18:43 / 17.01.2022.

Author: Katja Miličić

Government presents draft of euro conversion bill

Andrej Plenković

Andrej Plenković

Foto: HTV / HRT

Prime Minister Andrej Plenković's government presented on Monday the draft of a bill on Croatia's conversion to the euro, outlining a plan that includes listing the prices of all goods in kunas and euros starting on September 5.

It will be possible to convert kunas to euros in banks, post offices, and FINA offices for a period of one year after Croatia adopts the euro, while conversion at the Croatian National Bank will be possible indefinitely. The Prime Minister underscored there would be no fee for the conversion.

"We want this process to be simple and cost-free for our citizens. This means that we are encouraging citizens who have kunas at home to put this cash into bank accounts now. The moment we adopt the euro, all kuna bank deposits will automatically be converted to euros,” he said.

Finance Minister Zdravko Marić said rising inflation will not pose a problem for the transition to the European currency.

"The inflation trajectory that we see now should not threaten the time frame and we expect to get positive marks on all the criteria we have to meet,” Marić said.

Croatian National Bank Governor Boris Vujčić says the effects of conversion on prices and inflation will be insignificant.

"The effect of adopting the euro on the inflation rate will be less than 10% and inflation will be less significant that other factors. We should not worry about this when we have such strong pressure on inflation coming from import prices, first and foremost energy prices,” said Vujčić.

Under the bill, sellers would be barred from raising prices without justification. However, Vujčić suggested that this was something consumers could influence.

"Whether it is justified or unjustified is something consumers will decide. That's the point of dual price listing. If you see someone raising prices that you know cost less in kuna, go to a different seller. The best prevention of price hikes is competition,” Vujčić said.

The currency conversion is expected to turn 36 billion kuna into euros. The draft of the bill is up for public comment until mid-February.

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