Thursday, 01 December 2022
Prime Minister Plenković Prime Minister Plenković

Membership in the euro will attract foreign investments to Croatia – states Prime Minister

Written by  Nov 23, 2022

There is still a little more than a month left until the introduction of the euro, and the members of the National Council for the introduction of the euro reported today that preparations are underway. "The disappearance of the currency risk, the reduction of interest rates, savings in the costs of foreign exchange transactions, are the key benefits of the introduction of the euro in Croatia," said Prime Minister Plenković.

Opening today's 18th session of the National Council for the introduction of the euro as the official currency, Prime Minister Andrej Plenković mentioned numerous activities in the last few weeks carried out through a campaign to sensitize the public on this topic.

When it comes to the direct and permanent benefits of the introduction of the euro for citizens, Prime Minister Plenković pointed out that the greatest benefit is that the currency risk to which all those who have loans tied to the euro are exposed will completely disappear, so the amount of the loan instalment will no longer depend on the movement of the exchange rate of the kuna in relation to the euro.

Another important benefit, the Prime Minister said, is the trend of lowering interest rates for new loans.

Dual display started in September 

Furthermore, all those who frequently travel abroad and make foreign currency payments will realize savings in exchange transaction costs.

As for the risk of rising prices, Prime Minister Plenković emphasized, comparatively, this has not happened in other member states so far and this risk has been reduced to a minimum.

However, the specificity of our entry into the euro area is that it is happening at the moment of inflation, which is not linked to the euro, but to other circumstances.

He reminded that the exchange rate is fixed at HRK 7.53450 for one euro, and the dual display of prices has already been in place since September 5 and will continue for a full year after entering the euro area in order to protect consumers as much as possible.

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As for the economy, especially exporters, Prime Minister Plenković stated that they are all ready for conversion, and he singled out more favourable financing options and the disappearance of transaction and exchange costs as the main advantages for them.

In this context, he reminded that Croatia carries out 53 percent of merchandise exports and 60 percent of merchandise imports with euro area countries.

"Membership in the euro will additionally attract foreign investments to Croatia, strengthen competitiveness and reduce the vulnerability of the domestic economy," he said.

Transition period 

Speaking about the conversion process, Prime Minister Plenković pointed out that it has come a long way at the moment, from the production of euro coins and the acquisition of cash to the distribution to banks.

In just one week, from December 1, citizens will be able to get two initial packages of euro coins, which will have Croatian motifs, he announced.

From January 1 to 14, we will be in a transition period in which it will be possible to pay in kuna and euros.

From January 15, cash payments will only be possible in euros, but even after that deadline, kuna will be able to be exchanged for a longer time without costs, and deposits in banks will automatically be converted into euros.


The Voice of Dubrovnik


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