Euro area membership guarantees greater security, better protection

Euro area membership guarantees the state, the business sector and citizens greater security and better protection from crises and economic shocks, Prime Minister Andrej Plenković said on Wednesday at the start of a session of the national council for the introduction of the euro currency.

"We are about to join the circle of the European countries which are the most developed and have the strongest mechanisms of solidarity and support in times of economic crises," he said.

Euro area membership will mean lower interest rates, greater resilience to crises and greater competitiveness for the business sector. It will also improve Croatia's international political, economic and financial rating, he said.

"This is the last stage of introducing the euro and despite all the challenges and crises over the past years, we are about to accomplish one of our two strategic goals of deeper integration with the European Union - euro area accession and accession to the Schengen area," Plenković said.

A lot of work remains to be done in the next four months until euro adoption, Plenković said, adding that four elements were crucial for a smooth transition to the euro.

The first element is consumer protection. Consumers must have adequate information about the process and be protected against any possible abuse, he said.

The second element is the implementation of legislative and other activities to ensure adjustment. The third element is the adjustment of the business sector and citizens (supplying banks, companies and citizens with money), and the fourth is a campaign to raise awareness of the benefits of euro area membership, Plenković said.

The PM noted that all countries that had joined the euro area had seen an increase in the standard of living of citizens, mentioning in that context Slovenia, which joined the euro area in 2007.

In the period from 2007 to 2021, gross salaries in Slovenia rose by 48% and prices by 26%, with the real growth of gross wages being around 22%, he said.

Plenković recalled that as of 5 September prices would be displayed in both kuna and euro and that the euro-kuna exchange rate had been fixed at HRK 7.53450.

He warned that competent institutions would be checking price conversion to protect consumers.

In a comment on claims that prices would go up when the euro is introduced amid growing inflation in Croatia, Europe and the rest of the world, Plenković said that so far the countries that had introduced the euro had experienced a one-off, minimal price rise of between 0.2 and 0.3 percentage points.

Text: Hina

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