Wednesday, 10 August 2022

Croatia applying for membership in the European Stabilization Mechanism

Written by  Jul 29, 2022

The Croatian government has submitted a request for membership in the European Stabilization Mechanism (ESM), which Croatia should enter in the first quarter of next year.

The ESM is an intergovernmental organization founded in 2012 by the member states of the euro area. Its mission is to enable the countries of the euro area to avoid and overcome financial crises and to maintain long-term financial stability and prosperity.

The ESM implements its role by granting loans and other types of financial assistance to member states that are in a difficult financial situation.

The members of the ESM receive loans in exchange for the economic reforms they undertake to carry out, which are called conditionality. When approving loans or financial assistance, the ESM has several instruments at its disposal, including a loan for the macroeconomic adjustment program and a loan for the indirect recapitalization of banks.

The shareholders of the ESM are exclusively the countries of the euro area. Croatia will become part of the euro area on January 1, 2023, and is expected to join the ESM in the first quarter of next year.

 

The Voice of Dubrovnik

THE VOICE OF DUBROVNIK


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