At midnight (1am Latvian time), Croatia, whose population reaches 3.9 million, said goodbye to the Kuna and became the 20th country in the eurozone.
At the same time, it also became a member state of the 27th Schengen Zone, giving Croatians the right to free movement across the zone’s internal borders.
Experts believe that joining the Eurozone will allow Croatia to protect its economy in the face of high inflation.
However, the feelings of the Croatians themselves are not so unambiguous. While joining the Schengen zone is welcomed by most citizens, the transition to the euro is a cause for concern among some, with right-wing opposition arguing that the EU’s common currency only benefits superpowers such as Germany and France.
“We will mourn our husband, prices will rise,” says Dražen Golemačs, a 63-year-old pensioner living in Zagreb.
His wife Sandra does not agree with her husband and says that “the euro is worth more”.
“Nothing changes on January 1st. Everything has been calculated in euros for two decades,” official Neven Banić is convinced.
Meanwhile, Prime Minister Andrejs Plenkovičs stressed that joining the Eurozone and the Schengen area are “two strategic objectives for deeper integration into the EU”.
Croatia, which won the war of independence in the 1990s to break away from Yugoslavia, joined the EU in 2013 and the euro is already widely in circulation in the country today.
About 80% of bank deposits are denominated in euros and all of Croatia’s major trading partners are located in the eurozone.
Croatians have long valued their most prized possessions – cars and houses – in euros, effectively demonstrating their distrust of the national currency, the kuna.
“The euro will definitely bring stability and security,” says Ana Sabic, director of the Croatian National Bank’s European affairs department.
Experts believe that joining the eurozone will make loans cheaper.
Inflation in Croatia reached 13.5% in November, while its average level in the Eurozone was only 10%.
Analysts say Eastern European member states that have not yet adopted the single currency, such as Poland and Hungary, are even less protected from high inflation.
On the other hand, Croatia’s accession to the Eurozone will boost the tourism industry, which is particularly important for the country’s economy, which generates 20% of gross domestic product (GDP).
On 1 January, the long queues at the 73 border crossings on Croatia’s borders with Slovenia and Hungary will go down in history.
However, for technical reasons, border controls at airports will only be stopped on 26 March.
At the same time, Croatia will continue to maintain strict controls on its eastern borders with Bosnia and Herzegovina, Montenegro and Serbia.
The fight against illegal immigration remains a serious problem and Zagreb has the longest stretch of the EU’s external land border, stretching 1,350 kilometres.
