on that route," she warned and underscored that it was necessary to work on resolving the fundamental causes of migrations.

President Pavlopoulos hopes that 2020 will be important for Croatia's accession to the euro zone, as Croatia will chair the European Union in the first half of the year. Croatian Prime Minister Andrej Plenković has on several occasions announced that year as the year to introduce the euro in Croatia which is a legal obligation for all EU member states, with the exception of Denmark and Great Britain.

"We are here to help governments in our countries that will decide on that. We advocate that our countries cooperate better at the economic and other levels," Pavlopoulos said. In Greece, the president's role is ceremonial.

Speaking about economic cooperation between the two countries, Grabar-Kitarović underscored that it was fairly modest with regard to trade and investments. "Investments are very low. Croatian investments in Greece are almost non-existent and Greece is, unfortunately, not among the 40 top investors in Croatia," she said.

Croatia's most exported commodity to Greece is sugar, iron and steel products, textile products, fertilisers and medicines, while Greece's exports to Croatia include citrus fruits, textile products and aluminium products.

Grabar-Kitarović sees potential for further cooperation in strengthening ties in tourism, maritime and land transport, establishing direct flights between Croatian and Greek cities, and many other areas.

She recalled that Croatia is a signatory to the memorandum of understanding with Albania and Montenegro for the construction of the Adriatic-Ionian gas pipeline that will connect to the pipeline currently under construction in Greece.

The two heads of state support the completion of the Adriatic-Ionian transport route which would connect their two seas and Croatian and Greek ports.

Pavlopoulos said Athens and Zagreb, "because of the vision of its fathers", had the duty to support the further unification of Europe and, together with Romania and Bulgaria, build the EU's southeast pillar.

He said all neighbouring countries must join the EU because "the bigger it is, the better for it as well as for the whole world," but first they must meet requirements such as the rule of law and the adoption of the acquis.

He also spoke of North Macedonia, the state which, as of January, has a new name after the Greek and Macedonian parliaments adopted a historic agreement to that effect.

"We Greeks are here to help it on the path to NATO and the EU, but also to convince it that, without respecting the law and eradicating any irredentism, it can't make progress on that path," Pavlopoulos said, adding that the same applied to Albania.

He said the EU must be built on the federal principle and that it was a union of people, but with a global role which other world powers should have too.

"There is no other power in the world that can better push for peace, humanism, democracy and the law. We must defend our peoples as well as all of humanity in this delicate period," he said, referring to European elections in May at which populist parties are expected to rise in popularity.

"Skeletons of the past are being awakened. We must take action to resist those threats. Europe was built on the rubble of World War II and we must fight so that something like that doesn't happen ever again," Pavlopoulos said.

He said his next meeting with Grabar-Kitarović would take place in October.

Grabar-Kitarovic spoke of the historical links between the two countries. "The Aegean and the Adriatic Seas have linked us for millennia and traces of ancient Greek culture are visible in Dalmatia, on several Croatian islands, including in the northern Adriatic, where Lošinj has one of the most beautiful and well-preserved Apoxyomenos sculptures."

She said many Croats of Greek descent had left a strong mark in Croatia, including 19th century dramatist Dimitrije Demeter and 20th century composer Boris Papandopulo.

Pavlopoulos is staying in Croatia two days and will also meet with Parliament Speaker Gordan Jandroković and Prime Minister Andrej Plenković.

More news on the relations between Croatia and Greece can be found in the Politics section.

Friday, 16 November 2018

Prime Minister Rejects Possible Referendum on Introduction of Euro

ZAGREB, November 16, 2018 - Prime Minister Andrej Plenković said in Opatija on Thursday that a referendum on the introduction of the euro was held at the same time as the referendum on Croatia's European Union accession, during the vote on the Treaty of Accession "which says Croatia will join the euro area."

"Therefore a referendum was held," he said, responding to questions from the press about a euro referendum.

Asked about the chances of Croatia entering the European Exchange Rate Mechanism II as early as 2020, Plenković said the indicators were good regarding compliance with the Maastricht criteria. He added that Croatia had a euro introduction strategy and that a letter was being drawn up, to be forwarded by the minister of finance and the central bank governor, about the steps Croatia would take to enter the said mechanism, which is a prerequisite for joining the euro area.

Asked about dilemmas as to whether introducing the euro meant giving up a part of one's sovereignty, Plenković said "the European Union is bringing sovereignty together, thereby strengthening all the states within the European project."

"The euro is one of the closer integrations... Our goal is perfectly clear, strategically defined, confirmed at a referendum and adopted both in the accession negotiations and the Treaty of Accession. It is all part of the European project which, since 1990, has been the strategic commitment of all Croatian governments, all parliaments, all leaderships. There's no dilemma here. It is a policy of continuity and something that is in Croatia's interest," said Plenković.

Later in the day, Prime Minister Andrej Plenković held a lecture for law students at the 74th International Council Meeting of the European Law Students' Association taking place in Opatija this week.

Plenković spoke about the current situation in Croatia and its future goals, identifying as his government's priorities entry into the euro area and the Schengen area of passport-free movement.

ELSA brings together 52,000 law students from 44 European countries.

As a student, Plenković was the founder of ELSA Croatia, its president and the president of the ELSA International Board in 1993.

For more on the relations between Croatia and the European Union, click here.