Entry Into The Eurozone Has Not Significantly Affected Price Increases In Croatia

Although the residents of Zagreb complain that everything has become more expensive and many explain the increase in prices with the switch to the European currency, the Croatian National Bank said that the entry into the eurozone did not significantly affect the rise in prices, writes the Belgrade newspaper "Politika", quoted by BTA.

On January 1 this year, Croatia, which has a population of around four million, became the 20th member of the eurozone and the 27th Schengen country, the first time an EU member state joined both areas on the same day.

These days, Zagreb is festively decorated, glittering, the Christmas shopping fever has begun. The city attracts many tourists, especially from the countries of the region, the report continues.

A year ago, Croatia replaced its national currency, the kuna, with the euro, but prices in shops are still written in both euros and kuna. Those who still have kunas left can exchange them at banks, and from January 1st they will only be able to do so at the Croatian National Bank (CNB).

The deputy governor of the Croatian National Bank, Sandra Švalek, claims that some prices have even decreased since the introduction of the European currency.

"The benefits of the introduction of the euro are permanent and the costs are one-off. Our interest rates are lower than if we were outside the eurozone.

The entire process of introducing the euro went smoothly, as according to the Eurobarometer survey, as many as 68 percent of citizens support the switch to the euro. An agreement was reached with the banks that interest rates for businesses and citizens cannot be higher after the introduction of the euro.

Due to the high support of the citizens, there was no need for us to invest in the promotion of the euro," explains Švalek in a conversation with journalists who were guests of this financial institution, noted in "Politics".

Surveys of citizens before the introduction of the euro, she explains, show that there was a fear that it would negatively affect their standard of living.

There was also resistance to the introduction of the euro, but it turned out to be unfounded. Prices are rising, but under the influence of factors that have nothing to do with the introduction of the euro, Sandra Švalek is categorical.

Interest rates on housing loans are already below four percent in Croatia. And this, according to the Croatian National Bank, is one of the advantages of the introduction of the euro.

"Our life has become easier with the euro because we don't have to worry when we go abroad whether we have changed the currency or how much the transactions cost. The introduction of the euro and entry into the Schengen area has also had a positive effect on the Croatian economy," explained the deputy governor.

The average salary in Croatia is 1,000 euros, and the minimum wage in the country is 560 euros. According to Hrvoje Butkovic from the Institute for Development and International Relations, Croatia has become attractive to foreign workers, but at the same time, a large number of Croats have left the country because they had the opportunity to find work in one of the Western European countries.

"Since 2011, we have lost ten percent of the population, partly due to migration abroad, partly due to weak natural growth. Today, foreign workers make up ten percent of the workforce in Croatia. Among them, the most are those from Bosnia and Herzegovina, followed by Serbia. There are also many people who arrived in Croatia from North Macedonia, Nepal, the Philippines and India.

The majority of these workers are unskilled and therefore work primarily in construction. They receive work permits for one year, but this period is planned to be extended to three years. Unemployment in Croatia is six percent," Butkovic explains.

And the fact that Croatia has become attractive to people from Asian countries is visible at almost every step, the report continues.

Butkovic also noted that many citizens were not in favor of introducing the euro and abandoning the kuna, which they consider a symbol of their sovereignty. He accuses the authorities of not holding a referendum and asking citizens what they think about the switch to the euro, and points out that more than 40 percent of Croatians were against the change.

When asked to comment on such opinions, the National Bank of Croatia pointed out that the transition to the euro is primarily a political decision and that a referendum is a very expensive thing, and polls show that citizens support the euro, Politika notes.

Butkovic also noted that entry into Schengen was important for Croatia because 20 percent of the country's GDP comes from tourism revenue.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!