July the 17th, 2022 - All hands are firmly on deck with employees having to work hard in three shifts to make sure the new Croatian euro coins are going to be ready by the end of this year for the official introduction on the first day of 2023.

As Poslovni Dnevnik writes, the governor of the Croatian National Bank (CNB), Boris Vujcic, recently said that the current crisis we're in due to rising inflation and the ongoing war in Ukraine best illustrates the advantage of the Republic of Croatia finally joining the Eurozone.

"The markets already know this, they know exactly what the exchange rate will be here in Croatia, and because of that, we didn't even see any pressure on the weakening of the kuna, nor did we have to intervene or raise our interest rates. Other European Union (EU) member states that are not part of the Eurozone, such as Hungary, Poland, the Czech Republic and others, have already experienced pressure on their own respective currencies and interest rates, which are rising very strongly, which spills over into the home loan and business loan market, while in Croatia, they're thankfully still at a historic low,'' explained Vujcic

''If we weren't set to officially join the Eurozone, the situation would be different in this country,'' he noted.

The governor also announced that the minting of Croatian euro coins will start on Monday. The process, as he said, is logistically demanding, because Croatian euro coins all need to be minted by the end of this year, and it will have to be done in three shifts.

"We're on the verge of minting all of the Croatian euro coins," he said, adding that the second major demand will be the withdrawal of the current kuna banknotes from use.

''As for the conversion from the Croatian national currency to euros, it will be automatic from January the 1st, 2023, and all loans that aren't in euros will remain at the exchange rate that had already been established. Those who have loans with a fixed interest rate will see everything remain the same as it was when the kuna was being used, and those who have a variable rate will see it adjusted in such a way that the consumer doesn't end up in a worse position after the conversion than they were before it,'' he explained.

''Consumers are going to remain in the same situations as they were before,'' assured Boris Vujcic.

For more, make sure to check out our dedicated politics section.

July the 16th, 2022 - Croatian secret shoppers chosen by the Economy Ministry are out on the field monitoring the rollout of dual pricing in the country's stores as Eurozone accession rapidly approaches.

As Poslovni Dnevnik writes, after the EU Council formalised the decision to introduce the euro as the official currency in the Republic of Croatia a mere four days ago, the Economy Ministry announced a group of Croatian secret shoppers who will monitor the situation for the sake of consumer protection during the transition to the new currency.

The competition held back in the spring selected six candidates from different parts of Croatia, who, in mid-August will start monitoring precisely how the prices of goods and services are recalculated out in the field during the mandatory dual pricing rule which is set to come into force in September 2022. Some stores, including large chains like Konzum, have already begun displaying their prices in this way.

The selected Croatian secret shoppers are from the Medjimurje Consumer Society and the Consumer Protection Development Organisation from Selnica in Medjimurje County, the Consumer Education and Information Centre from Bilje in Osijek-Baranja County, the Croatian Consumer Protection Association from Zagreb, the Consumer Rights Protection Association from Split, and the Association Consumer Centre from Rijeka.

How will it work?

Over the next thirty days, these Croatian secret shoppers will conclude a contract in which they will receive 112 to 120,000 kuna for their mystery shopping activities, and they will monitor and obtain consumer information until the end of next year, by which time the obligation of dual price reporting will be in full force and will have been for some time.

The plan is for the engaged associations to monitor price movements and the correctness of price recalculation and rounding on a monthly basis by reviewing 50 to 60 different goods and services, at a minimum of 10 points of sale and five points where various services are provided in exchange for money. The associations that have been selected as Croatian secret shoppers have the obligation to publish the results they've obtained regularly, more precisely by the 15th of each month, on their websites.

The plan is also for the situation on the ground to be checked by five people who will be hired by selected associations, and the tours should include, in addition to retailers, fuel stations, butchers, bakeries, as well as service providers such as hair salons and catering and hospitality facilities. For two hours, associations must also provide open telephone lines where consumers will be able to get information from them about those facilities who are wrongly trying to take advantage of the situation and make a profit.

Croatian secret shoppers will soon be placed in banks, as well...

It won't only be stores and other facilities under the radars of Croatian secret shoppers, banks won't be immune either. The Croatian National Bank noted that it will hire secret shoppers, or perhaps in this case it's better to call them secret clients, in order to monitor what practices are being carried out at bank counters, as well as at other credit intermediaries under its authority.

For more, make sure to check out our dedicated lifestyle section.

July the 15th, 2022 - The huge Croatian shopping chain Konzum is set to begin showing the prices of the items on their shelves in both kuna and euros as Croatian Eurozone accession rapidly approaches.

As Poslovni Dnevnik writes, starting this week, Konzum will proactively start with the dual display of prices for products and services in both kuna and euros, and in this way, even before the official obligation on the dual display of prices comes into force on September the 5th, 2022, all customers shopping in Konzum's stores will have an insight into the prices of products and in the new currency that the Republic of Croatia will officially introduce on the first day of 2023.

All items on Konzum's ample shelves will have their prices expressed in both Croatian kuna and euros and a fixed conversion rate amount of 7.53450 kuna to the euro, and the change of all labels in Konzum's more than 600 stores will be done by the end of July.

The double display of prices even before the legal obligation is a continuation of the company's wider policy of open and transparent relations with its customers. One of the similar examples of this was Konzum's price reduction of over a thousand items back in February of this year in accordance with the decision of the Croatian Government to reduce VAT, and it was the first retail chain in all of Croatia to do so even before the decision came into force in April.

"A transparent relationship with our customers is imperative for our business, on the basis of which we earn and strengthen their trust day by day. We always strive to be open in everything we do, including in this challenging period of the introduction of the euro. We started with the preparations on time and our employees are ready to continue with all the stages of implementation of these historic changes in order to help our customers adapt to the transition to the country's new currency as easily as possible,'' said Zoran Mitreski, President of Konzum's Management Board.

The entire process of introducing the euro in Croatia is being divided into three phases, and Konzum has been monitoring each of them with its own activities. The first one refers to the display of dual prices and a fixed exchange rate, the implementation of which Konzum has already begun. Double prices will be displayed until December the 31st, 2023 on all products on sale in all Konzum stores, including on the online store. Prices in both currencies will be displayed throughout the entire process of selecting and purchasing items – on the store shelves, in online shopping carts, during the checkout process and during an order confirmation when purchasing goods online, as well as on all issued receipts.

The second phase will begin on January the 1st, 2023 with the official introduction of the euro in Croatia, and it is important to note that it will remain possible to pay in kuna until January the 14th of the same year, with refunds being given only in euros.

The third phase refers to the period from January the 15th, 2023, when the euro will be the only currency with which customers will be able to pay in Konzum's stores.

For more, make sure to check out our dedicated business section.

July the 4th, 2022 - Croatian Eurozone accession is looming, with the date on which the kuna will be sent to the history books being marked out as the 1st of January, 2023. There are a lot of practical and logistical issues to now tackle, and filling the country's ATMs with euros instead of kuna is just one of them proving to be a challenge.

As Poslovni Dnevnik writes, rapidly approaching Croatian Eurozone accession requires very many adjustments. While there won't be much work in the conversion of cashless payments, cash payments bring a series of challenges for everyone - from people to banks, companies and shops, reports HRT.

Most of the total of Croatian 4,700 ATMs, which are of course all active during the winter months, will have to be adapted for euro banknotes in the very last weeks of December, making them unavailable for Croatian kuna withdrawals.

Filling ATMs with euro banknotes will be an extremely demanding job operationally speaking. In most ATMs, certain parts will have to be physically replaced.

"The whole process of adapting Croatian ATMs starts with the adaptation of the cassettes themselves, in which the banknotes come out, since the euro banknotes have different dimensions than the kuna banknotes have. As we have a lot of ATMs across the Republic of Croatia, this is going to be a rather long-term process where all the ATM cassettes should be adapted,'' explained Tihomir Mavricek, executive director of the Cash Sector of the Croatian National Bank (CNB).

The problem is that at most of Croatia's ATMs, the adjustment to euros means that they will not be available for the withdrawal of kuna for a certain number of days, and the uncomfortable timing comes in the form of it being just before the Christmas season where there are significantly increased levels of consumption. On top of that, not all ATMs will be ready for euros by the date of Croatian Eurozone accession, ie the 1st of January, 2023.

"During the month of December, we'll visit more than 60% of the ATMs maintained by our company in the field, and prepare them to work with the new currency. The first euros will be available to people for withdrawal at certain ATMs in Croatia as early as January the 1st, 2023, according to the criteria of regional coverage and the frequency of use of those ATMs, which are determined by the banks," the Payten company announced.

Not all ATMs are equal, however, and those within the OTP banka system can be remotely ''induced'' to pay out either kuna or euros.

"All of our ATMs will be in operation for withdrawing money every day during the month of December, and at the same time they'll be ready to pay out euros from January the 1st, 2023," OTP banka announced.

Despite intensive preparations, it will still be technically impossible to avoid days without interruption of withdrawals of kuna or euros at most ATMs as Croatian Eurozone accession gets closer, but the CNB has assured that everything related to this process must be published and made accessible to people on the banks' official websites.

"Even if we're in a situation in which not all ATMs are available for euro withdrawals, people don't need to worry about it, since during the first two weeks following Croatian Eurozone accession it will remain possible to pay for things in both kuna and euros in shops, while merchants are obliged to return the rest in euros, of course, wherever it's possible to do so," explained Mavricek.

While cash payments during the last weeks of December and the first weeks of January will be difficult for many people, POS systems and card payments should continue being carried out without any interruptions or issues.

For more on Croatian Eurozone accession and how it's going to affect daily life, make sure to keep up with our politics and lifestyle sections.

ZAGREB, 8 June 2022 - The decision making by a qualified majority vote, instead of the unanimous endorsement, should be introduced in some segments of the European Union's foreign affairs, a majority of European Parliament members agreed on Tuesday when they also called for more invesments in Ukraine's defence.

A majority of MEPs expressed support to the plans to introduce qualified majority voting for certain foreign policy areas, as already provided for in the Treaties in order to increase the effectiveness of EU foreign policy.

The rule of unanimous consent should be abandoned. This is what citizens who participated in the Conference on the Future of Europe expect, said French MEP Nathalie Loiseau, a rapporteur for  European Parliament recommendation to the Council and the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy on the EU’s Foreign, Security and Defence Policy after the Russian invasion of Ukraine.

Another rapporteur David McAllister said that it was also proposed that weapons and necessary material should be sent to Ukraine in accordance with the needs expressed by Ukraine's authorities.

Croatian MEP Tonino Picula said that the common security policy mist no longer be the weakest spot in our integration and underscored that by defending itself Ukraine also defends Europe.

Croatian MEP Željana Zovko, said that the EU needed "preventive diplomacy" as a tool to resolve issues and stop crises.

 "What we are lacking is preventive diplomacy," she said.

Today, we have discussed the forthcoming elections in Bosnia and Herzegovina."Twenty years after the conclusion of the Dayton peace agreement, we still have a a half-sovereign country in this case we missed that preventive diplomacy," she said.

Croatian MEP Mislav Kolakušić said that the EU turned into the 51st member of the USA when it comes to foreign ans security affairs.

For more, make sure to check out our dedicated politics section.

June the 5th, 2022 - What with the war still raging in Ukraine following Russian invasion earlier this year, and the negative economic consequences left by the global coronavirus pandemic still very much in evidence, is a crisis really the best time for Croatian Eurozone membership? Here's what the Croatian National Bank's governor Boris Vujcic and the Croatian Prime Minister Andrej Plenkovic have to say on the topic.

As Poslovni Dnevnik/Ana Blaskovic writes, the recent assessment that Croatia is ready to introduce the euro as its currency is the achievement of one of the two strategic goals of the current government, said Prime Minister Andrej Plenkovic.

He pointed out that the Convergence Report underlined Croatia as the only remaining member state outside of the Eurozone now ready for the euro, and that it was especially important that it met the criterion of stable prices.

"Croatia no longer has macroeconomic balances, and the fact that in the whole package of our efforts, from responsible public finance management, our exit from the excessive budget deficit procedure, raising the rating to the investment level, the fact that we implemented all reforms that were on the table after entering the exchange rate mechanism and banking union in time, in accordance with the action plan, says that Croatia has achieved one of the fundamental political goals in the mandates of our two governments through the implementation of the strategy for the introduction of the euro,'' said Plenkovic, making no effort to hide his satisfaction at the recent press conference at Banski dvori, accompanied by Minister Zdravko Maric and Davor Filipovic.

Focusing on meeting the Maastricht criteria, he didn't say a word about the EC's far less flattering assessment that there has been no progress made in terms of economic convergence and in regard to substantial reforms.

Just a few hundred metres away, the Governor of the CNB (who together with Plenkovic presented the Strategy for the Introduction of the Euro in October 2017) addressed the press separately, accompanied by EC Vice President Valdis Dombrovskis.

He reiterated that the benefit of Croatian Eurozone membership means strengthening resilience to all sorts of crises and external shocks, of which there have been many recently, while bringing multiple benefits to both people and the economy.

"It's much better to be in the Eurozone at the moment than it is to be outside it," said Boris Vujcic, noting that back in October 2020, the CNB entered into close cooperation with the ECB, which means that Croatia has very much already entered the banking union, adding that the CNB is waiting for the final step of integration into the Eurozone, set to take place on the first day of 2023.

When asked by reporters whether a time of ongoing crisis was really the best time for Croatian Eurozone membership, Boris Vujcic said it would have been better if we had done it earlier.

"The sooner Croatia's entry into the Eurozone, the better, this is the best moment we have at our disposal now and I think it's proof that we already had the support of the ECB at the beginning of the pandemic crisis, which wouldn't have been possible if we weren't very close in terms of the exchange rate mechanism. That helped us overcome the coronavirus crisis more easily,'' he said. A concrete advantage for Croatia, he illustrated, is that interest rates have remained unchanged, unlike across most non-Eurozone member states, where they have risen and risen.

Valdis Dombrovskis congratulated Croatia on its "historic achievement", saying all criteria had now been completely met.

"Joining the Eurozone is especially important because the whole world is in a crisis caused by the war, and that's why it's important to be part of the Eurozone, which uses the second strongest currency in the world. This will help Croatia in many financial aspects, including regarding lower interest rates,'' Dombrovskis said.

The EU Council is expected to make its final decisions on Croatian Eurozone membership in the first half of July this year, with prices set to be shown in both kuna and euros starting on the 5th of September. Finance Minister Zdravko Maric said that Croatia still has a lot of work to do, which includes the adequate (pre) supply of cash to banks, Fina and the Croatian Post (Hrvatska posta), as well as the indirect pre-supply to companies so that everyone is ready to realise all transactions in euros as of the 1st of January, 2023.

For more, make sure to check out our dedicated politics section.

May the 25th, 2022 - Croatian IT sector wages continue to be the lowest in the entire European Union (EU) despite the fact that this rapidly blossoming field has experienced a very real boom over the last few years.

As Poslovni Dnevnik/Marija Brnic writes, the cost of paying out wages for EU-based employers has continued to rise in most countries, with the exception of a few countries that stalled in 2020 and continued to grow, including the Republic of Croatia.

According to a quarterly analysis of labour market trends by the Croatian Bureau of Statistics (CBS), based on Eurostat data, only Ireland, Croatia and Cyprus had a temporary halt in gross hourly wage growth, while in Spain and Italy, gross hourly wages rose in the first year of the coronavirus pandemic, but last year they ended up below the levels seen back in 2020.

The level of wage costs paid by employers per hour with all costs varies significantly between EU member states, from 7 euros in Bulgaria and 8.5 in Romania, to 41.6 euros in Belgium, 43 in Luxembourg and 46.9 in Denmark.

Compared to Croatia, where the average hour of work costs an employer around 11.2 euros, Bulgaria and Romania have a lower hourly rate, as do Latvia and Hungary, and employers in Lithuania and Poland have slightly higher costs to deal with. In neighbouring Slovenia, with which Croatia often likes to compare itself, the gross hourly wage is almost twice as high (21.1 euros).

Given the current alarm bells ringing from certain sectors, primarily hotels and the hospitality and catering field, the lack of qualified workers even despite the abolition of the annual quota system for the employment of foreign (non-EEA) workers, we can expect that in the Croatian case, hourly rates will have stronger growth in the 2020 report, but if we look back three years, wages have fallen in most sectors, with the exception of education, healthcare, entertainment and the arts.

The lowest hourly rates in Croatia were in administrative services (8.3 euros) and hotels and restaurants (8.6 euros), and the highest in the information and communication sectors (15.9 euros), finance (15.5 euros) and science (15.2 euros).

In the EU's finance and insurance sector last year, hourly rates ranged from 9.9 euros in Bulgaria to 77.3 euros in Luxembourg, and in professional, scientific and technical activities, they ranged from 10.9 euros in Bulgaria to a significantly higher 57.9 euros in Denmark.

In healthcare, hourly wages in the EU rose in all countries except Greece, ranging from 8.1 euros in Bulgaria to 45.2 euros in Luxembourg. And although the sector is the largest, Croatian IT sector wages remain the lowest in the entire EU, with Sweden leading in that regard with an impressive 57.7 euros per hour.

When it comes to tourism, last year, ranges from a mere 3.8 euros in Bulgaria to 40.7 euros in Denmark were the norm. Croatian hourly rates were at the level of Estonia, and Cyprus, Latvia, Lithuania, Hungary, Poland, Malta, and Romania take home less per hour.

Looking at other competitors when it comes to sea and sunshine, only in Greece, regardless of the coronavirus pandemic, the price of an hour of work in tourism rose (to 15.2 euros), while in Spain and Italy it decreased slightly last year, and in the Croatian case, last year saw slight recovery, but that recovery failed to reach the record high of pre-pandemic 2019 of 9.1 euros. In neighbouring Slovenia, on the other hand, the hourly wage in the tourism sector stands at 14.6 euros.

In the manufacturing industry, hourly rates last year ranged from 5.8 euros in Bulgaria to 48.5 euros in Denmark, with only Germany, Sweden and Belgium seeing people take home more than 40 euros per hour. Here in Croatia, the price of an hour's work stood at 10.3 euros and is slightly higher than before the pandemic, but it is significantly lower than the sum just across the border in Slovenia (20.3 euros).

They have a lower gross hourly wage than Croatian industrialists in Romania (7.3 euros). In construction, only in Denmark do employees have an hourly salary of more than 40 euros, and the lowest of all can be seen in Bulgaria, Romania and neighbouring Hungary, and Croatian salaries are just over theirs, standing at 10 euros.

In Germany, on the other hand, where Croatian builders like to head to, gross hourly rates are lower than those in the manufacturing industry, which analysts associate with the employment of foreign workers, which increases labour supply and reduces wages. This is not the case, for example, in nearby Austria.

Much like in construction, the Danes are the only ones in trade to have an hourly rate above 40 euros, and the lowest can, once again, be seen in Bulgaria (6.3 euros), which is less than in Croatia (11.1 euros).

For more, make sure to check out our dedicated business section.

May the 11th, 2022 - The Hungarian PM Viktor Orban is known for his rather unusual political sentiments, but this one probably takes the cake. He recently claimed that Croatia ''took Hungary's sea'', leaving it without ports. This was said in front of Ursula von der Leyen, the European Commission's President.

As Morski writes, European Commission President Ursula von der Leyen met with Hungarian Prime Minister Viktor Orban yesterday over Hungary's opposition to the European Union's joint embargo on Russian oil. Von der Leyen said after the meeting that progress had been made and that some issues with Orban had been clarified.

''We've made some progress, but there's still work to be done,'' she added, which actually means that no concrete agreement has yet been reached with Hungary, the leader of which is very reluctant to firmly join the EU on its stance against Russia.

As one European diplomat explained to France Presse, Hungary would need a new pipeline to secure its oil supply, connecting it to the Republic of Croatia, which has access to the sea. Therefore, it seeks guarantees that Zagreb will engage in the construction of this infrastructure, as well as guarantees of European Union funding to facilitate it financially.

''Those who have sea and ports are able to bring oil on tankers. If they hadn't taken it away from us (the sea), we would also have a port,'' Viktor Orban said in an interview with the Hungarian state radio last Friday, as reported by Politico, which explains that Orban was referring to the Dalmatian coast.

Hungary is otherwise the biggest opponent of the joint EU embargo on Russian oil, and Viktor Orban has been seen as a thorn in the side of many diplomats and politicians across the EU for some time now.

To briefly recall, all 27 EU member states must be unanimous in order for sanctions to be imposed against Russia. The sanctions proposal cites certain exceptions, but both Slovakia and Hungary consider them to be insufficient. Hungary is the country that strongly opposes the European embargo on Russian oil and has already asked for a five-year postponement.

Hungarian Foreign Minister Peter Szijjarto said on Monday night that Hungary cannot accept the proposed package of European Union sanctions on Russia until its fears are resolved.

Earlier, Prime Minister Orban said that the European Commission's proposal would have the effect of an "atomic bomb for Hungary".

"It would destroy our stable energy supply," he added.

For more, check out our politics section.

May the 9th, 2022 - With Eurozone entry rapidly approaching and due at the very beginning of next year, just what will the average Croatian wage and pension be? It seems an increase is on the cards.

As Poslovni Dnevnik writes, when Croatia introduces the euro at the beginning of 2023, the average Croatian wage (net salary) will stand at around 900 euros, and an average pension will stand at around 320 euros, considering the fact that due to ongoing inflation, personal incomes and pensions across Croatia could increase slightly before the changeover from the kuna to the euro anyway.

If we take in some information and consider it relevant data on the average net salary across the EU back in 2021, which amounted to 1916 euros per month, it means that the average Croatian salary needs to be about a thousand euros to reach the EU average. In nearby Austria, the average net salary last year was 2053 euros, and in Belgium - an impressive 2091 euros.

In Bulgaria, the average net income last year was 413 euros, and the average Croatian wage was 797 euros, while the neighbouring Slovenians received an average of 1,038 euros per month back in 2021, writes Slobodna Dalmacija.

The Czechs were doing slightly better than the Croats were with a typical net salary of 813 euros, and the Danes were much better, with 3,100 euros, placing them at the very top of the European Union (EU). They are closely followed by the Swedes with a salary of 3062 euros.

The Estonians are also better paid than Croats typically are, with an average salary of 958 euros net, with the Latvians and Lithuanians being weaker with 648 euros and 645 euros respectively. The people of Cyprus receive an excellent 1,658 euros, and Malta also earns well from the Croatian perspective, with an average Maltese wage being about 2261 euros per month.

They are followed by rich EU countries: Finland with 2509 euros, France with 2157 euros and Germany with 2270 euros as an average salary.

The average Greek earns 917 euros, a Portuguese worker 846, a Pole 736, a Slovak 690, and a Hungarian 683 euros. Over in Romania, the average net salary is only 522 euros, meaning that only the Bulgarians are the poorest in the EU.

The average net salary in Italy is 1,762 euros, and in neighbouring Spain 1,718 euros. The real "heavyweights" are the Icelanders with 3435 euros and the Luxembourgers with 3009 euros, followed by the Irish with 2479 euros and the Dutch with 2263 euros.

For more, make sure to check out our lifestyle section.

May the 6th, 2022 - Croatian euro printing is set to begin on an enormous scale come this July, as Croatia makes the very last preparations to send the kuna to the history books and finally join the Eurozone next year.

As Poslovni Dnevnik/Jadranka Dozan writes, the National Council for the Introduction of the Euro has once again confirmed that all of the current preparatory steps are in line with the plan to switch to the bloc's single currency on the first day of 2023. Recently, the Croatian National Bank (CNB) finally presented the design of the national side of the one euro coin, which was selected in a repeated tender.

The CNB has already begun preparations for large-scale Croatian euro printing, and according to Governor Boris Vujcic, mass production should start during the month of July. Before that, one million kuna's worth of test coins will be made by the middle of next month, the central bank says.

By this summer, the ongoing tender for the services of creating and implementing an informative national campaign to replace the kuna with the euro will be concluded. The estimated value of this public procurement stands at a massive 27 million kuna, and half of the campaign costs are being borne by the European Commission (EC).

Currently, no obstacles are being noticed

All in all, in recapitulating the course of preparatory activities from the 15th session of the Council, it was said that everything is going according to the planned deadlines. The Prime Minister recalled that the Croatian Government adopted a report on the action plan back in late March, which confirmed that all reform commitments made upon entering the European Exchange Rate Mechanism ERM II (in July 2020) had now been met by Croatia.

Croatian euro printing aside, the competent ministers responsible for individual areas of measures from the action plan briefly reported on the activities carried out in the area of ​​improving the business environment, managing state-owned enterprises, strengthening the bankruptcy framework and the framework for preventing money laundering.

The new Minister of Economy Davor Filipovic emphasised the administrative relief that will be felt by the domestic economy with an estimated effect of 686 million kuna, as well as 531 million kuna of reduced non-tax and parafiscal benefits. From the judicial department, they primarily emphasised the changes in the bankruptcy law and the improved framework for the work of bankruptcy trustees.

Increased inflation rates, which according to recently updated government projections rose to a concerning 7.8 percent of the annual average this year, do not pose a problem or obstacle in the context of the convergence criteria for the euro, both the government and the CNB are strongly convinced.

Regarding the inflation criterion (up to 1.5 percentage points above the average of the three best performing countries), Governor Boris Vujcic explained that, for a start, this criterion doesn't refer explicitly to the (three) lowest inflation rates but instead to the best performance.

Imported price pressures

The governor reiterated that the greatest advantage of the euro is shown during financial and other such crises, such as the recent global coronavirus pandemic or the current crisis being caused by the economic consequences of the war in Europe, more precisely in Ukraine.

This, he said, is especially true for small and open economies such as that of Croatia, and the country's lag over the past decade is the result of a stronger decline in the crisis and a longer recovery period, partly due to Croatia's then inability to rely on the ECB's monetary policy. Although inflationary pressures will obviously last longer than expected before the escalation of the war in Ukraine, and imported inflationary pressures may spill over into Croatian prices, the governor underlined that this should not be linked to the introduction of the euro.

People are often afraid of prices being rounded up upon a country's entry to the Eurozone, but now these effects don't really seem crucial. In the seven countries that last entered the Eurozone, prices which were a mere 0.2 to 0.4 percentage points higher were recorded.

For more, check out our politics section.