Belgium, (Brussels Morning Newspaper) The Economic and Financial Affairs Council (ECOFIN) approved Croatia’s eurozone accession on Tuesday.
EU finance ministers gave the final approval for the country to adopt the euro on 1 January next year, DW reports.
Zbyněk Stanjura, Finance Minister of the Czech Republic, which presides over the EU, congratulated his outgoing Croatian counterpart Zdravko Marić, noting that Croatia will become the 20th EU member state to join the eurozone.
Marić pointed out that the eurozone is facing challenges, but stressed that EU integration continues despite them.
Croatia is to scrap monetary sovereignty less than 10 years after it joined the EU, with conversion rate fixed at 7.5345 kuna per euro.
The country is joining the eurozone as the euro is in steep decline, having reached near parity with the US dollar earlier this week, and cost of living in the bloc is on the rise.
Happy despite challenges
Marić stressed before the meeting on Tuesday that he is happy with the coming switch to the euro despite “very strong challenges” in the eurozone including rising inflation and slow economic recovery.
He noted that Croatia met the criteria for joining the eurozone that include keeping inflation under control and reining in public spending.
While politicians praise the coming accession to the eurozone, citizens expressed concerns that adoption of the euro will lead to price hikes and that retailers will round up prices as part of conversion.
European Central Bank (ECB) President Christine Lagarde pointed out that EU member states that join the eurozone have to maintain low deficit and keep inflation and euro exchange rate stable.
“It’s a wonderful club to be a member of, but it requires commitment, dedication, continued respect of the rules, and I know that we can expect no less from Croatia,” she stated.
Swedish citizens rejected the plan to join the eurozone at a referendum in 2003 and Denmark was the only EU member state that secured its right to maintain monetary sovereignty because it joined the bloc before 1992, when new rules made it mandatory.
Lithuania was the last EU member state to abandon monetary sovereignty, Bulgaria announced plans to do so in 2024, while Poland and Hungary have not prepared plans to join the eurozone.