Dombrovskis: European Commission supports Croatia's efforts to adopt the euro

NEWS 08.01.2019 13:02
Source: Pixabay (ilustracija)

Croatia is working hard on the introduction of the euro, and the process of Croatia's admission to the 19-country euro zone would be similar to Bulgaria's, which had already sent a letter of intent to Brussels, the European Commissioner for the Euro, Valdis Dombrovskis, said on Tuesday.

Croatia is intensively working on creating the prerequisites for its admission to the euro area, Dombrovkis, former Prime Minister of Latvia, told the press on Tuesday in Riga, on the margins of a conference on Latvia’s five years in the euro zone.

Latvia had joined the euro zone in January 2014, as the 18th member of the currency union. The last country to join the euro zone was Lithuania in 2015.

This year also marks 20 years since the original introduction of the euro in 11 EU countries in January 1999.

All EU member countries, except Denmark and the United Kingdom, are obliged to introduce the euro as their official currency, which they agreed to as part of the terms of their membership in the 28-country bloc. However, there are no deadlines for the adoption of the euro.

The European Commission supports member-states’ efforts to introduce the euro, and provides not only political but also the necessary technical and financial support, Dombrovskis said.

He said that the next financial perspective would also include a programme of financial support to the reforms carried out by EU member states aspiring to join the euro area membership.

Out of the seven remaining EU countries which still use their own currency, Croatia and Bulgaria have expressed their intention to join the euro zone, and aspiring countries are expected to then join the European Exchange Rate Mechanism II (ERM II) as well as the Single Supervisory Mechanism (SSM).

The SSM is a banking supervision system, which involves the European Central Bank (ECB) and the national authorities of participating countries, allowing the ECB to supervise local financial institutions and the implementation of legislative, operational and technical preparations for the adoption of the euro.

Croatia is likely to enter the ERM II in 2020, a year after the submission of its letter of intent which should be formally sent in 2019.

Bulgaria, which in 2018 sent a letter to the ECB and other European institutions about its plan to join the ERM II, will probably enter the ERM II in mid-2019, Dombrovskis said.

Future euro zone members must spend at least two years in the Exchange Rate Mechanism, and a minimum one more year for preparations for the replacement of its currency with the euro.

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