Croatia has switched to the euro and entered Europe’s passport-free zone – two important milestones for the country after joining the European Union (EU) almost a decade ago.
At midnight on Sunday, the Balkan nation said goodbye to its kuna currency and became the 20th member of the eurozone.
It is now the 27th nation in the Schengen zone, the largest passport-free travel area in the world, allowing more than 400 million people to move freely within its members.
“It’s the time for new beginnings. And nowhere in Europe is that more true than here in Croatia,” tweeted EU President Ursula von der Leyen upon her arrival in Croatia.
She met Croatian Prime Minister Andrej Plenkovic and Slovenian President Natasa Pirc Musar at a border crossing with EU member Slovenia.
Croatia, a former Yugoslav republic of 3.9 million that fought a war of independence in the 1990s, joined the EU in 2013.
“Years of Waiting”
As revelers across Croatia took to the streets to ring in the New Year, the country’s interior minister, Davor Bozinovic, was at the Bregana border crossing with Slovenia to wish good luck to the last few travelers who are having their passports checked there.
“We have opened our doors to borderless Europe. This goes beyond the abolition of border controls, it is the final confirmation of our European identity,” Bozinovic said.
Experts say the introduction of the euro will help protect Croatia’s economy at a time when inflation is soaring around the world after the Russian invasion of Ukraine pushed up food and fuel prices.
Stipica Mandic, a 72-year-old professional driver, said freedom of movement without long waits at border crossings is his personal dream.
“I’ve spent years of my life waiting at border crossings, so I came here tonight to witness this moment, the moment after which I won’t wait anymore,” he said.
But feelings among the Croatians are mixed. While welcoming the end of border controls, some fear the euro changeover will lead to a rise in the cost of living as companies round up prices when making conversions.
“It’s going to be tough. The already high prices are going to get even higher,” said Ivana Toncic, a teacher from Zagreb.
Travel agency employee Marko Pavic said Croatia is joining “an elite club”.
“The euro was already a measure of value – psychologically it’s nothing new – while joining Schengen is fantastic news for tourism,” he told AFP.
Economic difficulties
Experts say the introduction of the euro will lower credit conditions amid economic troubles.
Croatia’s inflation rate reached 13.5 percent in November, compared to 10 percent in the euro zone.
Analysts stress that eastern EU members with non-euro zone currencies, such as Poland and Hungary, were even more vulnerable to rising inflation.
French President Emmanuel Macron on Sunday welcomed Croatia’s changeover to the euro, describing it as a “stable and solid” currency that has helped Europe’s resilience to the aftermath of the war in Ukraine.
The Governor of the Croatian National Bank, Boris Vujcic, symbolically withdrew euros from an ATM in downtown Zagreb on Sunday.
In recent days, customers have been lining up at banks and ATMs to withdraw cash, fearing payment problems immediately following the transition period.
Croatia’s entry into the borderless Schengen area is expected to give a boost to the Adriatic country’s main tourism industry, which accounts for 20 percent of gross domestic product (GDP).
Croatia will continue to implement strict border controls on its eastern border with non-EU neighbors Bosnia and Herzegovina, Montenegro and Serbia.