Addressing the second session of the National Council to introduce the euro as the official currency in Croatia, Plenkovic said that accession to the euro area was one of the government's political goals and recalled that by signing the accession treaty with the EU, Croatia had very clearly assumed that obligation.
He said that the government's commitment to structural reforms was confirmed in yesterday's report by the European Commission, which states that Croatia has economic imbalances but no longer excessive ones.
"... We will step up preparations for the introduction of the euro... because we believe that it will contribute to Croatia's long-term sustainable growth, owing to stronger integration with the single EU market in all economic sectors and better coordination of economic policies with other euro area countries," said Plenkovic.
He said that the EC's report very clearly confirmed progress on four recommendations given last year, stressing that Croatia had never before experienced such progress.
The PM noted that based on the EC's assessment, Croatia was the only country to enter a higher category of member-countries, exiting the excessive macroeconomic imbalances procedure in which it had been since 2014.
Households, business sector to benefit from world's second most important currency
Plenkovic said that the introduction of the euro meant that in a few years' time households and companies would be using the benefits of the world's second most important currency, which would additionally strengthen the economy and the financial system, and enhance citizens' financial security and investor confidence.
Consequently, we can expect higher living standards as was the case with other Central European countries after they introduced the euro, he said.
Plenkovic said that by joining the euro area and the Schengen area of passport-free travel Croatia would complete the process of its full integration with and affirmation in the EU.
Impact of kuna-to-euro conversion mild
Plenkovic claimed that the kuna-to-euro conversion would have a mild and one-off impact on consumer price growth as indicated by the experience of other member-countries where prices increased by a mere 0.23% on average.
He said that the government would define measures to follow the process of conversion, including mandatory pricing in both kuna and euros to prevent abuse such as price rounding up and unjustified price growth.
"In the past 14 years prices in the euro area have grown much less than in Croatia, and in the same period gross average salaries in the Central European countries that have introduced the euro have grown faster than in Croatia. Therefore vocal slogans that we will get European prices and retain Croatian salaries are not true," said Plenkovic.
Text: Hina