With the Schengen zone opening, the Balkan nation bids a fond farewell to its kuna currency to accept euro currency. 

Since joining the European Union (EU) nearly a decade ago, Croatia has switched to the euro and entered Europe’s passport-free zone.

The Balkan nation became the 20th member of the eurozone at midnight on Sunday, saying goodbye to its kuna currency and welcoming the euro currency. More than 400 million people are now able to travel freely throughout Schengen’s 27 member nations, which is the largest passport-free travel area in the world.

There is a sense of new beginnings in the air. As EU chief Ursula von der Leyen arrived in Croatia to mark the occasion, she tweeted, “Nowhere in Europe is this more true than Croatia.”.

Slovenian President Natasa Pirc Musar and Croatian Premier Andrej Plenkovic met at a border crossing with EU member Croatia.

The EU accepted Croatia as an EU member in 2013 after it fought an independence war in the 1990s. Croatia has 3.9 million citizens.

Euro Currency

‘Spent years waiting’

As Croatians celebrated the New Year on the streets, the country’s interior minister, Davor Bozinovic, was at the Bregana border crossing with Slovenia, wishing the best of luck to the last travellers to have their passports checked there.

“We opened our doors to a borderless Europe. “This is the final affirmation of our European identity,” Bozinovic said.

According to experts, adopting the euro will help protect Croatia’s economy at a time when global inflation is soaring as a result of Russia’s invasion of Ukraine, which has sent food and fuel prices through the roof.

Stipica Mandic, a 72-year-old professional driver, said his personal dream was to be able to travel freely without having to wait in long lines at border crossings. He also said that he waited long year at border check point to witness this moment.

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Croatians, on the other hand, are divided. While they welcome the end of border controls, some are concerned that the euro currency switch will raise living costs because businesses will round up prices when converting them.

“It’ll be tough. Prices that are already high will rise even further,” said Zagreb teacher Ivana Toncic.

Croatia has joined “an elite club,” according to Marko Pavic, a tourist agency employee.

“The euro currency was already a value measure – psychologically, it’s nothing new – while Schengen membership is fantastic news for tourism,” he told AFP.

Economic hardships

According to experts, the adoption of the euro currency will reduce borrowing conditions during a period of economic hardship.

In November, Croatia’s inflation rate was 13.5 percent, compared to 10 percent in the eurozone.

Analysts emphasise that eastern EU members with non-eurozone currencies, such as Poland and Hungary, have been particularly vulnerable to rising inflation.

euro currency

On Sunday, French President Emmanuel Macron praised Croatia’s adoption of the euro currency, calling it a “stable and solid” currency that had contributed to Europe’s resilience in the face of the consequences of the Ukraine conflict.

Boris Vujcic, Governor of the Croatian National Bank, symbolically withdrew euros from a cash machine in downtown Zagreb earlier on Sunday.

Customers have been queuing at banks and ATMs to withdraw cash in recent days, fearing payment problems in the immediate aftermath of the transition period.

The Adriatic nation’s key tourism industry, which accounts for 20% of its GDP, is expected to benefit from Croatia’s entry into the Schengen borderless zone (GDP).

Croatia will maintain stringent border controls along its eastern border with non-EU neighbours Bosnia and Herzegovina, Montenegro, and Serbia.

Source: https://www.aljazeera.com/news/2023/1/1/croatia-adopts-euro-enters-borderless-europe-club-on-new-year

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