Sunday, 04 December 2022
Englishman in Dubrovnik Englishman in Dubrovnik

Even though the Euro isn’t the official currency of Croatia it really has been for years

Written by  Mar 27, 2022

“Without a doubt the introduction of the Euro will be a huge boost for tourism. The problem that we have with the Kuna now is that tourists just don’t know what to do with them when they go home,” said one of the leading tour guides in Dubrovnik as we mused over a coffee.

I have to say, and I know this is going to split people’s opinions right down the middle, but I agree with him.

From September this year prices in shops up and down the country will be marked in both Kuna and Euro and then from the beginning of next year it’s ciao Kuna and bonjour Euro. And I for one can’t wait.

There are those who say that Croatia will lose its financial independence and be too reliant on the European Central Bank for economic maneuverers. I say “thank God.”

If I had to choose who would be controlling our financial future, I’d plump for the EU every time. But mostly, like anyone else, I’m looking forward to the Euro for selfish reasons. My mortgage is in Euros, how much easier that will be to control. When I travel I pay in Euros, no more exchanging Kuna. More than half of my earnings comes in Euros. Goodbye multi-currency bank accounts. All of my savings and indeed my pension is either in Euros or linked to the Euro. And if I opened my wallet right now I’d probably find more Euros inside than Kuna. The list goes on and on, so roll on September.

Even though the Euro isn’t the official currency of Croatia it really has been for years. Can you imagine buying anything major in Croatia in Kunas!?

No. And yes, I know exactly what my coffee partner was thinking. I recently travelled across Europe and it was so, so easy using one currency, in fact it was a pain when we came to the UK. So much so that we didn’t change many Euros into pounds but instead used a credit card everywhere. Unfortunately, that credit card was one in Euros, but at least we didn’t come home with pocketsful of loose change that we’d have kept for years. Now, that situation is the same when tourists come here.

And of course, they are careful when it comes to changing money, and who can blame them.

“With the introduction of the Euro it will be much easier for visitors to understand what they are spending and they’ll also be able to spend their Euros in other countries in Europe,” added my coffee colleague.

So that’s on a micro level, but what about a macro level. Well, our credit rating is sure to increase. The investment market will open massively with a stable currency, which is what the Euro has proven to be, at the helm. Honestly, do you think there is more chance of the Euro collapsing and forcing inflation, or the Kuna? I think we all know the answer.

And you can’t really look at the experiences of other countries to judge how successful or not the introduction of the Euro has been. I’m guessing that immediately after the introduction they’ll be a period of price correction. Yes, some things might jump up a little but after a short period of time prices will correct themselves as the market forces kick into action. The world is a much smaller place today, if a table in a local shop jumps ridiculously in price people will just order online from a certain Swedish brand.

Competition will bring price balance very quickly. Forget the Greek experience, it’s like comparing water and oil, just so many factors that aren’t the same and such a different story. And forget the UK as you can’t compare the centre of the financial world with Croatia, London and Zagreb are literally miles apart, losing the wealth creators in the city of London would be disastrous.

I actually have a friend who is a currency broker in London, as he says “the more currencies the better.” Although he did go on to say that “the second-largest and second-most traded currency in the international markets is the Euro, right after the dollar.”

Maybe look at the Slovenian experience, where after a couple of months of shock and price rises the dust settled and the economy started to pick up and prices went back to normal.

Entering the Eurozone puts us into a club of 19 EU countries, plus a few extra ones like our neighbours Montenegro, already using the single currency, or around 343 million people. So yes, bring it on! “Imagine travelling in Europe next year. And you’ll need is a ID card and the currency that you have already,” smiled the tour guide. No more passport, visa, exchanging currency. No, we’ll be travelling with a EU health card right next to our ID card and Euros in our wallets with our EU driving licence.

Anything that brings people closer together and aprt of a larger community is not to be ignored.     

Read more Englishman in Dubrovnik…well, if you really want to

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