For some, the mere idea of the introduction of the euro in Croatia is enough to induce passionate debate. For others, the introduction of the single European currency is the next step to leaving the country's tumultuous past behind, and joining the ''ever closer union'' that Eurocrats in Brussels speak so highly of. While the United Kingdom managed to secure a way out of the currency's introduction much earlier, Croatia had to agree to take on the euro in order to join the bloc.

Introducing the euro in Croatia is likely to bring problems as well as solve them, but what use is the adoption of the single currency when many of Croatia's national institutions are in total disarray? Until state institutions can be brought into line, the introduction of the euro and the overhaul that involves will only work to contribute to existing issues, rather than help to solve them.

As Ana Blaskovic/Poslovni Dnevnik writes on the 9th of January, 2019, just over a year after the announcement of the Croatian Government's intention to introduce the euro, encouraged by positive signals from Europe, Croatia will send a letter of intent to enter the exchange rate mechanism (ERM) by the summer. The aforementioned mechanism is known as the ''waiting room" for a country's introduction of the euro as its currency. Although the letter is only the first formal step in the process of replacing the kuna with the formerly problematic single currency, its content is not merely a pleasant yet rather empty formality.

The letter will involve the Croatian Government agreeing on a series of concrete reform moves, in a relatively short period of about a year. "The ball is now in the government's court to make a list of moves that can be completed within a year, within the gauge that they're achievable, easily measurable, and are written in the letter of intent," an interlocutor close to the central bank told Poslovni Dnevnik.

Judging by the Bulgarian version of the letter that Sofia officially sent to a number of European Union addresses at the end of July, the answer to the question of what exactly Andreja Plenković's government could or should put on paper doesn't need great philosophical effort put into it. There is already a list of specific recommendations from Brussels for the Republic of Croatia.

Reforms is a word that everyone in Croatia gets sick of hearing, and this next political move involves a well-known series of infamous reforms, the implementation of which has been largely shifted to ''next year''. The euro in Croatia however, demands certain reforms be met, and sooner rather than later.

For example, there are administration reforms (including those regarding salaries), reforms to the utterly bizarre Croatian justice system, the establishing of a more just system of social benefits and rights, the strengthening of the fiscal framework, and the introduction of property taxes, a controversial idea which Plenković has moved around quite a lot on.

"The European Commission supports member states' efforts to introduce the euro, not only politically, but in also providing the necessary technical assistance and potential financial resources," said Valdis Dombrovskis, adding that Croatia is very serious in its intentions and is working intensively to meet the conditions for its eventual entry into the eurozone. One of the panelists at that conference was the Croatian National Bank's Boris Vujčić, which is also regarded by all as a firm sign of Croatia's support.

"The most difficult thing to do is to enter the ERM II, because there are no clear criteria that a country needs to meet in order to enter the exchange rate mechanism. Once you're in the ERM, the criteria for introducing the euro is clear, although some of it is constantly changing, so you do need a bit of luck on your side in order to be able to fulfil it,'' said Latvia's governer. One thing is certain, unlike the correspondence Croatia has had with the European Commission until now (primarily concerning becoming a member of the EU), the rules for a country's adoption of the euro are much stricter.

Make sure to stay up to date for more information on the intended introduction of the euro in Croatia and much more by following our dedicated politics page.

Click here for the original article by Ana Blaskovic for Poslovni Dnevnik

While some remain passive to the notion, Croatia and the Eurozone is a particularly sensitive topic among many. After having seen what happened to Greece several years ago, many are naturally suspicious of the introduction of the common currency which once presented as a good idea that had gone very wrong.

As Poslovni Dnevnik writes on the 21st of December, 2018, most Croats appear to be against the country's eventual accession to the Eurozone, most are concerned with immigration and terrorism at the European level, as well as with national unemployment and the general economic situation. The number of Croats who have a positive image of the European Union also appears to be increasing, with the number of those with a negative image gradually decreasing, according to the results of this autumn's Eurobarometer.

The autumn Eurobarometer survey was conducted from the 8th to the 22nd of November in all of the European Union's 28 member states, five candidate countries, as well as in the Turkish community in Cyprus.

Croatia and the Eurozone remains to be a topic that causes controversy, and the survey shows that 56 percent of respondents from the Republic of Croatia are against the introduction of the formerly problematic single European currency, 40 percent of the respondents are for the euro's introduction as the country's main currency, while just 4 percent said they didn't know how they felt.

It seems Croatia and the Eurozone is still being met with a cold front. Compared to 2018's spring Eurobarometer, the percentage of euro support in Croatia has dropped by 6 percentage points. The largest euro support is in neighbouring Slovenia, at 86 percent, then in Luxembourg and Estonia with 85 percent, followed by the Republic of Ireland and Belgium with 84 percent. The lowest support was found in the Czech Republic with 21 percent, the United Kingdom with 28 percent, followed then by Sweden with 29 percent, and Denmark with s slightly higher 30 percent.

As far as what people deem to be the most important issue facing the country, most Croats stated unemployment (43 percent), then the economic situation (28 percent), and rising prices and living costs (27 percent). At the European level, concerns about unemployment was the most important issue for 23 per cent of respondents, followed by rising prices and immigration.

Croats are among the most pessimistic when it comes to the state of the national economy, 83 percent think it is completely bad, and only 16 percent think it is quite good.

These are still somewhat better results than what those of the spring Eurobarometer brought earlier this year. The spring Eurobarometer was carried out back in April this year, and only 11 percent rated the national economy to be in a very good state, and 89 percent felt it was in the absolute worst situation it could be in.

More pessimistic than the Croats are the Greeks, just 6 percent of them believe that the state of the Greek national economy is quite good, and 94 percent feel it is totally negative. Somewhat less pessimistic than the Greeks and the Croats are the Spaniards, Bulgarians, Italians, Romanians, and finally the French.

In the second part of the chart, Malta is ranked first, where 95 percent of respondents state that they feel the national economy is in good shape, followed by 91 percent in Luxembourg and the Netherlands, followed by Denmark, Germany, and Sweden with 88 percent.

Asked which of the most important issues the European Union is currently facing, most Croats, 48 ​​percent of them, stated that it remains to be immigration, followed by terrorism (32 percent), followed by public finances in EU member states (19 percent).

On average, over all of the European Union's 28 member states, the respondents claim some of their biggest concerns are immigration (40 percent) and terrorism (20 percent).

On the other hand, most Croats (65 percent) believe that the economic situation in the EU as a whole is quite good, 26 percent of them think it is terrible, and nine percent didn't provide a clear answer.

The most positive answers to this question were recorded in Lithuania (73 percent), Poland and Austria with a joint 70 percent, Ireland with 67 percent. The least positive responses were recorded in France (26 percent), Spain (36 percent), and then Italy and the United Kingdom (37 percent).

Croats are among those who mostly believe that the economic crisis has already reached its peak in terms of labour market impact and a recovery (58 percent), while 38 percent believe that it has not yet peaked and that the worst is yet to come.

The most optimistic about this matter are the Irish (76 percent), the Danes and the Dutch (70 percent), and then the Hungarians with 69 percent.

On the other hand, most French citizens (67 percent) maintain the belief that the crisis has not yet passed and that the worst is still on its way. The pessimism of the French is followed by that of the Estonians, the Lithuanians, the British and the Swedes.

Just 39 percent of Croats have a completely positive image of the European Union, which, despite having plenty of room for improvement, is still five percentage points more than it was back during the spring of this year, a neutral image is held by a higher 42 percent, which is five percentage points less than in spring, and 18 percent of Croats hold a totally negative belief about the EU.

For the first time, most Europeans think that their voice counts in the European Union (49 percent), four percentage points more than back in spring.

On the other hand, a significant 47 percent disagree with this statement, which is still far less than was recorded back during 2013's spring Eurobarometer.

The EU's enlargement policy is apparently still being met with suspicion and is still widely unpopular across the entire territory of the European Union.

When it comes to the precarious subject of EU enlargement, 43 percent of the respondents believed it was a positive thing, 45 percent were very much against it, while 12 percent said they weren't sure how they felt about it.

Make sure to follow our dedicated politics page for much more on Croatia and the Eurozone, the Croatian domestic political scene, and information on European-level politics which affect Croatia.

Unlike the United Kingdom, which used an opt-out, one of Croatia's obligations upon joining the European Union was the eventual introduction of the euro as the country's main currency. While many are against the plan, it will go forward regardless. Erste's main man has warned that Croatia's time to adapt properly to the imminent change is slowly slipping away, and the cooling of the global economy is expected. How will the relationship between Croatia and the Eurozone progress?

As Tomislav Pili/Poslovni Dnevnik writes on the 13th of December, 2018, even though the banks are expected to experience falling revenue due to the loss of currency trading, Croatia's eventual entry into the Eurozone is likely to bring a lot of benefits to Croatian society, said Erste Bank's CEO Christoph Schöfböck on Tuesday. The statement comes among continued mixed feelings from the public on Croatia and the Eurozone.

"The path towards the euro can't be a purpose for itself [a self-serving purpose], it must have a reason, and that's the prosperity of society," Schöfböck stated. Reflecting on developments in the global economy, Erste Bank's main man stressed that the world economy would "cool down" in two years, so Croatia must use that time for economic adjustment to finally enter into the Eurozone. As for movement on the domestic economic plan, this year Croatia can expect GDP growth between 2.5 and 2.8 percent, according to the director of economic research, Alen Kovač.

"We're growing at a faster rate than the European Union, but also slower than comparable countries," he stressed. Concerning the next year, it is estimated that the positive features of the Croatian economy will remain as they are, such as the further growth in the inflow of money from European funds, investment growth and personal consumption. However, in 2019, the risks that come from abroad - the trade war, Brexit and the issue of the Italian deficit - will be more pronounced. Therefore, next year the growth of the Croatian economy will slow down and will reach between 2.5 and 2.6 percent.

In addition to presenting macroeconomic forecasts, Erste Bank also used this opportunity to launch its new payment application, KEKS Pay. The application is the result of the internal startup of the bank and is described as "the first real digital wallet in Croatia". It serves to transfer money to friends or family's accounts, regardless of which banks they respectively use, and also allows for the collection of money from within a chat group. It functions as a "financial Whatsapp", so it's not necessary to open an account to transfer money, only the recipient's mobile number is required. Use of the application is completely free, as is initially downloading it.

Make sure to follow our dedicated business and politics pages for more information on Croatia and the Eurozone, the domestic political scene, doing business in Croatia, and much more.

Click here for the original article by Tomislav Pili for Poslovni Dnevnik

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