Monday, 06 July 2020
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Croatia moves a step closer adopting the Euro as the official currency

By  Jun 06, 2020

The European Central Bank (ECB) yesterday published a comprehensive assessment of five Croatian banks (Zagrebačka banka, Privredna banka Zagreb, Erste & Steirmarkische Bank, OTP banka Hrvatska and Hrvatska poštanska banka), which make up 79 percent of the total assets of all Croatian banks. The assessment was carried out at the request of the Croatian National Bank in order to establish close cooperation with the ECB, and in the process of Croatia's accession to the European Exchange Rate Mechanism II (ERM II). In the assessment of these Croatian banks, which included an asset quality review and stress testing, the ECB found that none of these banks had capital deficiencies, the Croatian National Bank announced yesterday.

The Croatian Chamber of Commerce recalled that the Croatian Government and the Croatian National Bank sent a letter of intent to the European Central Bank on July 4 last year, expressing "firm intention to join ERM II, and finally the introduction of the Euro when the convergence criteria are assessed in accordance with Article 140.”

At the same time, an obligation was made to implement a number of previously made commitments in the policy areas that are of high importance for a smooth transition and participation in the ERM II mechanism before joining ERM II. Among other things, one of the obligations was to "further strengthen the supervision of banks by establishing close cooperation with the ECB and carrying out the necessary preparations in accordance with the prescribed procedures."

Yesterday’s announcement from the ECB means Croatia is a step closer to entry into the Banking Union and ERM II, but also a confirmation of the stability and quality of the Croatian banking system. It also means that the current process of joining the Eurozone is proceeding according to the government’s plan and that we can expect to adopt the Euro as the official currency soon, maybe even by 2023.


The Voice of Dubrovnik


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