Croatia was feverishly counting down the hours until the new year began, as the moment marked a double success: the transition to the euro single currency and entry into the Schengen free movement zone, two important steps for the small Balkan country that joined the European Union less than 10 years ago.

At midnight, with the beginning of the new year, Croatia said goodbye to its kuna currency, becoming the 20th member of the eurozone. At the same time, it is the 27th country to join the Schengen area, a vast area where more than 400 million people can travel freely without internal border controls.

Local newspapers hailed the two events on Saturday, with daily Vecernji List calling them Croatia’s “crown of EU accession”.

European Commission President Ursula von der Leyen is expected to take part in the official marking of this double event on Sunday.

The country, which declared its independence from Yugoslavia in 1991 and saw an estimated 20,000 people die in the subsequent conflict (1991-1995), joined the EU in July 2013 to now achieve the same status as most former European Union members.

Croatian leaders regularly emphasize the benefits their 3.9 million compatriots have received from joining the euro and Schengen area. “Two strategic goals for continued EU integration,” conservative Prime Minister Andrej Plenkovich noted on Wednesday.

WHAT DOES ACCESS TO THE EUROZONE GIVE CROATIA

Experts say the move to the euro will help protect Croatia’s economy, one of the weakest in the EU, in a world characterized by rising inflation, a severe energy crisis and geopolitical danger following Russia’s February 24 invasion of Ukraine. In November, inflation in Croatia reached 13.5% against 10% in the Eurozone.

Eastern European countries that are EU members but have not opted for the euro, such as Poland and Hungary, have proved even more vulnerable to rising prices.

For the head of the Croatian Central Bank (HNB), Borys Vujicic, abandoning the kuna, the national currency that was introduced in 1994, is “the only sensible policy”.

“The euro undoubtedly provides economic stability and security,” Ana Sabic, an official representative of the HNB, told AFP. All sectors of society – individuals, companies and the state – will benefit from the adoption of the euro, she insisted.

Experts note, in particular, the elimination of currency risks and the improvement of lending conditions.

CROATIANS ADVISE SHENGEN, BUT ARE AFRAID OF THE EURO

Average citizens have mixed feelings: while they generally welcome the abolition of border controls, the change in currency is distrustful.

In recent days, customers have been queuing at banks and ATMs to withdraw money, fearing payment problems after the changes.

After midnight, the head of the central bank symbolically removed the euro from one of the machines in the center of Zagreb.

Many Croatians also fear that the introduction of the euro will lead to higher prices – especially as firms will round them up during conversion.

“We will cry for our kuna, prices will explode,” says 63-year-old pensioner Dražen Golemac from the capital. However, his wife Sandra is optimistic and says she is sure that “the euro is more valuable.”

Marko Pavych, an employee of the travel agency, said that his country “joins the elite club.” But “the euro was already a measure of value, psychologically there is nothing new in this,” he said.

“Nothing will change from January 1, everything has been calculated in euros for two decades anyway,” said Neven Banić, another employee.

The euro is already very present in Croatia. Approximately 80% of bank deposits are denominated in this currency, its main partners are in the euro zone, and tourism, which accounts for 20% of GDP, is fueled by a large European clientele.

WHAT ACCESS TO SHENGEN MEANS FOR CROATIA

This year, Croatia received four times more tourists than residents, and joining the Schengen area will give the sector an even bigger boost.

Long queues at the borders with EU neighbors Slovenia and Hungary will become a thing of the past.

73 checkpoints will be closed on Sunday. Changes will take place at the airports on March 26 due to technical reasons.

At the same time, the situation on Croatia’s borders with its non-EU neighbors – Bosnia, Montenegro and Serbia – will hardly change: Croatia already applies Schengen rules.

The fight against illegal immigration remains a serious problem. Since joining the EU, Croatia has inherited the difficult task of protecting an external land border of more than 1,350 km, most of which is shared with Bosnia.

Croatia is on the so-called Western Balkan route, which is used by migrants as well as arms, drug and human traffickers to reach Western Europe.

After a decrease in illegal crossings due to the health crisis, Croatia registered 30,000 illegal migrants in the first ten months of 2022, a 150% increase compared to the same period last year.

(source: news.ro)