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European Commission Convergence report on Croatia

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Summary
On June 1, 2022, the European Commission issued a Convergence report and, in that report, it is stated „In the light of its assessment on legal compatibility and on the fulfillment of the convergence criteria, and taking into account the additional relevant factors, the Commission considers that Croatia fulfills the conditions for the adoption of the euro.“ It is also stated that Croatian legislation is fully compatible with the compliance duty under Article 131 of the Treaty on the Functioning of the European Union (TFEU).
Content

Furthermore, this report showed that Croatia met all criteria to introduce the euro as an official currency. It is explicitly stated that Croatia fulfills the criterion on price stability, the criterion on public finances, the criterion on the convergence of long-term interest rates and that the exchange rate of the Croatian kuna against the euro has been broadly stable since the previous Convergence Report.
Assessment of the additional factors relevant for economic integration and convergence, including balance of payments developments and integration of product, labor and financial markets,
Therefore, it adopted a proposal for a Decision and a proposal for a Council Regulation on the introduction of the euro in Croatia.
The Council will take final decisions on the introduction of the euro in Croatia in the first half of July 2022, following discussions in the Eurogroup and the European Council and after the European Parliament and the ECB have delivered their opinions.

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