The Croatian experience with the euro

Even when setting the strategic goal of joining the Eurozone and the Schengen area, Croatia steadfastly affirmed its path, regardless of the varying internal political situations.

The entire state machine – including the Central Bank, ministries, the Prime Minister, the Foreign Ministry and the country's diplomatic missions - was harnessed in the name of this great goal. A legislative amendment was made, as well as an adequate communication campaign, and the path was successfully completed

from June 2017 to 1 January 2023

when Croatia adopted the euro and also became part of the Schengen area. Meanwhile, in Bulgaria there has been a back and forth on the euro topic – sometimes it is raised, then fades away, only to come to the fore again. Our citizens have started wondering if we really want to enter the Eurozone.

Joining the Eurozone for Croatia was not a question of high mathematics nor rocket science, things were clearly laid out there, a plan was made and there was a will to carry it out. There were also many well-intentioned partners ready to help – e.g. the ECB, other central banks, the European Commission, ministries of finance. Negative factors also appeared as obstacles - for example, temporarily higher inflation, which was, however, a consequence of the pandemic throughout the EU. In general, though

the final result is positive

In Croatia, as in Bulgaria, the decision to adopt the euro stems from the EU Accession Treaty. Up to a point the two countries went at the same pace, we entered ERM II together. However, Bulgaria slowed down whereas Croatia achieved its goal. The fear of the unknown is understandable, in Croatia they were also afraid that they might become impoverished, that part of their savings might "burn". The Deutsche Mark, then the Euro, however had been long used as a second currency and were preferred for real estate and car purchases in the country. Croatia is a tourist country and the large number of tourists there come mostly from the Eurozone. For months, the government warned that measures would be taken to stamp out any thought of speculative malpractices in the wake of the currency change. Large retail chains were obliged to announce their prices in both currencies 3 months before entering the eurozone. On their own initiative, however, the retailers did that half a year before 1 January 2023. The Central Bank of Croatia also had a strong campaign aimed at the public, but also at the employees of the banking system. The latter received

solid technical training

to also ensure a sufficient availability of euro banknotes and coins. As soon as 12 o'clock struck on 1 January 2023, the Croatian ATMs started dispensing euros. The government saved no efforts to inform the public why it was important for the country to become part of the Eurozone and the benefits that would bring. And since Croatia joined the Eurozone and the Schengen area at the same time, it instantly became part of the inner circle of the best-integrated EU countries. Here are some of the benefits that will also apply to Bulgaria: stability and predictability of the economy; stable banking system; no currency conversion fees, which is especially important for the businesses. And all of this has a positive effect on the country's credit rating.

It can easily be checked, and anyone can see that the economic indicators of Croatia are now very good. Economic well-being and

the standard of living is rising

Foreign investment has accelerated its pace.

My recommendations to the Bulgarian authorities are: to have a clearly stated goal that Bulgaria will enter the Eurozone, and that regardless of inner political changes, this will remain the most strategically important goal. State authorities must undertake a targeted campaign and also prompt and effective action to fulfill commitments.

The accession of Bulgaria to the Eurozone and the Schengen area will make us even more integrated into the European family.