EU Gets Bigger with Addition of Croatia

Croatia has become the newest country to join the European Union. Croatia has also started utilizing the Euro as its currency as part of the Eurozone and part of the Schengen Area. The country relaxed its borders last month on December 8th. Croatia adds its population to the 347 million of Europeans using the Euro. As of yesterday (January 1 2023), the Euro will replace the kuna as the currency of Croatia.  The kuna will be exchanged at a conversion rate of 1 Euro for 7.53450 Croatian Kuna. According to the EU, about 70% of ATMs in Croatia are already distributing Euros.

With Croatia joining the Eurozone, on January 1, 2023, the euro will gradually replace the kuna as the currency of Croatia. In line with a consistent record of exchange-rate stability, the kuna will be exchanged at a conversion rate of 1 euro for 7.53450 Croatian Kuna. Hrvatska Narodna Banka, the country’s national central bank, becomes a member of the Eurosystem- the Euro area’s central banking system of the ECB, and the national central banks of those countries whose currency is the Euro.

The Schengen area covers over 4 million square kilometers with a population of almost 420 million people, and includes 26 countries, including 22 of the 27 EU member states, and all members of the European Free Trade Association (Iceland, Liechtenstein, Norway, and Switzerland)

Last week, EU President Ursula von der Leyen, issued the following statement on Croatia joining Europe:

“I warmly welcome Croatia in the Euro and in the Schengen free travel area. From this Sunday, citizens driving to and from Croatia can start traveling without internal border controls. Schengen enlargement makes us stronger, and Croatia can now fully contribute to a more prosperous and resilient Schengen area. On the same day, Croatians are joining a community of 347 million Europeans who are using the Euro in their everyday lives. This is a major achievement for Croatia, a symbol of its deep-rooted attachment to the EU, and a symbolic moment for the euro area as a whole. This is a proud moment for the EU, Croatia and its citizens.”

It is interesting to note that in 2023 the EU will celebrate the 30th anniversary of its Single Market. Established on 1 January 1993, the European Single Market aims to allow goods and services, including all types of capital, across all member countries reducing friction and cost.

 

 

 

 

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