Croatia is on the right track for introducing the euro in 2023, but a possible new lockdown due to the country's low vaccination rate could make that path more difficult, European Commission Executive Vice President for an Economy that Works for People Valdis Dombrovskis said in Zagreb on Monday.

He was speaking at a conference on Croatia’s path to the euro organized by the Lider business weekly and the EC Representation in Croatia.

Dombrovskis said Croatia’s economic recovery was going well and that it was doing an extraordinary job given that last year’s earthquakes made the problems caused by the pandemic more difficult.

Investment and jobs are rising but Croatia must recover from the crisis, as do all EU member states, he said, estimating that Croatia would reach the pre-crisis economic level next year.

However, he said, the Covid vaccination rate of only 50.8% is a big risk.

If the health situation deteriorates, further restrictions and another lockdown are possible. If that happens, it will affect the rhythm of recovery, macroeconomic difficulties and vulnerability as well as bad loans and the public debt, Dombrovskis said.

The introduction of the euro will send a positive signal to investors, he said, estimating that the standard of living will increase.

You must make public administration and the judiciary more efficient, he said, adding that, in the euro area, Croatia would also join the banking union.

It will be possible to exchange kuna coins in commercial banks for three years after the introduction of the euro and bills indefinitely.

Nobody must use the introduction of the euro as an excuse for price growth. People worry that shops will start cheating them, Dobrovskis said, adding that before and after the euro changeover, prices would be declared in both kuna and euro.

He said 60% of Croatian citizens were for introducing the euro and that those against should be informed well via a campaign.

He said Croatia would be able to introduce the euro only after meeting all convergence requirements.

If all requirements are met in 2022, the Council of the EU will decide whether to allow the euro to be introduced in Croatia on 1 January 2023, he added.

He concluded by saying that reforms were imperative for a lasting recovery.