Croatia clears final hurdle to adopting the euro next year

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Officials including European Central Bank president Christine Lagarde, left, hold up cardboard euro coins after a signing ceremony for Croatia to join the euro in Brussels

The European Union has removed the final obstacles to Croatia adopting the euro, enabling the first expansion of the currency bloc in almost a decade.

EU finance ministers approved three laws that pave the way for Croatia to become the 20th member of the eurozone on January 1.

The last EU country to join the European single currency area was Lithuania in 2015.

“It’s a big day for Croatia, I dare say historic,” Croatian finance minister Zdravko Maric told reporters in Brussels.

A cyclist rides past an exchange office in Zagreb, Croatia

Adopting the euro offers economic benefits stemming from deeper financial ties with the currency bloc’s other members and the European Central Bank’s (ECB) monetary authority.

More tangibly, it means that any of the current eurozone’s 340 million inhabitants who visit Croatia will no longer need to exchange their cash for Croatian kuna.

Euro entry also has political rewards because the shared currency is Europe’s most ambitious project to integrate nations, giving them a place in the EU core.

That means a seat at the EU’s top decision-making tables.

Croatia’s accession to the monetary bloc is “an important moment for the European Union” and “confirms that the euro is an attractive, resilient and successful global currency”, EU Commission executive vice-president Valdis Dombrovskis said.

However, the euro’s exchange rate very briefly touched one dollar for the first time in two decades on Tuesday before immediately going back up.

A worsening energy crisis in Europe tied to Russia’s war in Ukraine has stoked fears of the economy going into a tailspin.

“The crucial factor for a possible adverse scenario is exactly the supply of energy,” European economy commissioner Paolo Gentiloni said.

Adopting the euro offers economic benefits stemming from deeper financial ties with the currency bloc’s other members and the European Central Bank’s (ECB) monetary authority.

More tangibly, it means that any of the current eurozone’s 340 million inhabitants who visit Croatia will no longer need to exchange their cash for Croatian kuna.

Euro entry also has political rewards because the shared currency is Europe’s most ambitious project to integrate nations, giving them a place in the EU core.

That means a seat at the EU’s top decision-making tables.

Croatia’s accession to the monetary bloc is “an important moment for the European Union” and “confirms that the euro is an attractive, resilient and successful global currency”, EU Commission executive vice-president Valdis Dombrovskis said.

However, the euro’s exchange rate very briefly touched one dollar for the first time in two decades on Tuesday before immediately going back up.

A worsening energy crisis in Europe tied to Russia’s war in Ukraine has stoked fears of the economy going into a tailspin.

“The crucial factor for a possible adverse scenario is exactly the supply of energy,” European economy commissioner Paolo Gentiloni said.

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