As of Sunday, Croatia is officially the twentieth country where payments can only be made with the euro. Although the currency should help Croatia further, residents of the country see prices suddenly rise after the introduction of the European single currency. What is going on?
Until Saturday, the inhabitants of the country can also spend their remaining kunas in addition to the euro. From Sunday, the euro will be the only currency.
Various European leaders congratulated Croatia with the new currency. Ursula von der Leyen, the President of the European Commission, even traveled to the capital Zagreb to celebrate the introduction of the euro.
Croatia first had to meet euro conditions
Although Croatia already joined the European Union in 2013, they are now ‘only’ introducing the euro. The fact that this has only happened now is because Croatia first had to meet a number of conditions to join the eurozone.
The country first had to have its public finances in order, a stable exchange rate and low inflation. Because this is now the case, the Croatian currency the kuna will completely disappear from the scene this weekend.
It was attractive for Croatia to join the eurozone. Mainly because there are no exchange rate fluctuations between the countries whose currency is the euro. It is now easier for those countries to invest in Croatian companies. In addition, it is convenient for European tourists. They no longer have to change money when they enter the country.
In addition to the introduction of the euro, Croatia has also joined the so-called Schengen area. This means that you no longer have to show your passport when you want to enter or leave the country.
Prices suddenly skyrocket
Yet many Croats are not happy with the changes. Since the introduction of the euro on January 1 of this year, prices have suddenly risen sharply in the country. According to the Croatian government, this is because sellers are abusing the new currency. Many retailers would round up their prices in euros, although it is legally prohibited to do so.
Davor Filipovic, the Croatian minister of economic affairs, says that these price increases are “unacceptable”. According to the minister, there are therefore various options on the table to punish the price increases.
For example, Filipovic thinks of a blacklist of retailers who abuse the new currency. Or freezing the prices of some products so that they can no longer rise.
