By Philip Blenkinsop
BRUSSELS (Reuters) – European Union finance ministers formally approved on Tuesday Croatia to become the 20th member of the common euro currency in early 2023, a move hailed as the culmination of an “incredible journey” for a Balkan nation once at war.
European Commission Vice-President Valdis Dombrovskis said Croatia’s membership confirms that the euro remains an “attractive, resilient and well-performing global currency” and a symbol of strength and unity.
“This is particularly important at such a difficult time when Russia’s aggression against Ukraine continues to send shockwaves around the world,” Dombrovskis said at a ceremony marking the joining of the Croatia, the first eurozone expansion since 2015.
The European Council, the grouping of 27 EU governments, has adopted three legal acts needed to allow Croatia – an EU member state since 2013 – to introduce the euro on January 1.
One of these acts fixed the conversion rate for entry to one euro at 7.53450 Croatian kuna, with Croatia now having a few months to prepare the practicalities of the currency change.
Croatia, in southeastern Europe, has been an independent country since 1991, when it left the then federal Yugoslavia, which, together with Bosnia’s secession a year later, sparked years of devastating war with Serbia.
Neighboring Slovenia, also a former Yugoslav republic and now a member of the EU, adopted the euro in 2007. Nineteen countries are currently part of the eurozone.
Croatia was ruled by nationalist strongman Franjo Tudjman until his death in 1999 and to qualify for EU membership he took steps to fight corruption and improve governance, including the condemnation of Ivo Sanader, Prime Minister from 2003 to 2009.
Croatian Finance Minister Zdravko Maric called the EU’s green light to adopt the euro a “great historic day” for his country, whose beautiful Adriatic coast is a major tourist destination.
EU Economics Commissioner Paulo Gentiloni hailed Croatia’s imminent entry into the eurozone as an “extraordinary achievement”.
“What an incredible journey it was for Croatia. For my generation, Croatia experienced the first (European) war after the end of the (second) world war,” he said, referring to the Yugoslav conflict of the years 1990.
To adopt the euro, Croatia had to fulfill criteria of price and exchange rate stability, sound public finances and moderate long-term interest rates, all measured against EU benchmarks.
(Reporting by Philip Blenkinsop and Bart Meijer, editing by Mark Heinrich)