Croatia joins eurozone & Schengen area, adopts euro as currency

HNB also becomes a full member of the Single Supervisory Mechanism, although the country has been part of the close cooperation framework since October 2020, European Central Bank (ECB) said in a press release.

Croatia has become the latest country to join the eurozone and Schengen area. The country has adopted euro as its currency and has started circulating euro banknotes and coins from January 1, 2023, bringing the number of EU member states using the single European currency to 20. Croatia’s national bank Hrvatska narodna banka has also joined the Eurosystem.

The euro area’s central banking system comprises the ECB and the national central banks of those countries whose currency is the euro.

As such, the ECB is currently responsible for directly supervising five significant institutions in the country and overseeing 16 less significant institutions there. As part of its supervisory tasks, the ECB is also responsible for licensing banks and assessing the buyers of qualifying holdings in all banks. HNB already has a representative on the ECB’s supervisory board. The euro area’s central banking system comprises the ECB and the national central banks of those countries whose currency is the euro.

Hrvatska narodna banka has paid the remainder of its contribution to the capital of the ECB and transferred its contribution to the ECB’s foreign reserve assets. Croatian counterparties of the Eurosystem will be able to participate in ECB open market operations announced after January 1, 2023.

Croatia joining the euro area as its 20th member also means that the new system of rotating voting rights in the ECB’s Governing Council comes into force as of January 1, 2023, with the rights rotating according to a calendar.

“From now on, internal borders can be crossed freely, without controls, like here at Bregana. And all the other crossing points at land with Slovenia and Hungary, at sea with Italy, and as of March, by air with all other Schengen States. No more checks, no more passport control, no more queues, just people crossing smoothly, as we can see right behind us. They can visit with the same Schengen visa as they use to travel to all other Schengen countries. People will be able to travel freely, business will be unhindered by checks,” said Ursula Gertrud von der Leyen, president of the European Commission.

Fibre2Fashion News Desk (DP)