Proposed Law on Introduction of Euro sent to parliament for reading

The Government submitted to the first parliamentary reading the proposal for the Act on the Introduction of the Euro as the Official Currency in the Republic of Croatia, which states, among other things, the basic principles of the introduction of the euro, the possibility of exchanging the kuna for the euro and dual currency circulation.

Deputy Prime Minister and Minister of Finance Zdravko Marić said that the draft law stipulates that after the EU Council decides on the adoption of the euro and a decree determining the fixed exchange rate, the government will announce the date of introduction of the euro, then a fixed conversion rate, the date for beginning and end of the double circulation of the euro and the kuna, the date of the beginning and end of the dual display of prices and other issues necessary for the introduction of the euro.

“The basic principles of the introduction of the euro are defined, namely the principle of consumer protection, the principle of prohibiting unjustified price increases, the principle of continuity of legal instruments, the principle of efficiency and the principle of transparency and information”, he said.

According to Marić, the exchange of kuna cash for euro cash will be possible in banks, branches of the Financial Agency and post offices within 12 months from the date of the introduction of the euro.

Citizens will be able to exchange 100 kuna banknotes and 100 kuna coins per transaction free of charge. After 12 months, the exchange will be carried out at the Croatian National Bank, free of charge, and the exchange of banknotes without a time limit, and coins until the expiration of three years from the date of introduction of the euro.

The period of dual circulation (transitional period) in which the kuna and the euro will be in circulation at the same time will last 14 days from the date of introduction of the euro. The draft bill also contains details on exemptions for dual circulation (slot machines, amusement machines, self-service devices, ATMs).

The law also contains provisions on the application of the double disclosure obligation as a key measure for consumer protection in the process of introducing the euro. Businesses will thus be obliged to state the price in a clear, legible, visible and easily recognizable way in euros and kuna during the dual price display period, with a fixed conversion rate. This obligation starts at the beginning of September this year and ends at the end of 2023.

Certain exceptions are provided for situations where double disclosure is not appropriate for practical reasons or would cause disproportionate costs to businesses (sale of goods and provision of services through vending machines, markets, stands within shopping centers, mobile sales, farm buildings, storage facilities, games of chance, refunds on packaging, previously printed values on stamps, postage stamps, gift cards, etc.)

Furthermore, there are rules for recalculation of funds on accounts, amounts in the payment orders stated in kuna, rules for conversion in loan agreements in kuna and in leasing contracts in kuna, or adjusting the interest rate when necessary. The draft also contains the obligation to inform clients about the conversion, as well as rules for the conversion of securities. Due to the conversion, the consumer must not be put in a position that is less favorable for him than he would have been if the euro had not been introduced.

The law also enacts rules related for the preparation of the budget and financial plans in the year preceding the euro introduction, rules for recording in business books, rules for reporting and bodies responsible for supervision and misdemeanor provisions.

“This is all on the assumption that Croatia meets all the conditions before us and that the process of introducing the euro is over, ie that the introduction of the euro will take place on January 1, 2023,2 said Marić.

A total of HRK 32.8 million has been provided in the state budget for the implementation of this law in 2022, followed by HRK 3.6 million in 2023 and HRK 0.9 million in 2024.

In the financial plans of extra-budgetary users of the state budget, a total of HRK 13.3 million was provided in the state budget in 2022, and HRK 1.4 million in 2023.

Public consultations on the bill were held from January 17 to February 15, 2022, during which 128 comments were received.

The bill is entering regular parliamentary procedure.

Source: HRT