After joining the European Union nearly ten years ago, Croatia achieved two significant milestones on Sunday: switching to the euro and entering the passport-free zone of Europe.
The country from the Balkans said goodbye to its kuna currency at midnight and joined the eurozone as its twentieth member.
It is currently the 27th country in the largest passport-free region in the world, known as Schengen, which allows more than 400 million people to travel freely inside its borders.
“This is the time of year for fresh starts. And nowhere in Europe is this more true than right here in Croatia, according to EU Commissioner Ursula von der Leyen, who tweeted the statement as she landed in Croatia to honor the event.
According to experts, the adoption of the euro will protect Croatia’s economy at a time when global inflation is on the rise as a result of Russia’s invasion of Ukraine, which drove up the cost of food and fuel.
However, opinions vary among Croatians.
Some people worry that the changeover to the euro will increase the cost of living because firms round prices when they convert them, even while they applaud the abolition of border controls.
“It will be challenging. Prices that are presently expensive will rise even further, according to Zagreb instructor Ivana Toncic.
“Entry into Schengen is wonderful news for tourists,” he told AFP. “The euro was always a value gauge – psychologically, it’s nothing new.”
In Croatia, the euro is already widely used.
Croatians have long valued their most valuable possessions in euros, such as their automobiles and apartments, demonstrating a lack of faith in the national currency.
Euros make up around 80% of bank deposits, and the eurozone comprises the majority of Zagreb’s commercial partners.
Officials have defended the decision, claiming that the country has now fully integrated into the EU as a result of joining the eurozone and Schengen.
Croatia, a 3.9 million-person former Yugoslav country that waged an independence war in the 1990s, ascended to membership in the European Union in 2013.
According to experts, the introduction of the euro will make it easier to borrow money during a recession.
In November, Croatia’s inflation rate was 13.5 percent compared to the eurozone’s 10 percent.
Analysts emphasize that countries in the east of the EU, like Poland or Hungary, that use currencies that are not part of the eurozone have been considerably more sensitive to rising inflation.
Emmanuel Macron, the president of France, praised Croatia’s decision to adopt the euro on Sunday, calling it a “reliable and sturdy” currency that has helped Europe weather the effects of the conflict in Ukraine.
Increase in Tourism
Boris Vujcic, the governor of the Croatian National Bank, symbolically withdrew euros from a cash machine in the heart of Zagreb earlier on Sunday.
Customers have been waiting in line at banks and ATMs recently to withdraw cash out of concern for payment issues during the transition period’s immediate aftermath.
In order to represent barrier-free travel, a number of events were held as the clock struck midnight along Croatia’s borders with its EU neighbors.
The New Year’s countdown culminated with the raising of a traffic barrier at a crossing point with EU member Hungary, and foreign minister Gordan Grlic-Radman participated in the ceremony there.
At the Slovenian border, a similar ceremony was performed with the ministers of the interior, Davor Bozinovic, and the public administration, Sanja Ajanovic Hovnik.
With Croatia in Schengen, we are celebrating the New Year and a new Europe tonight, Bozinovic told the media.
The vital tourism sector, which contributes 20% of Croatia’s GDP, is anticipated to grow as a result of the country’s membership into the Schengen borderless area.
The 73 land border crossings with Slovenia and Hungary will no longer have the lengthy lines they once did.
However, due to technical difficulties, border inspections at airports won’t stop until March 26.
Additionally, Croatia will continue to conduct rigorous border inspections along its eastern border with its non-EU neighbors Bosnia, Montenegro, and Serbia.
The primary difficulty in securing the 1,350-kilometer long external land border of the European Union continues to be the fight against illegal immigration (840 miles).