Finance Minister Zdravko Marić and Croatian National Bank Governor Boris Vujčić at a meeting of the euro-adoption council (Patrik Macek/PIXSELL) Finance Minister Zdravko Marić and Croatian National Bank Governor Boris Vujčić at a meeting of the euro-adoption council (Patrik Macek/PIXSELL)

Croatia received the green light on July 10 to enter the waiting room for the Eurozone, the Exchange Rate Mechanism II. The plan is expected to answer important questions such as which exchange rate will be used in the conversion, how loans and savings will be converted, and how will consumers be protected from price hikes - all issues that could have a huge impact on the lives of ordinary citizens.

The minimum waiting period in the EMR-2 is two years, but the shortest time actually spend in it was 2 and a half years in the case of Slovenia. This means that Croatia could join the Eurozone in 2023 at the earliest, but it is likely to take longer.

Finance Minister Zdravko Marić and the other members of the National Euro Adoption Council met on Monday to begin planning for the next stage of the process. Asked if the Eurozone could change its criteria for euro adoption in the interim, Marić said the criteria were clearly defined. He did underscore that due to the effects of the pandemic on the economy, the EU has loosened the rules for the time being.

“This year fiscal rules are not in focus when it comes to any member state. However, it is important for Croatia to get back to the Maastricht fiscal criteria next year as quickly as possible, not only because of euro adoption, but because of our own economy,” he said.

Croatia has now entered a phase of closer cooperation with the European Central Bank, said Croatian National Bank Governor Boris Vujčić. Croatia will become a member of the Banking Union this fall, which means the ECB will have oversight over Croatian banks. It also means that in the event of a bank failure, deposits would be insured under an EU scheme.

The EU has made an exception for Croatia and Bulgaria, which was also approved for the EMR-2 last week. All of the other Eurozone members had to adopt the euro first before being allowed to join the Banking Union.