Croatia’s ERM-2 Entry on Course Despite Crisis, Vujcic Tells SD

(Bloomberg) -- The Covid-19 crisis won’t affect Croatia’s expected entry into the ERM-2 and the euro-area’s banking union, but the timing of adopting the single currency is more difficult to forecast, central bank Governor Boris Vujcic said.

“Whether the crisis will influence Croatia’s ability to satisfy the Maastricht criteria and adopt the euro in the shortest possible time, which will be evaluated about two years after we enter ERM-2, at this moment it is difficult to tell,” Vujcic told Slobodna Dalmacija newspaper in an article published Monday.

Prime Minister Andrej Plenkovic said Croatia has fulfilled all the criteria needed to enter the euro-area waiting room, known as the ERM-2, and will advance toward adopting the common currency.

The next step should come from the European Central bank, the group of nations already sharing the euro, and Eurostat, as they evaluate Croatia’s compliance before the nation can ask to be admitted into the ERM-2. Vujcic has said that should be done in the second half of the year.

If the economic recovery begins next year as forecast, and if Croatia stabilizes its public finances and regains the trend of cutting the public debt levels, “the adoption of the euro in the so-called shortest-possible time is still possible,” Vujcic said. “But given the level of uncertainty we are facing, that makes forecasting very difficult. I believe we will be able to talk about Croatia’s euro-area entry date with much more certainty next year.”

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