March 31, 2020 — The coronavirus may have brought Croatian society to a halt, but the switch over to the Euro keeps moving forward.
Croatia will not follow the lead of other EU member states and pause or slow down its introduction of the Euro currency, the Croatian National Bank told Poslovni Dnevnik.
Unlike Bulgaria, which has halted preparations for the introduction of the euro due to the coronavirus pandemic and its consequent economic consequences, Croatia's preparations to enter into the exchange rate mechanism are running smoothly, the Bank (CNB) told the newspaper.
Asked by the Poslovni whether the expansion of COVID-19 altered Croatia's plans for joining the eurozone, the Croatian National Bank said that despite the current challenges of Croatia's preparations for entry into the exchange rate mechanism, they were still proceeding with the Action Plan.
"All the measures we have committed ourselves to will be fully implemented on time,” the bank said. “In that sense, we expect to be an extremely serious candidate for entering the exchange rate mechanism in the second half of the year.”
Croatia was hoping to enter the European Exchange Rate Mechanism (ERM2) sometime after the scheduled parliamentary elections. Before the coronavirus, the European Commission Vice-President for the Euro and Social Dialogue Valdis Dombrovskis said Croatia could achieve this goal "as early as the second half of 2020".
Before the coronavirus outbreak, Zvonimir Savic, coordinator of activities related to Croatia's Eurozone entry, said the pace of implementation of the listed measures is "quite good”. The Croatian National Bank hopes to maintain that pace despite outside factors and other economic indicators such as employment and GDP taking a hit this year.
The entry into the ERM II exchange rate mechanism is followed by a period of at least two years during which other criteria must be met, the bank added, though it’s unclear if Croatia will meet those standards.
Bulgaria will delay the preparatory phase for joining the eurozone until 2021 because of the global crisis caused by the coronavirus pandemic, central bank Governor Dimitar Radev said on Monday.
"The deadlines set for joining the banking union and for participating in the European Exchange Rate Mechanism are no longer realistic," the governor of Bulgaria’s central bank said in a statement, Reuters reported. "That doesn't mean work has to stop. If we continue as before… despite the current difficult and complex environment, the delay until 2021 will not be fatal,” he added.
According to Radev, Bulgaria should not repeat the mistake of the 2009 global financial crisis and delay its entry into the ERM-II and the banking union until a new cycle, which could take more than 10 years.
"We should not repeat this mistake because the costs for both people and companies would be much higher this time," the Bulgarian governor said.
