Croatia to Take Steps to Be Ready for Euro in 2023, Maric Says

Croatia, which was admitted into the euro-waiting room last week, wants to be ready for the currency switch as early as 2023, its finance minister said.

While the Adriatic nation and Bulgaria got the green light to join the pre-euro currency system, they’ve got at least two more years to prove they can comfortably meet membership requirements before making the switch. The coronavirus pandemic has hit both tourism-reliant economies.

“The time we have is sufficiently long to minimize problems and prepare for adoption of the euro,” Finance Minister Zdravko Maric told reporters in Zagreb on Monday. “We will continue with the policies we had before the crisis, and intend to return within a year to Maastricht criteria regarding the budget deficit.”

Prime Minister Andrej Plenkovic, whose party scored a surprisingly decisive victory in July 5 general elections, is a big fan of euro adoption. The premier, known for his prudent fiscal policy, is expected to form a new cabinet this month.

Croatia to Take Steps to Be Ready for Euro in 2023, Maric Says

The European Central Bank said on Friday that the countries -- two of the European Union’s three poorest members -- satisfy the criteria for the final step before the euro adoption. The ECB also set base rates for their currencies, which will be allowed to fluctuate within a band of plus or minus 15%.

ECB Executive Board member Fabio Panetta on Monday said Bulgaria and Croatia may be able to adopt the euro by around 2023 as long as they comply with all the convergence criteria, including bringing their budget deficits below 3% of economic output. Both countries also vowed to ensure that their participation in ERM-2 would be smooth, he said.

©2020 Bloomberg L.P.

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