ZAGREB, July 10 (Xinhua) -- European Commission and European Central Bank (ECB) announced on Friday that Croatia was admitted into European Exchange Rate Mechanism (ERM II).
Croatian Prime Minister Andrej Plenkovic welcomed on Friday the announcement, saying, "This is another accomplishment of the government. We have strengthened Croatia's economic and financial reputation."
At a press conference after Croatia's accession to the ERM II, a preliminary stage for entry into the eurozone, the prime minister declined to speculate on the date of entry but said that his government will keep on working on its goal to meet the Maastricht criteria.
Since a member state has to spend at least two years in ERM II before joining the eurozone, it means that Croatia could adopt the euro as currency in 2023 at the earliest.
"In April most people thought that we would not succeed and that we would be admitted in fall or next year. We met a deadline as planned," Boris Vujcic, governor of the Croatian National Bank, said at the conference. He stressed that entering the ERM II means better financing conditions for Croatia and greater investor confidence.
By entering ERM II, Croatia has committed to simultaneously joining the Banking Union. From Oct. 1, 2020, the ECB will be in charge of the direct supervision of the significant institutions in Croatia. In the meantime, the ECB will carry out an assessment to determine which banks fulfill the criteria to be classified as significant institutions.
Croatia has kuna as its currency. But Plenkovic said on Friday that euro is already very much present in Croatia as more than half of the loans in Croatia are with a currency clause in euros. He noted that 61 percent of tourist overnight stays are from countries in the euro area, while 57 percent of Croatia's exports go to the euro area states.